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A ccording to Article 1, Section 7, of the Constitution, when the President chooses not to sign a bill and instead returns it to the chamber that originated it, the chamber shall enter the message of the President detailing the reasons for the veto in its Journal and then "proceed to reconsider" the bill. A vetoed bill can become law if two-thirds of the Members voting in each chamber agree, by recorded vote, a quorum being present, to repass the bill and thereby override the veto of the President. The chamber that originated the bill sent to the President acts first on the question of its reconsideration. In other words, the House acts first on vetoed bills that carry an "H.R." or "H.J. Res." designation, and the Senate acts first on vetoed bills that carry an "S." or "S.J. Res." designation. If the chamber of origin votes to repass the bill, then the bill with the veto message is transmitted to the second chamber, which then also reconsiders it. Nothing in the Constitution requires that either chamber vote directly on the question of repassing a vetoed bill. The chambers have, for example, referred a vetoed bill to committee instead. If either chamber fails to vote on the question of repassing the bill, then the measure dies at the end of the Congress. Both chambers will not necessarily even have a chance to take up the question. If two-thirds of the Members of the chamber of origin do not agree to override a veto, then the measure dies, and the other chamber does not have an opportunity to vote on the question of repassing the bill. The Constitution does not otherwise address how Congress should consider a vetoed bill, and it is therefore House and Senate rules and practices that additionally govern the treatment of bills vetoed and returned by the President. The consideration of a vetoed bill is a matter of high privilege in the House, and the chamber generally votes to override or sustain the veto shortly after the message is received from the President or the Senate. Time for debate on the question is usually controlled and allocated by members of the committee of jurisdiction, and a majority of the House can vote to bring consideration to a close. To repass the bill over the veto of the President requires the support of two-thirds of the Members voting, a quorum being present. On the day a vetoed bill and accompanying presidential message are received, the Speaker lays the message before the House. The veto message is read and entered in the House Journal . It is not necessary for a Member to make a motion to reconsider the vetoed bill. If no Member seeks recognition after the message is read, the Speaker will put the question of overriding the veto before the House by stating: The pending question is whether the House will, on reconsideration, pass the bill, the objections of the President to the contrary notwithstanding. If Members do not wish to debate the question immediately, several preferential motions can be made before the Speaker states it. The House can agree by motion (or unanimous consent) to postpone the consideration of a veto message to a named day or to refer it to committee. The motion to postpone consideration of a veto message and the motion to refer a veto message are debatable under the hour rule. The House may also agree to a nondebatable motion to lay the vetoed bill on the table. While the motion to table usually permanently and adversely disposes of a matter, that is not true in the case of a vetoed bill. A motion to remove the bill from the table could be made at any time. Debate on the question of overriding a veto takes place under the hour rule. In practice, the Speaker recognizes the chair of the committee with jurisdiction over the vetoed bill for an hour of debate, and the chair in turn yields 30 minutes to the ranking minority member for purposes of the debate only. The chair and ranking member of the committee serve as floor managers of the debate, yielding portions of time to other Members who wish to speak. Typically, after the hour is consumed or yielded back, the majority floor manager moves the previous question. If a majority of the House votes to order the previous question, the vote immediately occurs on the question of overriding the veto. To override a veto, two-thirds of the Members voting, a quorum being present, must agree to repass the bill over the President's objections. The Constitution requires that the vote be by the "yeas and nays," which in the modern House means that Members' votes will be recorded through the electronic voting system. The vote on the veto override is final because, in contrast to votes on most other questions in the House, a motion to reconsider the vote on the question of overriding a veto is not in order. If the override vote on a House or Senate bill is unsuccessful, then the House informs the Senate of this fact and typically refers the bill and veto message to committee. If the House votes to override a veto of a bill that originated in the House (H.R. or H.J. Res.), the bill and veto message are sent to the Senate for action. If the House successfully overrides a veto of a bill that originated in the Senate (S. or S.J. Res.), then the bill becomes law, because two-thirds of both chambers have agreed to override the veto. If the Senate wishes to reconsider a vetoed bill, Senators generally enter into a unanimous consent agreement that the message be considered as read, printed in the Congressional Record , and, as required by the Constitution, entered in the Senate Journal . Senators often also agree, by unanimous consent, to limit time for debate on the question of overriding the veto. When the Senate receives a vetoed measure from the President or the House, it is quite common for it to be "held at the desk" for several days and considered only after unanimous consent has been reached on the terms of its consideration. When the vote on the question occurs, it must be taken by roll-call vote and receive support from two-thirds of the Senators voting, a quorum being present. Although generally the Senate reconsiders a vetoed bill under the terms of a unanimous consent agreement, it is not necessary to secure the support of all 100 Senators to consider a vetoed bill in the Senate. Absent an arrangement to hold the veto message at the desk, it would be read and then entered into the Journal after its receipt from the President or the House. The presiding officer would then state: Shall the bill pass, the objections of the President of the United States to the contrary notwithstanding? Several debatable motions are in order, however, that could displace consideration of the veto message. The message could be referred to committee, for example, or postponed to a specific time. Alternatively, the majority leader might make a motion to proceed to another matter. The question of overriding the veto could be brought back before the Senate with the consent of all Senators or by a numerical majority through a nondebatable motion to proceed. Finally, once the veto message has been laid before the Senate, it could also be tabled or indefinitely postponed, which would normally preclude any further action on the matter. The question of overriding a veto is debatable under the regular rules of the Senate. The question could be debated as long as any Senator sought recognition to discuss it. Debate on the question of overriding a veto can be limited by unanimous consent or by invoking cloture. Ending debate through a cloture motion requires the support of three-fifths of Senators duly chosen and sworn, or 60 Senators if there is no more than one vacancy. Cloture is rarely used to end debate on overriding a presidential veto. The number of Senators required to end debate is less than the number required to override a veto (assuming that there are no vacancies and more than 90 Senators vote on the override question). Two-thirds of the Senators voting, a quorum being present, must agree to override the veto and repass the bill. The vote must be a roll-call vote and not a voice vote, due to the constitutional requirement that the vote be by the "yeas and nays." A motion to reconsider the vote on the question of overriding a veto is in order only if the Senate fails to override the veto. In other words, if two-thirds of the Senators agree to override the veto, a motion to reconsider that vote is not in order. If the Senate fails to override a veto of a Senate-originated bill (S. or S.J. Res.), then the question of override never reaches the House. The Senate simply informs the House that the override vote on a House or Senate bill was unsuccessful. If the override vote on a Senate-originated measure (S. or S.J. Res.) is successful in the Senate, the bill and veto message are sent to the House for action. If the override vote on a House-originated measure (H.R. or H.J. Res.) is successful, then the bill becomes law, because two-thirds of both chambers have agreed to override the veto.
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A bill or joint resolution that has been vetoed by the President can become law if two-thirds of the Members voting in the House and the Senate each agree to pass it over the President's objection. The chambers act sequentially on vetoed measures: The House acts first on House-originated measures (H.R. and H.J. Res.), and the Senate acts first on Senate-originated measures (S. and S.J. Res.). If the first-acting chamber fails to override the veto, the other chamber cannot consider it. The House typically considers the question of overriding a presidential veto under the hour rule, with time customarily controlled and allocated by the chair and ranking member of the committee with jurisdiction over the bill. The Senate usually considers the question of overriding a veto under the terms of a unanimous consent agreement.
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On December 20, 2018, President Trump signed into law a new five-year omnibus farm bill, the Agricultural Improvement Act of 2018 ( P.L. 115-334 ; the 2018 farm bill). The U.S. Department of Agriculture (USDA) will implement the provisions, most of which take effect in calendar year 2019. The 2018 farm bill includes 12 titles covering different program areas. The first title, Title I—Commodities, authorizes several major revenue support and disaster assistance programs (see shaded box below). This report briefly describes the major revenue support programs in Title I of the 2018 farm bill. In addition, it reviews changes to key administrative provisions such as program eligibility and signup, payment acres and yields, payment limits, and cost projections. Appendixes at the end of this report ( Table A-1 to Table A-5 ) provide side-by-side comparisons of the provisions for five of the subtitles of Title I with prior law (as indicated in the shadow box above—Subtitle C, sugar, and Subtitle D, dairy, are discussed elsewhere). Aside from dairy and sugar, which have their own specific programs, most grain and oilseed crops produced in the United States are eligible for two tiers of revenue support under Title I of the 2018 farm bill. Specialty crops such as fruits, vegetables, and tree nuts are not covered. The first tier of support is provided by the Marketing Assistance Loan (MAL) program, which offers a minimum price guarantee for production of "loan" commodities in the form of a short-term loan at statutorily set prices ( Table 1 ). The MAL program may be supplemented by a higher, second tier of revenue support comprised of two other programs: (1) the Price Loss Coverage (PLC) program, which provides price protection via statutory fixed "reference" prices for eligible crops, or (2) the Agricultural Risk Coverage (ARC) program, which provides revenue protection via historical moving average revenue guarantees based on the five most recent years of crop prices and yields. PLC and ARC are available for producers that own or rent historical "base" acres of "covered" commodities. The sugar and dairy sectors are supported by separate federal farm programs that are tailored more specifically to the physical differences associated with each of their products—refined sugar and liquid fresh milk—and their respective markets. Disaster assistance is available for producers of most tree crops and livestock. The Noninsured Crop Assistance Program is available for all agricultural commodities that are not covered by a federal crop insurance policy. All of these Title I programs existed under the previous 2014 farm bill. The 2018 farm bill extends their authority through crop year 2023 but with some modifications to most of them. Occasionally, agricultural producers may receive federal support under programs authorized outside of the farm bill. The Secretary of Agriculture has broad latitude under the authority of the Commodity Credit Corporation (CCC) Charter Act to make direct payments in support of U.S. agriculture. Two such programs implemented in recent years under CCC authority are the Cotton Ginning Cost Share program and the Market Facilitation Program. Separately, under the federal crop insurance program, Title I program commodities—along with more than 100 other crops including fruits and vegetables—are also eligible for subsidized crop insurance, which provides within-year yield (or revenue) protection. The federal crop insurance program is permanently authorized outside of the omnibus farm bill by the Federal Crop Insurance Act (7 U.S.C. §1501 et seq. ). The 2018 farm bill includes Title XI—Crop Insurance, which makes minor adjustments to program implementation but does not alter the underlying authority of the federal crop insurance program. Neither the federal crop insurance program nor programs authorized under the CCC Charter Act are discussed in this report. Federal farm support began in the 1930s through Depression-era efforts to raise farm household income when commodity prices were low because of prolonged weak consumer demand. While initially intended to be a temporary effort, the commodity support programs have continued. However, several of them have been modified away from supply control and management of commodity stocks (which was designed to prop up prices) that directly linked support payments to farm production activities into decoupled revenue support that makes payments on historical program acres—referred to as base acres. Proponents of farm revenue support programs argue that federal involvement in the sector is needed to stabilize and support farm incomes by shifting some of the production risks to the federal government. These risks include short-term market price instability often due to weather or international events—both of which are outside the farmer's control. Proponents see the goal of farm policy as maintaining the economic health of the nation's farm sector so that it can use its comparative advantage in supplying domestic demand and competing in the global market for food and fiber. Critics argue that farm revenue support programs waste taxpayer dollars, distort producer behavior in favor of certain crops, capitalize benefits to the owners of the resources, encourage concentration of production, and comparatively harm smaller domestic producers and farmers in lower-income foreign nations. The authority for USDA to operate farm revenue support programs comes from three permanent laws, as amended: the Agricultural Adjustment Act of 1938 (P.L. 75-430), the Agricultural Act of 1949 (P.L. 81-439), and the CCC Charter Act of 1948 (P.L. 80-806). Congress typically alters these laws through multi-year omnibus farm bills to address current market conditions, budget constraints, or other concerns. If a new farm bill is not enacted when an old one expires, farm programs would revert to the permanent laws mentioned above for most of the major program crops. Under permanent law, eligible commodities would be supported under a parity-price formula at levels much higher than they are now, and many of the currently supported commodities might not be eligible. Since reverting to permanent law is incompatible with current national economic objectives, global trading rules, and federal budgetary policies, pressure builds at the end of each farm bill for policymakers to enact another. The 2018 farm bill ( P.L. 115-334 ) contains the most recent version of the farm commodity support programs. It supersedes the commodity provisions of previous farm bills and includes a provision (Section 1702) that suspends the relevant price support provisions of permanent law for the crop (and marketing) years 2019-2023. Federal support exists for about two dozen farm commodities representing about one-third of gross farm sales. During the five marketing years of 2014 through 2018, six crops (corn, wheat, soybeans, peanuts, cotton, and rice) accounted for an estimated 92% of farm commodity program payments. The 2018 farm bill continues to define covered commodities as the crops eligible for the farm revenue support programs PLC and ARC: wheat, oats, barley (including wheat, oats, and barley used for haying and grazing), corn, grain sorghum, long-grain rice, medium-grain rice, seed cotton (unginned upland cotton that contains both lint and seed), pulse crops (dry peas, lentils, small chickpeas, and large chickpeas), soybeans, other oilseeds (including sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, and sesame seed), and peanuts (7 U.S.C. §9011). Each of these commodities has a statutorily defined PLC reference price (listed in Table 1 ). Upland cotton was removed from eligibility as a covered commodity by the 2014 farm bill ( P.L. 113-79 ). However, it indirectly regained its status as a covered commodity, via seed cotton, under the Bipartisan Budget Act of 2018 ( P.L. 115-113 ). "Loan commodities" include all of the "covered commodities" plus upland cotton, extra-long-staple cotton, wool, mohair, and honey. These commodities have statutory loan rates ( Table 1 ) and are eligible for the MAL program. Support for milk production is available in the form of subsidized protection for producer milk margins (milk prices minus feed costs) under the Dairy Margin Coverage program. Sugar support is indirect through import quotas, processor price guarantees, and domestic marketing allotments. No direct payments are made to sugar growers or processors. Livestock, poultry, fruits, vegetables, nuts, hay, and nursery products (about two-thirds of U.S. farm sales) are not eligible to participate in a Title I revenue support program under the 2018 farm bill. However, livestock and fruit tree producers may qualify for partial relief from losses related to natural disasters under one of the four permanently authorized agricultural disaster assistance programs under Title I of the 2018 farm bill. Also, subsidized federal crop insurance is available for more than 100 crops, including fruits, vegetables, and selected livestock activities that are not supported by Title I farm programs. Crop insurance is designed primarily to cover losses from natural disasters or disease and within-season price or revenue declines. Another Title I farm bill program—the Noninsured Crop Disaster Assistance Program—is available for crops not currently covered by crop insurance. The definition of farm used to administer the revenue support programs is different from common perception or statistical definitions of farm based on size or output. Under USDA's Farm Service Agency (FSA) regulations, a "farm" for program payment purposes is one or more tracts of land considered to be a separate operation. A producer must register each farm operation with USDA and identify the resources (land, labor, equipment, capital, and management) associated with it. Land in a farm does not need to be contiguous. However, all tracts within a farm must have the same operator and the same owner (unless all owners agree to combine multiple tracts into a single FSA farm). Thus, one producer may be operating several "farms" if he or she is renting land from several landlords or has purchased land in several tracts. B ase acres describes the historical planted acreage on each FSA farm using a multi-year average from as far back as the 1980s, for purposes of calculating program payments under one of the two revenue support programs—PLC or ARC. As of crop year 2015, USDA reported 273 million base acres, of which 254 million acres were enrolled in either ARC or PLC ( Figure 1 ). Base acres are calculated for each covered commodity and remain with the land when real estate is sold, thus making the new landowner eligible for farm programs. A farm's base acres may increase from year to year if base acres expire from a conservation contract or easement or a producer has eligible oilseed acreage as a result of the Secretary of Agriculture designating a new oilseed eligible as a covered commodity. Similarly, base acres may decline from year to year if some base acres are enrolled in a conservation easement; are converted to certain nonfarm or residential uses and are unlikely to return to agriculture; or are planted to fruits, vegetables, or wild rice in excess of certain planting flexibility rules. Under the PLC and ARC program payment-acre provisions (7 U.S.C. 9014; Table A-1 ), planting flexibility rules allow crops other than the program crop to be grown, but eligible payment acreage is reduced when fruits, vegetables (other than mung beans and pulse crops), or wild rice are planted in excess of 15% of base acres (or 35% depending upon a farmer's program choice discussed below). The reduction to payment acres is one-for-one for every acre in excess of these percentages for that year. A farm with base acres is not obligated to participate in farm programs. For those farms that do participate, once a farm's base acres are enrolled in either ARC or PLC, the farm does not have to plant a particular program crop to be eligible for a program payment. This is because ARC and PLC payments are decoupled from actual crop plantings. However, all participating producers must maintain conservation compliance, which requires planting a cover crop on highly erodible land. Under both the 2014 farm bill ( P.L. 113-79 ) and the Bipartisan Budget Act of 2018 ( P.L. 115-113 ), the calculation of base acres underwent several changes. These are briefly discussed next. Because a farmer's actual plantings may differ from farm base acres, program payments may not necessarily align with financial losses associated with market prices or crop revenue. To better match program payments with farm risk, the 2014 farm bill provided farmers with a one-time opportunity to update individual crop base acres by reallocating acreage within their current base portfolio to match their actual crop mix (plantings) during the crop years 2009-2012. Farmers could also choose to not reallocate their base acres if they expected payments to be maximized under their then-current base acres. Even after the opportunity to update base acres to better match actual farm plantings, disparities remained between base and planted acres ( Figure 2 ). The 2014 farm bill also removed upland cotton from eligibility for the ARC and PLC programs due to a ruling from a World Trade Organization dispute settlement case successfully brought by Brazil against U.S. cotton support programs. Former cotton base acres were renamed "generic base" and added to a producer's base for potential payments if a covered commodity (now excluding upland cotton) was planted on the farm. However, upland cotton remained eligible for the MAL program. In 2018, seed cotton was added as a covered commodity, but not as a MAL loan commodity, by the Bipartisan Budget Agreement (BBA) of 2018 ( P.L. 115-123 ). Under the BBA, producers were given a choice of how to allocate their generic base acres—either as base acres assigned to seed cotton or to another covered commodity and thus eligible for either ARC or PLC payments or into an unassigned pool where they would be ineligible for ARC or PLC program payments. The 2018 farm bill retained base acres as defined on September 30, 2018, under the 2014 farm bill and inclusive of the BBA changes. Thus, upland cotton remains ineligible for PLC or ARC but is so indirectly via seed cotton. The 2018 farm bill also added a provision (Section 1102(b)) regarding base-acre eligibility for ARC or PLC program payments. If base acres were planted continuously to grass or pasture (including fallow acres) during the nine-year period extending from January 1, 2009, through December 31, 2017, then those affected base acres are not eligible for ARC or PLC payments during the life of the 2018 farm bill—that is, during crop years 2019-2023. However, these acres would remain eligible to be counted as base acres for a future farm bill. The 2018 farm bill defines producer (for purposes of revenue support program benefits) as an owner-operator, landlord, tenant, or sharecropper who shares in the risk of producing a crop and is entitled to a share of the crop produced on the farm. Participation in revenue support programs is free. However, an individual must comply with certain requirements to be eligible for most program payments. These requirements include: Actively engaged in farming (AEF) . Each individual must provide a significant contribution of capital (land or equipment) and personal labor or active personal management to the farm operation, share in the risk of loss from the farm operation, and receive a share of the output as compensation. Legal entities can be actively engaged if members collectively contribute personal labor or active personal management. Special classes allow landowners to be considered actively engaged if they receive income based on the farm's operating results without providing labor or management (as described below). Conservation co mpliance . A producer agrees to maintain a minimum level of conservation on highly erodible land and not to convert or make production possible on wetlands. Adjusted gross income (AGI) thr eshold . Persons with combined farm and nonfarm AGI in excess of $900,000 are ineligible for most program benefits. Average AGI is measured from the three tax years prior to the most recent taxable year. The AGI limit may be waived on a case-by-case basis to protect environmentally sensitive land of special significance. Minimum farm size . A producer on a farm may not receive farm program payments if the sum of the base acres on the farm is 10 acres or less. Two producer groups are excluded from this prohibition: beginning farmers and ranchers and veteran farmers and ranchers. A farm operation usually involves some combination of owned and rented land. The amount of total land in farms rented by farm operators has ranged between 34% and 43% of farmland during 1964-2012. In 2014, an estimated 39% of farmland was rented—80% of rented farmland is owned by non-operator landlords. Two types of rental arrangements are common: cash rent and share rent. Under cash rental contracts, the tenant pays a fixed cash rent to the landlord. The landlord receives the same rent irrespective of market conditions, bears no risk in production, and thus fails to meet the AEF criteria and is not eligible to receive program payments. The tenant bears all of the risk, takes all of the harvest, and receives all of the program payment. Even though tenants might receive all of the government payments under cash rent arrangements, they might not keep all of the benefits if landlords demand higher rent. Economists widely agree that a large portion of government farm payments passes through to landlords, since government payments boost the rental value of land. Under share rental contracts, the tenant usually supplies most or all of the labor and machinery, while the landlord supplies land and perhaps some machinery or management. Both the landlord and the tenant bear risk in producing a crop and receive a portion of the harvest. In most cases, both meet the AEF criteria and are eligible to share in the government subsidy. The farm revenue support program provisions from Title I of the 2014 farm bill are largely preserved under the 2018 farm bill but with some modifications, as identified below. The MAL program has been in existence, in one form or another, since the 1930s. Its longevity as a farm program derives from its utility at providing both short-term financing and a guaranteed floor price. This is done by offering producers a nonrecourse nine-month loan—valued at a commodity-specific, statutorily-fixed loan rate—for all harvested production of qualifying crops. These qualifying crops are referred to as loan commodities ( Table 1 ). Because MAL benefits are directly linked to the harvested output, benefits are said to be "coupled." No pre-planting signup is necessary to participate in the MAL program, and a producer does not need to own or rent base acres to be eligible. However, a producer must have a harvested crop to use as collateral for the loan. Thus, if a producer suffers a crop failure due to a natural disaster and has no marketable crop, the MAL program is not available as a program option. At harvest time, crop prices are usually at their lowest point for the year because of the large supply of harvested crops entering the marketplace at the same time. To avoid selling into a weak market, the MAL program offers producers the option to put a harvested loan commodity under a nine-month nonrecourse loan valued at a statutorily fixed, per-unit commodity loan rate ( Table 1 ) using the crop as collateral. Thus, MAL benefits are coupled to the harvested crop. Nonrecourse means that USDA must accept the pledged crop (i.e., the collateral) as full payment of an outstanding loan if the collateral is forfeited. During the nine-month loan period, producers will consider whether market prices are above or below the MAL loan rate. If they are above the loan rate, producers will pay off their loans and reclaim their collateral crops to sell into the higher priced marketplace. However, if market prices are below the loan rate, then producers may consider forfeiting their crop to USDA and keeping the loan value as payment. Thus, the statutory loan rate, in effect, establishes a price guarantee. Under the 2018 farm bill a producer has additional choices besides forfeiture in claiming MAL benefits when market prices are low (see " Policy Evolution of the MAL Program " section below). In the 1960s, 1970s, and 1980s, during extended periods when commodity prices were below the MAL loan rates, many producers chose to forfeit their crops to USDA rather than repay their MAL loans at the higher loan rate. These forfeitures led to large accumulations of grain and oilseed stocks by USDA. These government-held stocks were costly to taxpayers and contributed to market conditions of oversupply. In the 1980s and 1990s, Congress redesigned the MAL program to avoid government stock accumulation by offering alternative repayment prices to the statutory loan rates (see box below). Under current law, prior to loan maturity, producers may compare the repayment prices announced by USDA for their localities with the statutory MAL loan rates for each eligible commodity before selecting from among several potential MAL program benefits. Under current law (as continued by the 2018 farm bill), a producer with a commodity under an MAL loan has several repayment options. If the USDA-announced repayment rate is at or above the loan rate, the farmer repays the loan principal and interest and reclaims the commodity. In contrast, when the announced repayment rate is below the loan rate, the farmer may choose from among four potential options: Loan deficiency payment ( LDP ). Rather than putting the harvested crop under an MAL, a farmer may request an LDP with the per-unit payment rate equal to the difference between the loan rate and loan repayment rate. The farmer receives the LDP payment and keeps the crop to sell or use on farm. Marketing loan gain (MLG) . A participating farmer with a crop under an MAL loan can repay the loan at the USDA-announced repayment price and pocket the difference (between the loan rate and the repayment rate) as an MLG. The farmer keeps the MLG and the crop to sell or use on farm. Commodity certificate exchange . A farmer may use commodity certificates—paper certificates with a dollar denomination that may be exchanged for commodities in USDA inventory—to repay an MAL loan at the lower USDA-announced price and keep the associated price gain. The farmer keeps the gain and the crop to sell or use on farm. Forfeiture . A producer can forfeit the pledged crop to USDA at the end of the loan period. The producer may keep any price gains associated with forfeiture but relinquishes access to the crop. The level of revenue support provided by the MAL program varies with market conditions and the relationship between MAL loan rates and market prices. The 2018 farm bill raised MAL loan rates for several loan commodities, including barley, corn, grain sorghum, oats, extra-long-staple cotton, sugar, rice, soybeans, dry peas, lentils, and small and large chickpeas. The MAL program's usefulness as a risk management and marketing tool varies widely across program crops depending on the relationship between farm prices and the statutory loan rates. Under the 2018 farm bill (Section 1703): MAL benefits are no longer subject to annual payment limits (this includes MLG and LDP benefits, as well as any gains under commodity certificates and forfeiture). Under the previous 2014 farm bill: MLG and LDP benefits combined with payments under PLC and ARC were subject to a payment limit of $125,000 per person for all covered commodities (except peanuts, which has a separate limit of $125,000). However, MAL gains under commodity certificates and forfeiture were excluded from payment limits. A second tier of revenue support is available under the PLC and ARC programs. PLC and ARC provide income support to covered commodities at levels above the price protection offered by the MAL program's loan rates. ARC and PLC were first authorized under the 2014 farm bill ( P.L. 113-79 ). The 2018 farm bill extends both programs but with several modifications intended to increase producer flexibility in their use. Participation is free. However, a producer must own or rent base acres to participate. In addition, a producer must elect ARC or PLC for the farm's historical base acres and enroll his or her farm operation in the elected program. Unlike MAL payments, which are coupled to harvested crops, PLC and ARC payments are decoupled and made proportional to base acres. Producers choose between PLC and ARC depending on their preference for protection against a decline in (a) crop prices or (b) crop revenue, respectively. Payments under the PLC program are triggered when the national market-year average farm price (MYAP) for a covered commodity is below its "effective reference price" ( Figure 3 ). In contrast, ARC payments are triggered when crop revenue is below its guaranteed level based on a multi-year moving average of historical crop revenue ( Figure 5 ). Producers can elect ARC at either the county (ARC-CO) or individual farm (ARC-IC) level. PLC and ARC-CO choices can vary by "covered" commodities (for a list of covered commodities, see Table 1 ), whereas ARC-IC includes all "covered" commodities on a farm under a single whole-farm revenue guarantee. Under the 2014 farm bill, producers had a one-time choice between ARC and PLC, on a commodity-by-commodity basis that lasted for five crop years (2014-2018). In contrast, the 2018 farm bill allows producers to alter their program choices more frequently. In 2019, producers may select ARC or PLC coverage, on a commodity-by-commodity basis, effective for both crop years 2019 and 2020. If no initial choice is made, then the default is whichever program was in effect during crop years 2015 through 2018 under the 2014 farm bill. Then, beginning in 2021, producers may again choose (i.e., make a new election) between ARC and PLC annually by covered commodity for each of crop year 2021, 2022, and 2023. In addition, producers now may remotely and electronically sign annual or multi-year contracts for ARC and PLC. PLC price protection is based on a statutorily fixed reference price ( Table 1 ) that may be temporarily increased under certain conditions. Under the 2014 farm bill version of the PLC program, producers received payments on a portion of their enrolled base acres when the national MYAP for the enrolled covered commodity was below its reference price set in statute. This option was attractive if farmers expected farm prices to drop below the reference price for a covered commodity. The 2018 farm bill added a provision (Section 1101) that replaced the statutory reference price with an "effective reference price" that may increase to as much as 115% of the statutory PLC reference price based on market conditions. The effective reference price is determined by a formula as the higher of the statutory reference price or 85% of the five-year Olympic average of the national MYAP for the five preceding years. Under the 2018 farm bill, the PLC program will make a payment when the MYAP for a covered commodity is less than the effective reference price. See Figure 3 for a graphical interpretation of the formula and Figure 4 for a hypothetical example for rice. The farm's total PLC payments for a covered commodity may be calculated as follows: The PLC per-unit payment rate equals the difference between the effective PLC reference price and the higher of the MYAP or the MAL loan rate. The PLC per-acre payment rate equals the PLC per-unit payment rate times the program yield (described below). The PLC total payment equals the PLC per-acre payment rate times 85% of base acres signed up for the respective covered commodity. PLC payment yields are similar to base acres in that they are historical farm-level, crop-specific measures that are used to determine program payments under the PLC program. Producers were given the option of updating their payment yields under the 2002, 2014, and 2018 farm bills. Under the 2014 farm bill, producers were given an opportunity to update payment yields, on a covered-commodity-by-covered-commodity basis, using 90% of average yields for the 2008-2012 crop years—excluding any year in which acreage planted to the covered commodity was zero. Producers could also use a "plug" yield in the update calculation, equal to 75% of the five-year average county yield for a covered commodity, if the farm-level yield for any of the 2008-2012 crop years was less than 75% of the average county yield during that period. The yield update election had to be made so as to be in effect beginning with the 2014 crop year. Under the 2018 farm bill, producers could again update program yields, on a covered-commodity-by-covered-commodity basis, using 90% of the average of the yield per planted acre for the 2013-2017 crop years. However, unlike the 2014 farm bill yield update which used the simple average for the data period, the 2018 farm bill yield update was subject to a commodity-specific adjustment factor to account for any national increase in trend yield. Producers could again use a "plug" yield in the update calculation, equal to 75% of the average county yield for a covered commodity during the 2013-2017 crop years, if the farm-level yield for any year was less than 75% of the average county yield during that period. Any year in which planted acreage to the covered commodity was zero could be excluded from the calculation. The yield update election must be made so as to be in effect beginning with the 2020 crop year. Producers more concerned about declines in crop revenue (i.e., yield times price) than price can select the county ARC program (ARC-CO) as an alternative to PLC for each covered commodity. Under ARC-CO, payments are triggered when the annual county revenue for a covered commodity is less than 86% of its recent five-year average revenue. If farmers prefer farm-level revenue protection based on farm-level yields, then they could choose to combine all covered commodities into a single, whole-farm revenue guarantee under the farm-level "individual" ARC (ARC-IC) program. The ARC-CO program has a county revenue guarantee, and only a crop revenue loss at the county level triggers a payment. The ARC-CO crop revenue guarantee equals 86% of the county benchmark revenue ( Figure 5 ). The benchmark revenue is the product of the five-year Olympic average of county yields (measured as units of output per acre) and the five-year Olympic average of the higher of the national MYAP or the PLC effective reference price. An ARC-CO payment is made if the current-year county revenue (calculated as the product of county yield and national MYAP) is below the ARC-CO revenue guarantee. The ARC-CO payment rate, which equals the difference between the per-acre county revenue guarantee and the actual county per-acre crop revenue, is capped at 10% of benchmark revenue. With the revenue guarantee set at 86% of the benchmark revenue, the producer absorbs the first 14% of any shortfall, and the government absorbs the next 10% of revenue shortfall. Remaining losses may be backstopped by crop insurance if purchased at sufficient coverage levels by the producer and by the MAL program. Similar to PLC, the ARC-CO payment formula for a particular covered commodity is the ARC-CO payment rate times 85% times the number of base acres enrolled in ARC-CO. See Figure 5 for a graphical interpretation of the formula and Figure 6 for a hypothetical example for corn. Under the 2014 farm bill, USDA's National Agricultural Statistics Service (NASS) was the primary source for the county yield estimates used in the ARC-CO formulas. However, when USDA announced its first ARC-CO payments under the then-new program in 2015, significant discrepancies in county-level payments were discovered. These discrepancies appeared to be due, in part, to how average county yield calculations were being made. If a county lacked sufficient NASS data, then USDA would use Risk Management Agency (RMA) yield data based on crop insurance program participation. A comparison of the two estimates suggested that RMA yields were frequently higher than NASS yields at the county level. As a result, payments to producers in counties where RMA yields were used could be substantially lower than payments in counties using NASS yields. Congress showed interest in minimizing such discrepancies. Since RMA yield data were more widely available at the county level than NASS yield data, there was considerable debate about switching yield data prioritization for ARC-CO calculations to the RMA data. Under the 2018 farm bill (Section 1107), yield data from RMA are made the primary source for county average yield calculations for the ARC-CO benchmark revenue. Where RMA data are not available, USDA is to determine the data source considering data from NASS or the yield history of representative farms in the state, region, or crop-reporting district. Also, ARC-CO is to use a trend-adjusted yield to calculate the benchmark revenue, as is done by RMA for the federal crop insurance program. Finally, the five-year Olympic average county yield calculations are to include a yield plug (equal to 80% of the 10-year average county yield) for each year where actual county yield is lower than the estimated plug. Other 2018 farm bill (Section 1107) modifications to ARC-CO include allowing yields used in ARC-CO revenue calculations to be calculated separately for irrigated and non-irrigated land in each county and basing ARC-CO payments on the physical location of the farm—farms that cross multiple counties are prorated for each county. Finally, up to 25 counties nationwide may subdivide for ARC-CO yield calculations to reflect significant yield deviations within a county. Such subdivision is to be based on certain criteria: A county must be larger than 1,400 square miles and have more than 190,000 base acres. Instead of an ARC-CO revenue guarantee on a crop-by-crop basis, farmers could select a farm-level guarantee that includes all covered commodities on a farm under one revenue guarantee. The farm-level revenue guarantee is again based on a five-year moving average of farm-level yields for each crop year, multiplied by the higher of the reference price or the MYAP, that aggregates all crop revenue into a single, whole-farm guarantee. The individual ARC payment formula is 65% times the number of total base acres for the farm times the difference between the whole-farm revenue guarantee and the actual whole-farm crop revenue. The calculation for the guarantee and actual revenue are based on the aggregation of all covered commodities on the farm using individual farm yields instead of county yields. A participating farmer does not have to plant or harvest a covered commodity to receive a PLC or ARC payment. However, a portion of the farm's base acres must be enrolled in either PLC or ARC for that covered commodity. This is because ARC-CO, ARC-IC, and PLC payments are decoupled: Payments are made on a portion of a crop's enrolled base acres rather than actual production. If ARC-CO or PLC program payments are triggered, then they are made on 85% of the producer's base acres that were enrolled for that covered commodity irrespective of actual plantings. ARC-IC payments are made on a reduced 65% of base acres. Payments are made with a lag of approximately one year, as a full 12-month marketing year must be completed to compile the annual price and yield data necessary for USDA's calculations. According to statute (Section 1106 for PLC, Section 1107 for ARC), USDA is to announce payments no later than 30 days after the end of each marketing year. However, the actual payments may not be made prior to October 1 after the end of the applicable marketing year for the covered commodity. The marketing year varies by crop. For example, the marketing year for corn or soybeans harvested in fall 2019 ends on August 31, 2020. Thus, corn and soybean payments must be announced by September 30, 2020, but may not be made before October 1, 2020. The enacted 2018 farm bill sets a $125,000 per-person cap on the total combined payments of PLC and ARC for all covered commodities on a farming operation except peanuts, which has a separate $125,000 limit. In addition, a provision in the 2018 farm bill (Section 1603) specifies that any reductions in PLC and ARC payments due to sequestration must be applied before evaluating payment limit criteria. The 2018 farm bill (Section 1703) removed MAL program payments from any payment limit criteria. Payment limits may be doubled if the farm operator has a spouse. On family farming operations, all family members ages 18 or older are deemed to meet AEF criteria and are eligible for a separate payment limit. Prior to the 2018 farm bill, family membership was based on lineal ascendants or descendants but was also extended to siblings and spouses. The 2018 farm bill (Section 1703(a)(1)(B)) expands the definition of family farm to include cousins, nephews, and nieces. Producers of upland cotton may also benefit from payments under two 2018 farm bill provisions: Section 1203(b), which provides economic adjustment assistance to users of upland cotton, and Section 1201(b)(2), which authorizes cotton storage cost reimbursements under certain market conditions. Economic adjustment assistance payments are made to domestic users for all documented use of upland cotton on a monthly basis, regardless of the origin of the upland cotton (imported or domestic). The payment rate is $0.03 per pound. Although the payments are made to cotton users, at least a portion of the payment is likely returned to producers in the form of higher prices associated with the increased demand from domestic users. The cotton storage cost reimbursement is generally referred to as a storage credit, since it is used to reduce the loan repayment rate by a portion of the accrued storage costs for upland cotton that has been placed under a MAL loan. It does not involve any actual CCC budgetary outlay but rather is a reduction in potential receipts from the CCC budget. The availability of a cotton storage credit is determined by the relationship between the MAL rate for upland cotton, the weekly announced average world price, and the accrued interest and storage charges specific to each bale of cotton placed under the MAL program. Federal crop insurance directly intersects with farm programs when producers choose between the ARC and PLC programs. For producers who select the PLC, additional price protection is available by purchasing Supplemental Coverage Option (SCO). SCO is a crop insurance product that was permanently authorized under the 2014 farm bill (Section 11003). SCO is designed to cover part of the deductible on a producer's underlying crop insurance policy. SCO is not available for base acres enrolled in ARC. The sugar (Subtitle C) and dairy (Subtitle D) programs are essential parts of Title I of the 2018 farm bill. However, their programs differ markedly from the MAL, PLC, and ARC programs. Neither dairy nor sugar program benefits are subject to any per-person payment limit. In addition, the commodities themselves differ from the other Title I commodities (primarily grain and oilseed crops) in the nature of their output—fluid milk and refined sugar, how these commodities are processed and stored, and the markets that they are sold into. As a result, the dairy and sugar programs are briefly discussed below but are described in more detail in other reports. The current U.S. dairy program—known as the Dairy Margin Coverage (DMC) program—was first authorized by the 2014 farm bill under the previous name of Margin Protection Program (MPP). The DMC offers milk producers a range of milk price margin protection levels based on their historical milk production. The milk margin is defined as the difference between the farm price per hundred pounds (cwt) of milk and the price of a representative feed ration based on USDA-announced prices for milk and major feed ingredients (corn, soymeal, and alfalfa hay). The DMC pays participating dairy producers the difference (when positive) between a producer-selected DMC margin protection level and the actual national milk margin. Producers must sign up for the program and pay an administrative fee of $100. Producers choose coverage either at the free $4.00/cwt margin or pay a premium that increases for higher milk production coverage levels and higher margin protection thresholds. The 2018 farm bill significantly revised the margin program, including renaming it as the DMC. Premium rates for the first 5 million pounds of milk coverage were lowered; the range of margin protection for the first 5 million pounds of production was expanded (the previous range was $4.50/cwt to $8.00/cwt; the new range is $4.50/cwt to $9.50/cwt); the range of margin protection available for the production beyond the first 5 million pounds retains the previous $4.50-$8.00/cwt range of choices but with slightly higher premiums; and producers may now cover a larger quantity of milk production (up to 95% of their historical base production). DMC is authorized through December 31, 2023. Also, under the 2018 farm bill, dairy producers may receive a 25% discount on their premiums if they select and lock in their margin and production coverage levels for the entire five years (calendar years 2019-2023) of the DMC program. Otherwise, producers may select coverage levels annually. Also under DMC, dairy producers may apply to USDA for reimbursement of MPP premiums paid, less any payments received, during calendar years 2014-2017. Unlike MPP, the DMC program allows dairy producers to participate in both margin coverage and the Livestock Gross Margin-Dairy insurance program that insures the margin between feed costs and a designated milk price. Current law mandates that raw cane and refined beet sugar prices are supported through a combination of limits on domestic output that can be sold (marketing allotments), nonrecourse marketing assistance loans for domestic sugar (but at the processor level), quotas that limit imports, and a sugar-to-ethanol backstop program (Feedstock Flexibility Program). These sugar program features result in essentially no federal outlays. The only change to the sugar program under the 2018 farm bill was a 5% increase in the MAL rate for raw cane and refined beet sugar ( Table 1 ). U.S. producers of both sugar and milk receive important price support via import protection from international competitor products under tariff-rate quotas (TRQs). Such TRQ support does not incur a direct cost to the federal government. Instead, domestic consumers bear the costs. For example, despite incurring no federal outlays, the U.S. government notifies sugar TRQ protection annually to the World Trade Organization as market price support (valued at over $1.4 billion in 2014). Four disaster assistance programs that focus primarily on livestock and tree crops were permanently authorized in the 2014 farm bill. These disaster assistance programs provide federal assistance to help farmers and ranchers recover financially from natural disasters, including drought and floods. Participation is free. The Livestock Indemnity Program (LIP) compensates producers at a rate of 75% of market value for livestock mortality or livestock sold at a loss. Eligible loss conditions may include (1) extreme or abnormal damaging weather that is not expected to occur during the loss period for which it occurred, (2) disease that is caused or transmitted by a vector and is not susceptible to control by vaccination, and (3) an attack by animals reintroduced into the wild by the federal government or protected by federal law. The Livestock Forage Disaster Program (LFP) provides payments to eligible livestock producers who have suffered grazing losses on drought-affected pastureland (including cropland planted specifically for grazing) or on rangeland managed by a federal agency due to a qualifying fire. The Tree Assistance Program (TAP) provides payments to eligible orchardists and nursery growers to replant or rehabilitate trees, bushes, and vines damaged by natural disasters, disease, and insect infestation. Eligible losses must exceed 15% after adjustment for normal mortality. Payments cover 65% of the cost of replanting trees or nursery stock and 50% of the cost of rehabilitation (e.g., pruning and removal). The Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP) provides payments to producers of livestock, honey bees, and farm-raised fish as compensation for losses due to disease, adverse weather, feed or water shortages, or other conditions (such as wildfires) that are not covered under LIP or LFP. The 2018 farm bill amended the permanent agricultural disaster assistance programs by expanding the definition of eligible producer to include Indian tribes or tribal organizations. It also expanded payments under LIP for livestock losses caused by disease and for losses of unweaned livestock that occur before vaccination. It increased replanting and rehabilitation payment rates for orchardists who are beginning farmers or veterans under TAP. Finally, it removed payment limits on ELAP. Of the four disaster assistance programs, only the LFP is now subject to the $125,000 per-person payment limit. NAP is available for production of all agricultural commodities that are not covered by a federal crop insurance policy. NAP was permanently authorized by the 1996 farm bill (Federal Agriculture Improvement and Reform Act; P.L. 104-127 ). The 2018 farm bill (Section 1601) amended NAP by increasing the per-crop signup fee to $325 per crop, or $825 per producer per county, but not to exceed $1,950 per producer. Also, NAP eligibility was expanded to include crops that may be covered by select forms of crop insurance but only under whole farm plans or weather index policies. The 2018 farm bill also amended the payment calculation to consider the producer's share of the crop. NAP offers both catastrophic coverage (a crop loss of at least 50% valued at 55% of the average market price) and additional buy-up coverage (ranging from 50% to 65% of established yields and 100% of the average market price). The 2018 farm bill made buy-up coverage permanent, added data collection and program coordination requirements, and created separate payment limits for catastrophic ($125,000 per person) and buy-up ($300,000 per person) coverage. CBO projects USDA spending for Title I farm commodity and disaster programs under the 2018 farm bill at $31.3 billion for the five-year 2019-2023 period. This translates to $6.3 billion annually, including projected annual outlays of $4.1 billion for PLC and $1.2 billion for ARC ( Table 2 ). This contrasts with estimated annual outlays on Title I programs under the 2014 farm bill of $7.2 billion, including $1.8 billion for PLC and $3.3 billion for ARC. Under the 2014 farm bill, most acres of corn, soybeans, and wheat—the three largest crops produced annually in the United States—were enrolled in ARC (93%, 97%, and 56%, respectively). This preference for enrollment in ARC contributed to larger annual payment outlays under ARC ($3.3 billion per year on average) than PLC ($1.8 billion per year) under the 2014 farm bill. CBO's spending projections assume that a large proportion of producers will switch from participating in ARC to PLC under the 2018 farm bill ( Figure 7 ). The assumed shift in participation between the two programs is driven by projections of farm prices for major program crops to track near or below PLC reference prices throughout the 10-year projection period, thus implying greater potential for PLC payments. The substantial projected shift in participation from ARC to PLC is projected to result in significantly larger annual outlays under the PLC program ($4.1 billion per year) than under the ARC program ($1.2 billion per year) under the five-year life of the 2018 farm bill, crop years 2019-2023 ( Table 2 and Figure 8 ). Annual program outlays can be highly variable. This is because spending on the farm revenue support programs—MAL, PLC, and ARC—is market-driven, and disaster assistance payments are associated with unpredictable acts of nature. Given the counter-cyclical design of the PLC and ARC programs, if commodity prices turn out to be higher than projected, then outlays will be lower than projected levels (and vice versa). This appendix provides a side-by-side comparison of provisions from Title I (the Commodity title) of the 2018 farm bill with prior law—that is, provisions from Title I of the 2014 farm bill ( P.L. 113-79 ) as amended by subsequent law including the Bipartisan Budget Agreement (BBA) of 2018 ( P.L. 115-123 ). The BBA made substantial changes to both the dairy program and the treatment of cotton under the PLC and ARC programs. Each subtitle (A-G) is individually examined in a separate table with the exception of Subtitle C (Sugar) and Subtitle D (Dairy), which are examined in more detail by other CRS products. This appendix includes the following tables by subtitle. Table A-1. Subtitle A—Commodity PolicyTable A-2. Subtitle B—Marketing LoansTable A-3. Subtitle E—Supplemental Agricultural Disaster AssistanceTable A-4. Subtitle F—Noninsured Crop AssistanceTable A-5. Subtitle G—Administration For information on the dairy and sugar programs and their explicit legislative text, see: CRS Report R45525, The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison , coordinated by Mark A. McMinimy; CRS In Focus IF10750, Farm Bill Primer: Dairy Safety Net , by Joel L. Greene; CRS In Focus IF10833, Dairy Provisions in the Bipartisan Budget Act (P.L. 115-123) , by Joel L. Greene; CRS In Focus IF10223, Fundamental Elements of the U.S. Sugar Program , by Mark A. McMinimy; and CRS Report R43998, U.S. Sugar Program Fundamentals , by Mark A. McMinimy.
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The farm commodity program provisions in Title I of the Agricultural Improvement Act of 2018 (P.L. 115-334; the 2018 farm bill) include revenue support programs for major program crops and permanent agricultural disaster assistance programs for producers of most tree crops and livestock. Aside from dairy and sugar, which have their own specific programs, most grain and oilseed crops produced in the United States are eligible for two tiers of revenue support under Title I of the 2018 farm bill—specialty crops such as fruits, vegetables, and tree nuts are not covered. The first tier of support is provided by the Marketing Assistance Loan (MAL) program, which offers interim financing for production of "loan" commodities in the form of a nine-month nonrecourse loan at statutorily set prices. A producer must have a harvested crop to offer as collateral for the MAL loan. Nonrecourse means that, if forfeited, USDA must accept the crop pledged as collateral as full payment of an outstanding loan. Thus, the statutory loan rates serve as minimum price guarantees for eligible commodities. The MAL program may be supplemented by a higher, second tier of revenue support comprised of (1) the Price Loss Coverage (PLC) program, which provides price protection at the national level via statutory fixed "reference" prices for eligible crops, or (2) the Agricultural Risk Coverage (ARC) program, which provides revenue protection via historical moving average revenue guarantees based on the five most recent years of national crop prices and county or farm average yields. Participation is free for both ARC and PLC. However, a producer must own or rent historical "base" acres of "covered" commodities. In addition, producers must sign up and elect either PLC or a county-coverage ARC program (ARC-CO) on a crop-by-crop basis or enroll all covered commodities together in a whole-farm revenue guarantee under an individual-coverage ARC program (ARC-IC). The dairy and sugar sectors are supported by separate federal farm programs that are tailored more specifically to the physical differences associated with each of their products—liquid fresh milk and refined sugar—and their respective markets. For dairy, the Dairy Margin Coverage (DMC) program offers producers milk margin protection for a range of margin thresholds—the milk margin equals the difference between the all-milk farm price and the price of a formula-based feed ration—and for a producer-selected portion (ranging from 5% to 95%) of historical milk production. Milk producers must sign up, select both margin and milk production coverage levels, and pay a premium that varies with coverage levels. The U.S. dairy sector also benefits from tariff-rate quotas (TRQs) on selected dairy products. The sugar program provides revenue support through a combination of limits on domestic output sales (marketing allotments), nonrecourse MAL loans for domestic sugar production (but at the processor level), a sugar-to-ethanol backstop program (Feedstock Flexibility Program), and quotas that limit imports. The import quotas for dairy and sugar are authorized outside of the omnibus farm bill. Disaster assistance is available for producers of most tree crops and livestock. The Noninsured Crop Assistance Program (NAP) is available for all agricultural production that is not covered by a federal crop insurance policy. All of these programs have permanent authority. However, the 2018 farm bill amends most of them. The enacted 2018 farm bill continues a $125,000 per-person cap on combined PLC and ARC payments but excludes MAL program benefits from the limit. The limit applies to the total from all covered commodities except peanuts, which has a separate $125,000 limit. To be eligible for payments, persons must be actively engaged in farming (AEF). Payment limits are doubled if the farm operator has a spouse. On family farming operations, all family members 18 years or older are deemed AEF and eligible for payments, including cousins, nephews, and nieces. The 2018 farm bill retains the adjusted gross income (AGI) limit for payment eligibility of $900,000. The Congressional Budget Office (CBO) projects outlays for Title I provisions of the 2018 farm bill for the five-year period (FY2019-FY2023) to average $6.3 billion compared with an estimated $7.2 billion in annual outlays under the 2014 farm bill. Based on projected market-price-to-PLC-reference price ratios, producers are expected to shift their preference toward PLC over ARC under the 2018 farm bill, resulting in a shift in program outlays concentrated more on PLC than ARC. The farm commodity program provisions in Title I of the Agricultural Improvement Act of 2018 (P.L. 115-334; the 2018 farm bill) include revenue support programs for major program crops and permanent agricultural disaster assistance programs for producers of most tree crops and livestock. Aside from dairy and sugar, which have their own specific programs, most grain and oilseed crops produced in the United States are eligible for two tiers of revenue support under Title I of the 2018 farm bill—specialty crops such as fruits, vegetables, and tree nuts are not covered. The first tier of support is provided by the Marketing Assistance Loan (MAL) program, which offers interim financing for production of "loan" commodities in the form of a nine-month nonrecourse loan at statutorily set prices. A producer must have a harvested crop to offer as collateral for the MAL loan. Nonrecourse means that, if forfeited, USDA must accept the crop pledged as collateral as full payment of an outstanding loan. Thus, the statutory loan rates serve as minimum price guarantees for eligible commodities. The MAL program may be supplemented by a higher, second tier of revenue support comprised of (1) the Price Loss Coverage (PLC) program, which provides price protection at the national level via statutory fixed "reference" prices for eligible crops, or (2) the Agricultural Risk Coverage (ARC) program, which provides revenue protection via historical moving average revenue guarantees based on the five most recent years of national crop prices and county or farm average yields. Participation is free for both ARC and PLC. However, a producer must own or rent historical "base" acres of "covered" commodities. In addition, producers must sign up and elect either PLC or a county-coverage ARC program (ARC-CO) on a crop-by-crop basis or enroll all covered commodities together in a whole-farm revenue guarantee under an individual-coverage ARC program (ARC-IC). The dairy and sugar sectors are supported by separate federal farm programs that are tailored more specifically to the physical differences associated with each of their products—liquid fresh milk and refined sugar—and their respective markets. For dairy, the Dairy Margin Coverage (DMC) program offers producers milk margin protection for a range of margin thresholds—the milk margin equals the difference between the all-milk farm price and the price of a formula-based feed ration—and for a producer-selected portion (ranging from 5% to 95%) of historical milk production. Milk producers must sign up, select both margin and milk production coverage levels, and pay a premium that varies with coverage levels. The U.S. dairy sector also benefits from tariff-rate quotas (TRQs) on selected dairy products. The sugar program provides revenue support through a combination of limits on domestic output sales (marketing allotments), nonrecourse MAL loans for domestic sugar production (but at the processor level), a sugar-to-ethanol backstop program (Feedstock Flexibility Program), and quotas that limit imports. The import quotas for dairy and sugar are authorized outside of the omnibus farm bill. Disaster assistance is available for producers of most tree crops and livestock. The Noninsured Crop Assistance Program (NAP) is available for all agricultural production that is not covered by a federal crop insurance policy. All of these programs have permanent authority. However, the 2018 farm bill amends most of them. The enacted 2018 farm bill continues a $125,000 per-person cap on combined PLC and ARC payments but excludes MAL program benefits from the limit. The limit applies to the total from all covered commodities except peanuts, which has a separate $125,000 limit. To be eligible for payments, persons must be actively engaged in farming (AEF). Payment limits are doubled if the farm operator has a spouse. On family farming operations, all family members 18 years or older are deemed AEF and eligible for payments, including cousins, nephews, and nieces. The 2018 farm bill retains the adjusted gross income (AGI) limit for payment eligibility of $900,000. The Congressional Budget Office (CBO) projects outlays for Title I provisions of the 2018 farm bill for the five-year period (FY2019-FY2023) to average $6.3 billion compared with an estimated $7.2 billion in annual outlays under the 2014 farm bill. Based on projected market-price-to-PLC-reference price ratios, producers are expected to shift their preference toward PLC over ARC under the 2018 farm bill, resulting in a shift in program outlays concentrated more on PLC than ARC.
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T he Congressional Review Act (CRA) allows Congress to review certain types of federal agency actions that fall under the statutory category of "rules." Enacted in 1996 as part of the Small Business Regulatory Enforcement Fairness Act, the CRA requires agencies to report the issuance of "rules" to Congress and provides Congress with special procedures under which to consider legislation to overturn those rules. A joint resolution of disapproval will become effective once both houses of Congress pass a joint resolution and it is signed by the President, or if Congress overrides the President's veto. For an agency's action to be eligible for review under the CRA, it must qualify as a "rule" as defined by the statute. The class of rules covered by the CRA is broader than the category of rules that are subject to the Administrative Procedure Act's (APA's) notice-and-comment requirements. As such, some agency actions, such as guidance documents, that are not subject to notice-and-comment rulemaking procedures may still be considered rules under the CRA and thus could be overturned using the CRA's procedures. The 115 th Congress used the CRA to pass, for the first time, a resolution of disapproval overturning an agency guidance document that had not been promulgated through notice-and-comment procedures. The resolution was signed into law by the President on May 21, 2018. In all of the previous instances in which the CRA was used to overturn agency actions, the disapproved actions were regulations that had been adopted through APA rulemaking processes. Congress's use of the CRA in this instance raised questions about the scope of the CRA and Congress's ability to use the CRA to overturn agency actions that were not promulgated through APA notice-and-comment procedures. Under the CRA, the expedited procedures for considering legislation to overturn rules become available only when agencies submit their rules to Congress. In many cases in which agencies take actions that meet the legal definition of a "rule" but have not gone through notice-and-comment rulemaking procedures, however, agencies fail to submit those rules. Thus, questions have arisen as to how Members can use the CRA's procedures to overturn agency actions when an agency does not submit the action to Congress. This report first describes what types of agency actions can be overturned using the CRA by providing a close examination and discussion of the statutory definition of "rule." The report then explains how Members can use the CRA to overturn agency rules that have not been submitted to Congress. Under the CRA, before a rule can take effect, an agency must submit to both houses of Congress and the Government Accountability Office (GAO) a report containing a copy of the rule and information on the rule, including a summary of the rule, a designation of whether the rule is "major," and the proposed effective date of the rule. For most rules determined to be "major," the agency must allow for an additional period to elapse before the rule can take effect—primarily to give Congress additional time to consider taking action on the most economically impactful rules—and GAO must write a report on each major rule to the House and Senate committees of jurisdiction within 15 days. The report is to contain GAO's assessment of the agency's compliance with various procedural steps in the rulemaking process. After a rule is received by Congress, Members have the opportunity to use expedited procedures to overturn the rule. A Member must submit the resolution of disapproval and Congress must take action on it within certain time periods specified in the CRA to take advantage of the expedited procedures, which exist primarily in the Senate. Those expedited, or "fast track," procedures include the following: a Senate committee can be discharged from the further consideration of a CRA joint resolution disapproving the rule by a petition signed by at least 30 Senators; any Senator may make a nondebatable motion to proceed to consider the disapproval resolution, and the motion to proceed requires a simple majority for adoption; and if the motion to proceed is successful, the CRA disapproval resolution would be subject to up to 10 hours of debate, and then voted upon. No amendments are permitted and the disapproval resolution requires a simple majority to pass. If both houses pass the joint resolution, it is sent to the President for signature or veto. If the President were to veto the resolution, Congress could vote to override the veto under normal veto override procedures. If a joint resolution of disapproval is submitted and acted upon within the CRA-specified deadlines and signed by the President (or if Congress overrides the President's veto), the CRA states that the "rule shall not take effect (or continue)." In other words, if part or all of the rule had already taken effect, the rule would be deemed not to have had any effect at any time. If a rule is disapproved, the status quo that was in place prior to the issuance of the rule would be reinstated. In addition, when a joint resolution of disapproval is enacted, the CRA provides that a rule may not be issued in "substantially the same form" as the disapproved rule unless it is specifically authorized by a subsequent law. The CRA does not define what would constitute a rule that is "substantially the same" as a nullified rule. The CRA governs "rules" promulgated by a "federal agency," using the definition of "agency" provided in the APA. That APA definition broadly defines an agency as "each authority of the Government of the United States, ... but does not include ... Congress; ... the courts of the United States; ... courts martial and military commissions." Accordingly, the CRA generally covers rules issued by most executive branch entities. In the context of the APA, however, courts have held that this definition excludes actions of the President. The more difficult interpretive issue is what types of agency actions should be considered "rules" under the CRA. The CRA adopts a broad definition of the word "rule" from the APA, but then creates three exceptions to that definition. This APA definition of "rule" encompasses a wide range of agency action, including certain agency statements that are not subject to the notice-and-comment rulemaking requirements outlined elsewhere in the APA: "[R]ule" means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing[.] The CRA narrows this definition by providing that the term "rule" does not include (A) any rule of particular applicability, including a rule that approves or prescribes for the future rates, wages, prices, services, or allowances therefor, corporate or financial structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing; (B) any rule relating to agency management or personnel; or (C) any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties. Determining whether any particular agency action is a rule subject to the CRA therefore entails a two-part inquiry: first, asking whether the statement qualifies as a rule under the APA definition and, second, asking whether the statement falls within any of the exceptions noted above to the CRA's definition of rule. These two steps are illustrated below in Figure 1 . This section of the report walks through the two elements of this inquiry in more detail. First, while the APA's definition of "rule" is expansive, courts have held that "Congress did not intend that the ... definition ... be construed so broadly that every agency action" should be encompassed under this provision. As a preliminary matter, courts have distinguished agency rulemaking actions from adjudicatory and investigatory functions. And under the statutory text, to qualify as a rule, an agency statement must meet three requirements: it must be "of general ... applicability," have "future effect," and be "designed to implement, interpret, or prescribe law or policy." Second, even if an agency statement does qualify as an APA "rule," the CRA expressly exempts three categories of rules from its provisions: rules "of particular applicability," rules "relating to agency management or personnel," and "any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties." Both inquiries are heavily fact specific, and require looking beyond a document's label to the substance of the agency's action. The CRA defines the word "rule" by incorporating in part the APA's definition of that term. Although there is very little case law interpreting the meaning of "rule" under the CRA, cases interpreting the APA's definition of "rule" may provide persuasive authority for interpreting the CRA because the CRA explicitly relies on that provision as the basis for its own definition of the term "rule." The APA provides a general framework governing most agency action—not only agency rulemaking, but also administrative adjudications. The APA accordingly distinguishes different types of agency actions, separating rules from orders and investigatory acts. These distinctions may also be relevant when deciding whether an agency action is a rule subject to the CRA. The APA distinguishes a "rule" from an "order," defining an "order" as "the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing." Orders are the product of agency adjudication, in contrast to rules, which result from rulemaking. To determine whether an agency action is a rule or an order in the context of the APA, courts look beyond the document's label to the substance of the action. One federal court of appeals described the distinction between rulemaking and adjudication as follows: First, adjudications resolve disputes among specific individuals in specific cases, whereas rulemaking affects the rights of broad classes of unspecified individuals.... Second, because adjudications involve concrete disputes, they have an immediate effect on specific individuals (those involved in the dispute). Rulemaking, in contrast, is prospective, and has a definitive effect on individuals only after the rule subsequently is applied. Courts have also distinguished rules from agency investigations. A separate provision of the APA addresses an agency's authority to compel the submission of information and perform "investigative act[s] or demand[s]." When agencies conduct investigative actions such as requiring regulated parties to submit informational reports, courts have held that they are not subject to the APA's rulemaking requirements. However, courts have also noted that some actions related to investigations may qualify as rules. For instance, in one case, a federal court of appeals observed that the procedures governing an agency's decision to investigate "are separate from and precede the agency's ultimate act," concluding that the procedures at issue constituted a rule. An agency statement will qualify as a "rule" under the APA definition if it (1) is "of general or particular applicability," (2) has "future effect," and (3) is "designed to implement, interpret, or prescribe law or policy." With regard to the first requirement, as the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) has noted, most agency statements will be "of general or particular applicability" and will fulfill this condition. The second requirement—that a rule be "of ... future effect" —is the subject of some ambiguity. Courts have largely agreed that this requirement is likely intended to distinguish agency rulemaking from agency adjudication. Courts often differentiate rules and orders by noting that orders are retrospective, while rules have "future effect." Rules operate prospectively, in the sense that they are intended to "inform the future conduct" of those subject to the rules. Additionally, courts have sometimes said that the "future effect" requirement excludes any agency statements that do not "bind the agency." Thus, for example, in a concurring opinion in a 1988 Supreme Court case, Justice Scalia suggested that the "future effect" requirement must be read to mean "that rules have legal consequences only for the future." He argued that the only way to distinguish rules from orders—which can have both future and past legal consequences—was to define rules as having only prospective operation. Judge Silberman of the D.C. Circuit, concurring in an opinion from that court, drew on Justice Scalia's interpretation of this requirement to argue that it would be unreasonable to conclude that every single agency statement with future effect is a rule under the APA. Instead, he argued that only agency statements that "seek to authoritatively answer an underlying policy or legal issue" should be considered rules. These opinions raise several unanswered questions, which could suggest some hesitation before reading the phrase "future effect" in the APA definition of a rule to mean "binding." First, these cases do not fully explain what it means for an agency statement to be binding or address the case law suggesting that the term "future effect" merely pertains to the prospective nature of the statement. Second, and perhaps more critical, this case law reading "future effect" to mean that APA "rules" must bind the agency does not explain how to distinguish this requirement from the separate inquiry into whether an agency action is subject to notice-and-comment rulemaking procedures. As discussed in more detail below, some (but not all) APA "rules" must go through procedures commonly known as notice-and-comment rulemaking. To distinguish so-called "legislative" rules that are subject to notice-and-comment procedures from "interpretive" rules, which are not, courts generally ask whether the rule has "the force of law" —or stated another way, whether the rule is "legally binding." Arguably, then, this "legal effect" test for notice-and-comment rulemaking may be equivalent to asking whether a rule binds an agency. However, the "future effect" inquiry tests whether an agency action is a "rule" under 5 U.S.C. §551(4), and the "legal effect" inquiry tests whether such a rule is subject to the notice-and-comment procedures outlined in 5 U.S.C. §553. Because the tests are tied to two distinct statutory provisions, they arguably should not both turn on whether a rule is legally binding. This is especially true where courts have generally held that interpretive rules may not be subject to notice-and-comment but are nonetheless "rules" within the meaning of the APA. The fact that Congress expressly exempted "interpretative rules" from the rulemaking procedures applicable to "rules" may itself suggest that such agency actions are rules—otherwise, the exemption would be unnecessary. The third requirement for an agency action to be considered an APA rule is that it must be "designed to implement, interpret, or prescribe law or policy." The D.C. Circuit has held that agency documents that merely state an "established interpretation" and "tread no new ground" do not "implement, interpret, or prescribe law or policy" and therefore are not rules. Similarly, an agency statement is not a rule if it "does not change any law or official policy presently in effect." Thus, courts have concluded that "educational" documents that merely "reprint[]" or "restate" existing law are not rules under the APA. The D.C. Circuit has also held that an agency's budget request is not a rule. The APA outlines specific rulemaking procedures that agencies must follow when they formulate, amend, or repeal a rule. The APA generally requires publication in the Federal Register and institutes procedural requirements that are often referred to as notice-and-comment rulemaking. Under notice-and-comment rulemaking, agencies must notify the public of a proposed rule and then provide a meaningful opportunity for public comment on that rule. However, not all agency acts that qualify as "rules" under the APA definition are required to comply with the APA's rulemaking procedures. In particular, the APA provides that notice and comment is not required for "interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice." Additionally, the APA's rulemaking procedures do not, in relevant part, apply to "matter[s] relating to agency management or personnel." Therefore, agency statements such as guidance documents or procedural rules may not be required to undergo notice-and-comment rulemaking, but may still be APA "rules." Courts frequently hold that agency's guidance documents are exempt from APA notice-and-comment rulemaking requirements because those documents are properly classified either as interpretative rules or as general policy statements. Interpretive rules merely explain or clarify preexisting legal obligations without themselves "purport[ing] to impose new obligations or prohibitions," while general policy statements simply describe how an agency "will exercise its broad enforcement discretion" without binding the agency. But as mentioned above, the critical factor distinguishing both interpretive rules and general policy statements from "legislative" rules that must be promulgated through notice-and-comment procedures is "whether the agency action binds private parties or the agency itself with the 'force of law,'" or whether the rule "has legal effect." General policy statements ordinarily are not legally binding, and accordingly are not "substantive" rules required to undergo notice-and-comment rulemaking procedures. It should be noted that some cases from the D.C. Circuit have suggested that general policy statements are not "rules" at all under the APA definition. For example, in one case, the D.C. Circuit said that the "primary distinction between a substantive rule—really any rule—and a general statement of policy, then, turns on whether an agency intends to bind itself to a particular legal position." As discussed above, courts have also sometimes held that where an agency statement does not "bind" an agency, it has no "future effect" and therefore cannot qualify as an APA "rule." This "binding effect" requirement has clear parallels to these cases holding that general policy statements are not rules because they do not bind the agency. However, these latter decisions do not explicitly ground this characterization of general policy statements in the text of the APA requiring rules to have "future effect." Accordingly, it is not clear how these two inquiries interrelate. Other cases have characterized general policy statements as APA rules, notwithstanding the fact that such a statement may not be legally binding in a future administrative proceeding. The CRA incorporates the APA definition of "rule" by reference, and, consequently, should likely be read to incorporate judicial constructions of that definition. Thus, for example, although the CRA does not itself reference agency "orders," some courts have nonetheless imported the APA's distinction between rules and orders when interpreting the CRA. Accordingly, if an agency acts through an order or investigatory act, rather than a rule, the requirements of the CRA likely will not apply. In recent years, some commentators have discussed using the CRA to revoke agencies' guidance documents, raising the question of which guidance documents qualify as CRA "rules." As a preliminary matter, it is important to note that "guidance document" is not a defined term under either the CRA or the APA. Even if an agency has characterized a statement as a guidance document rather than a rule, it still may qualify as a "rule" under the CRA. Instead, the relevant question is whether any agency statement labeled as guidance—which could include, for example, actions such as memoranda, letters, or agency bulletins—falls within the statutory definition of "rule" and, if so, whether it is nonetheless exempt from the CRA under any of the exceptions to that definition. As discussed above, agency statements labeled as guidance are frequently exempt from the APA's notice-and-comment rulemaking procedures because they fall within the exceptions for interpretive rules or general policy statements. However, while the CRA adopts the APA's definition of rule, the CRA's exceptions to that definition are not identical to the APA's exemptions from its notice-and-comment procedures. Notably, the CRA does not exclude from its definition of rule either general policy statements or interpretative rules. Instead, the category of agency "rules" subject to the requirements of the CRA appears to encompass most "rules" that must go through the APA's notice-and-comment rulemaking procedures, along with some that do not. Consequently, agency guidance documents that are exempt from the APA's notice-and-comment procedural requirements may nonetheless be subject to the CRA, if they do not fall within one of the CRA's exceptions. But the effect of a disapproval resolution in such a case may be limited because such guidance documents generally lack legal effect in the first place. The post-enactment legislative history of the CRA indicates that the CRA was intended to encompass some agency statements that would not be subject to the APA's notice-and-comment rulemaking requirements. Following the enactment of the CRA in 1996, the law's sponsors inserted into the Congressional Record a statement in which they asserted that the law would cover a wide swath of agency actions: The committees intend this chapter to be interpreted broadly with regard to the type and scope of rules that are subject to congressional review. The term "rule" in subsection 804(3) begins with the definition of a "rule" in subsection 551(4) and excludes three subsets of rules that are modeled on APA sections 551 and 553. This definition of a rule does not turn on whether a given agency must normally comply with the notice-and-comment provisions of the APA.... The definition of "rule" in subsection 551(4) covers a wide spectrum of activities. This statement suggests that Congress intended the CRA to reach a broad range of agency activities, including agency policy statements, interpretive rules, and certain rules of agency organization, despite the fact that those actions are not subject to the APA's requirements for notice and comment. However, as discussed above, there is some ambiguity regarding whether certain non-binding statements are rules at all. If general policy statements or other non-binding agency actions are not "rules" under the APA definition, then arguably, they are not rules under the CRA. But importantly, GAO has concluded that general policy statements should be considered "rules" under the CRA. As discussed in more detail below, GAO's resolution of this issue may stand as the last word on the matter, given the role that GAO has come to play in advising Congress on which agency actions are subject to the CRA. Even if an agency action is a "rule" within the APA definition, it will not be subject to the CRA if it falls within one of the three exceptions to the CRA's definition of a "rule." The CRA incorporates the APA definition of rule, but exempts from that definition any rules "of particular applicability," rules "relating to agency management or personnel," and "any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties." Some of these exemptions track language in the APA, and accordingly, cases interpreting those APA provisions may be useful to interpret the CRA exceptions. Additionally, the CRA does not "apply to rules that concern monetary policy proposed or implemented by the Board of Governors of the Federal Reserve System or the Federal Open Market Committee." The CRA also contains a partial exception for rules where an agency has, "for good cause," dispensed with notice-and-comment rulemaking procedures, as well as for rules related to "a regulatory program for a commercial, recreational, or subsistence activity related to hunting, fishing, or camping ." However, this section does not exempt rules from the CRA procedures entirely; it merely allows the agency to determine when the rule shall take effect, notwithstanding the CRA's requirements. While the APA's definition of "rule" includes agency statements "of general or particular applicability," the CRA expressly exempts "any rule of particular applicability." Courts have said that this language refers to "legislative-type promulgations" that are "directed to" specifically named parties. In opinions from GAO analyzing whether various agency actions fall within the particular-applicability exception, GAO has stated that to be generally applicable, the CRA does not require a rule to "generally apply to the population as a whole." Instead, "all that is required is a finding" that a rule "has general applicability within its intended range, regardless of the magnitude of that range." For example, in one case, GAO concluded that an agency decision adopting and implementing a plan to counter decreased river flows in a certain river basin was not a matter of particular applicability. Although the decision applied to a specific geographic area, it would, in the view of GAO, nonetheless "have significant economic and environmental impact throughout several major watersheds in the nation's largest state." The CRA gives examples of some types of rules of particular applicability by specifying that this exemption includes any "rule that approves or prescribes for the future rates, wages, prices, services, or allowances therefor, corporate or financial structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing." Moreover, the post-enactment statement for the record written by the CRA's sponsors maintained that "IRS private letter rulings and Customs Service letter rulings are classic examples of rules of particular applicability." Under the APA, courts have also held, for example, that agency actions designating specific sites as covered by environmental laws are rules of "particular applicability." The second CRA exemption excludes "any rule relating to agency management or personnel." The APA contains a similar exemption from its general rulemaking requirements. Within the context of the APA, courts have concluded that this exemption covers agency statements such as policies for hiring employees. A rule will not fall within this exemption solely because it is "directed at government personnel." Instead, courts have viewed this APA exception to cover internal matters that do not substantially affect parties outside an agency. Notwithstanding the general presumption of courts that where Congress adopts language from another statute, it also intends to incorporate any settled judicial interpretations of that same language, it is unclear whether this substantial-effect requirement developed by courts in the context of the APA should be read into the CRA. The CRA's second exemption, for "any rule relating to agency management or personnel," does not expressly mention a rule's effect on third parties. By contrast, the CRA's third exemption does. This distinction in language could be read to mean that Congress intentionally chose to create a substantial-effect requirement for the third exception while omitting this limitation from the second one, so that the CRA's second exception excludes "any rule relating to agency management or personnel" regardless of its impact on third parties. On this view, this difference in phrasing would displace the ordinary presumption that Congress incorporates case law interpreting similar statutory provisions. This interpretation of the second exemption could mean that the CRA's exception for rules relating to agency management or personnel may be interpreted more broadly than the APA exception. However, it is also possible that Congress chose not to include the substantial-effect requirement in this second exception because "prior judicial interpretation" of the identical phrases in the APA made such language unnecessary. Congress may have added a substantial-effect requirement to the third exception in order to settle some ambiguity in the cases interpreting the parallel provision of the APA, as described below. Finally, the CRA exempts "any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties." The APA also excludes "rules of agency organization, procedure, or practice" from notice-and-comment rulemaking procedures. Courts have held that this APA exception includes actions like agency decisions relating to how regulated entities must go about satisfying investigative requirements. Unlike the CRA, the APA does not explicitly limit this exception to those rules that do not "substantially affect the rights or obligations of non-agency parties." Nonetheless, because courts have read such a limitation into the APA exemption, the case law defining this requirement may be relevant to determine the scope of this CRA exemption. However, in the cases interpreting this parallel APA exclusion, the impact of a rule on a third party is not the only factor courts use to distinguish between substantive rules, which are required to go through notice-and-comment procedures, and procedural rules, which are not. Instead, courts have engaged in two kinds of inquiries. The first is the "substantial impact test," which asks whether the agency action substantially impacts the regulated industry. However, the D.C. Circuit has noted that even rules best characterized as procedural measures may have a significant effect on regulated parties, and, accordingly, has held that "a rule with a 'substantial impact' upon the persons subject to it is not necessarily a substantive rule." Consequently, the D.C. Circuit has also asked whether the rule "encodes a substantive value judgment." Nonetheless, because the text of the CRA expressly excludes rules "of agency organization, procedure, or practice" that do not "substantially affect the rights or obligations of non-agency parties," the CRA appears to mandate the use of something akin to the substantial impact test to determine whether a rule falls within this exception. In fact, one of the sponsors of the CRA emphasized prior to its passage that to determine whether a rule should be excluded under this provision, "the focus ... is not on the type of rule but on its effect on the rights or obligations of nonagency parties." He went on to say that the exclusion covered only rules "with a truly minor, incidental effect on nonagency parties." GAO has sometimes drawn on the APA case law described above in its own opinions analyzing whether various actions fall within the purview of the CRA. However, because the substantial-impact test and the substantive-value-judgment test were developed in the context of the APA to test whether rules "implicate the policy interests animating notice-and-comment rulemaking," these judicially created tests might not be directly applicable to determine whether an agency statement is subject to the CRA. The CRA requires that agencies submit actions that fall within the CRA's definition of a rule to both houses of Congress and to GAO before the actions may take effect. Thus, the submission requirement applies generally to rules that are promulgated through APA notice-and-comment procedures, as well as to other types of agency statements, as discussed above. Specifically, Section 801(a)(1)(A) of the CRA requires the agency to submit a report containing a copy of the rule to each house of Congress and the Comptroller General; a concise general statement relating to the rule, including whether it is a major rule; and the proposed effective date of the rule. The agency is also required to submit additional information pertaining to any cost-benefit analysis the agency conducted, along with information on the agency's actions resulting from other regulatory impact analysis requirements, including the Regulatory Flexibility Act and the Unfunded Mandates Reform Act. For major rules, after receiving this information, GAO is then required to assess the agency's compliance with these additional informational requirements and include its assessment in the major rule report. The report is required to be submitted to the House and Senate committees of jurisdiction within 15 calendar days of the submission of the rule or its publication in the Federal Register , whichever date is later. The "report" that agencies are required to submit along with the rule, in practice, is a two-page form on which they provide the information required under Section 801(a)(1)(A) and, for major rules, most of the information required to be included in GAO's major rule report. In FY1999 appropriations legislation, Congress required the Office of Management and Budget (OMB) to provide agencies with a standard form to use to meet this reporting requirement. OMB issued the form in March 1999 as part of a larger guidance to agencies on compliance with the CRA. A copy of the form is provided in Appendix A of this report. When final rules are submitted to Congress, notice of each chamber's receipt and referral appears in the respective House and Senate sections of the daily Congressional Record devoted to "Executive Communications." Notice of each chamber's receipt is also entered into a database that can be searched using Congress.gov. When the rule is submitted to GAO, a record of its receipt at GAO is noted in a database on GAO's website as well. Once the rule is received in Congress and published in the Federal Register , the time periods during which the CRA's expedited procedures are available begin, and Members can use the procedures to consider a resolution of disapproval. Thus, submission of rules to Congress under the CRA is critical because the receipt of the rule in Congress triggers the CRA's expedited procedures for introduction and consideration of a joint resolution disapproving the rule. In other words, if an agency fails to submit a rule to Congress, the House and Senate are unable to avail themselves of the special "fast track" procedures to consider a joint resolution striking down the rule. Following enactment of the CRA in 1996, some Members of Congress and others raised concerns over agencies not submitting their rules on several occasions. At a hearing on the CRA in 1997, one year after its enactment, witnesses noted that agencies were not in full compliance with the submission requirement. It was also noted at the hearing, however, that it appeared agencies were seeking "in good faith" to comply with the statute. At a hearing in 1998 on implementation of the CRA, GAO's general counsel testified that agencies were often not sending their rules to GAO or Congress. Also in 1998, to further improve agency compliance with the CRA, Congress required OMB to issue guidance on certain provisions of the CRA, specifically including the submission requirement in 5 U.S.C. §801(a)(1). To meet this requirement, then-OMB Director Jacob J. Lew issued a memorandum for agencies in March 1999. The Lew memorandum provided information such as where agencies should send their rules in the House and Senate, including the addresses of the Office of the President of the Senate and the Speaker of the House, the offices in each chamber that receive the rules; what information the agencies should include with the rule; and an explanation of what types of rules are required to be submitted. Because agencies were initially inconsistent about fulfilling the submission requirement, GAO began to monitor agencies' compliance with the submission requirement by comparing the final rules that were published in the Federal Register with rules that were submitted to GAO. This was not a role that was required under the CRA; rather, GAO conducted these reviews voluntarily. As then-GAO general counsel Robert Murphy testified in 1998, GAO conducted a review to determine whether all final rules covered by the Congressional Review Act and published in the Register were filed with the Congress and the GAO. We performed this review both to verify the accuracy of our own data base and to ascertain the degree of agency compliance with the statute. We were concerned that regulated entities may have been led to believe that rules published in the Federal Register were effective, when, in fact, they were not unless filed in accordance with the statute. After its review of agency compliance with the submission requirement, in November 1997, GAO submitted to OMB's Office of Information and Regulatory Affairs (OIRA) a list of the rules that had been published in the Federal Register but had not been submitted to GAO. According to GAO, OIRA distributed this list to affected agencies; GAO then followed up again with the agencies that had rules that remained un-submitted in February 1998. GAO stated in its March 1998 testimony that "In our view, OIRA should have played a more proactive role in assuring that the agencies were both aware of the statutory filing requirements and were complying with them." GAO continued to conduct similar reviews regularly, comparing the list of rules that agencies submitted to GAO against rules that were published in the Federal Register . Until 2012, GAO periodically sent letters to OIRA regarding rules that it had not received. In March 2012, GAO notified OIRA that, due to constraints on its resources, it would no longer be sending lists of rules not received. Instead, GAO decided to continue to track only major rules not received, not all final rules, as they had previously done. In general, although there have been exceptions noted by GAO, agencies appear to be fairly comprehensive in submitting rules to Congress and GAO when those rules have been promulgated through an APA rulemaking process. GAO's federal rules database lists thousands of such rules each year. In the case of rules that are not subject to notice-and-comment procedures, however, agencies often do not fulfill the submission requirement, and tracking compliance for these types of agency actions is more difficult. Although GAO has voluntarily tracked agency compliance with the submission requirement, its methodology for doing so did not result in a complete list of agency actions that should have been submitted. GAO's point of reference was to compare regulations that were published in the Federal Register against regulations it received pursuant to the CRA. Most rules that are required to be published in the Federal Register are indeed subject to the CRA, making this a potentially helpful method of identifying rules that were not submitted. However, many of the other agency actions that are not subject to notice-and-comment requirements are not generally published in the Federal Registe r and are also not submitted to GAO. Therefore, using this method, many rules that should have been submitted likely were undetected by GAO and thus not included in the lists of un-submitted rules it sent to OIRA and to the agencies. It is precisely this issue that led to Members requesting GAO's opinion on individual agency actions that were of specific interest to them and were not submitted to Congress (nor, in most cases, published in the Federal Register ). The higher incidence of noncompliance with the CRA's submission requirement for agency actions that were conducted outside the notice-and-comment rulemaking process is likely due in large part to the practical difficulty of submitting the substantial number of agency statements that qualify as rules under the CRA. The CRA's submission requirement could potentially include a wide variety of items such as FAQs posted on agency websites, press releases, bulletins, information memoranda, and statements made by agency officials. In congressional testimony in 1997, one administrative law scholar argued that agencies "annually take tens of thousands of actions" that would fall under the CRA's definition of rule, and that Were agencies to comply fully with [the CRA's] requirement that all these matters be filed with Congress as a condition of their effectiveness (as it appears, thus far, they are not doing), Congress and the GAO would be swamped with filings. Burying Congress in paper might even seem a useful means of diverting attention from larger, controversial matters; haystacks can be useful for concealing needles. No one believes many, if any, of these rules will be the subjects of resolutions of disapproval. Yet for them even simple accompanying documents to permit data analysis and tracking, such as GAO has been proposing, would impose significant aggregate costs, well beyond their possible benefit. In addition, it seems possible that many agencies are unaware of the breadth of the CRA's coverage. Reading through various agencies' responses to the GAO opinions discussed below suggests that many agencies appear to be aware that notice-and-comment rules are generally covered by the CRA, but they may be unaware that many other types of actions are covered. For example, in an opinion it issued in 2012 regarding an action taken by the Department of Health and Human Services, GAO stated that "We requested the views of the General Counsel of HHS on whether the July 12 Information Memorandum is a rule for purposes of the CRA by letter dated August 3, 2012. HHS responded on August 31, 2012, stating that the Information Memorandum was issued as a non-binding guidance document, and that HHS contends that guidance documents do not need to be submitted pursuant to the CRA." GAO concluded, however, "We cannot agree with HHS's conclusion that guidance documents are not rules for the purposes of the CRA and HHS cites no support for this position." Because submission of rules is key to Congress's ability to use the CRA, if an agency does not submit a rule to Congress, this could potentially frustrate Congress's ability to review rules under the act. To avoid Congress being denied its opportunity for review of rules in this way, however, the Senate appears to have developed a practice that allows it to employ the CRA's review mechanism even when an agency does not submit a rule for review. That practice has involved seeking an opinion from GAO on whether an agency action should have been submitted under the CRA (i.e., whether the action is covered by the CRA's definition of "rule"). In several instances since the enactment of the CRA in 1996, Members of Congress sought an opinion from GAO as to whether certain agency actions were covered by the CRA, despite the agency not having undertaken notice-and-comment rulemaking or having submitted the action to Congress. GAO has issued 21 opinions of this type as of March 5, 2019. In many of these opinions, GAO has defined the term "rule" as used in the CRA expansively. In 11 of the 21 opinions, GAO opined that the agency statement in question was a rule under the CRA that should have been submitted to the House and Senate for review. These opinions are summarized below in this report and are listed in a table in Appendix B . In recent years, the Senate has considered publication in the Congressional Record of a GAO opinion classifying an agency action as a rule as the trigger date for the initiation period to submit a disapproval resolution and for the action period during which such a joint resolution qualifies for expedited consideration in the Senate. Thus, the question of whether Congress may use the CRA's expedited parliamentary disapproval mechanism generally hinges upon the nature of GAO's opinion in such cases. By allowing the GAO opinion to serve as a substitute for the actual submission of a rule, the Senate can still avail itself of the CRA's expedited procedures to overturn rules. In responding to these requests from Members for opinions on whether certain agency actions are covered, GAO has played an important role in determining the applicability of the CRA, although the specific role that GAO has played in this regard is not explicitly outlined in the statute. But a review of the history of the early implementation of the CRA, and a consideration of GAO's other activities under the CRA, suggests that the role GAO currently plays with regard to determining whether a specific agency action is a "rule" is linked to other activities GAO has engaged in regarding the CRA. As has been noted, GAO's primary statutory requirement under the CRA is to provide a report to the committees of jurisdiction on each major rule, and to include in the report information about the agency's compliance with various steps of the rulemaking process for each major rule. For non-major rules, soon after the CRA was enacted, GAO voluntarily created an online database of rules submitted to it under the CRA, suggesting that it was willing to go beyond what was required of it by the statute to facilitate implementation. As GAO's general counsel explained in congressional testimony in 1998, "Although the law is silent as to GAO's role relating to the nonmajor rules, we believe that basic information about the rules should be collected in a manner that can be of use to Congress and the public. To do this, we have established a database that gathers basic information about the 15-20 rules we receive on the average each day." The database can be used to search for rules by elements such as the title, issuing agency, date of publication, type of rule (major or non-major), and effective date. The website also contains links to each of GAO's major rule reports. Perhaps most notably, however, GAO's determination of whether agency actions are considered "rules" under the CRA appears to be closely linked to its monitoring of agency compliance with the submission requirement as discussed above. The question of whether an agency action is a rule under the CRA is also a question of whether it should be submitted; arguably, then, GAO is addressing a very similar question in its opinions on whether certain agency actions are covered as it was in its initial reports to OIRA on agency compliance with the submission requirement. A discussion of GAO's role in a congressional hearing on the Tongass Land Management Plan in 1997 provides some evidence of the voluntary and, initially, ad hoc nature of GAO's role in this regard. One of the issues that was addressed at the hearing was whether the plan should be considered a rule under the CRA; GAO's general counsel was invited to testify at the hearing. Six days before the hearing, GAO issued its second opinion on the applicability of the CRA, in which it stated that the Tongass Land Management Plan should have been submitted as a rule under the CRA. Former Senator Larry Craig, who had requested the opinion, asked GAO's general counsel at the hearing about GAO's role: It is our understanding of your testimony and our own reading of the Regulatory Flexibility Act that the General Accounting Office has been given the role of advising Congress and perhaps agencies on whether their policy decisions constitute rules. It is our understanding that the GAO's independent opinion is generally given considerable weight by the agencies. Is this also the GAO's understanding of its role? In response, GAO's general counsel, Robert Murphy, stated that the CRA does not provide any identification of who is to decide what a rule is, unlike the issue of whether a rule is a major rule or not, which, as [OIRA Administrator] Ms. Katzen pointed out, has been assigned to her. So in that sense, I cannot say that GAO has a special role under the statute for making that determination. The decision, the opinion, that we issued last week on the question [of whether the Tongass Land Management Plan was a rule under the CRA] was done in our role as adviser to the Congress in response to the request of three chairmen of congressional committees. Thus, GAO acknowledged that its opinion was provided not pursuant to any specific provision of the statute, but in a more general, advisory capacity. In the years following, Members continued to request GAO opinions advising Congress on the matter of whether an agency action should have been submitted. Although GAO has issued 21 opinions on the applicability of the CRA since 1996, Congress's response to those opinions has varied over time. Initially, the GAO opinions finding that the agency actions in question were rules under the CRA did not lead to the introduction of joint resolutions of disapproval—Members appear not to have introduced any joint resolutions of disapproval following a GAO opinion until 2008. In 2008, GAO issued an opinion stating that a letter from the Centers for Medicare & Medicaid Services to state health officials concerning the State Children's Health Insurance Program was a rule for the purposes of the CRA; in response, Senator John D. Rockefeller introduced S.J.Res. 44 to disapprove the guidance provided in the letter. According to a press release from the Committee on Finance at the time, however, the committee did not take further action on the resolution of disapproval because it had missed the window during which the action would have been required to be taken under the CRA to use its expedited procedures. The first time either chamber took action on a resolution of disapproval introduced following a GAO opinion was in 2012, when the House passed H.J.Res. 118 (112 th Congress), a resolution of disapproval that would have overturned an information memorandum issued by the Department of Health and Human Services relating to the implementation of the Temporary Assistance for Needy Families (TANF) program. The first time the Senate took action on such a resolution of disapproval was on April 18, 2018, when it passed S.J.Res. 57 , overturning guidance from the Bureau of Consumer Financial Protection (CFPB) pertaining to indirect auto lending and the Equal Credit Opportunity Act. The House passed S.J.Res. 57 on May 8, 2018, and the President signed it into law on May 21, 2018. Standing alone, a GAO opinion deciding whether an agency action is a "rule" covered by the CRA does not have legal effect. As discussed, GAO's role in determining whether actions are subject to the CRA is not provided for in the CRA, and its opinions are, in essence, advisory. The opinions do not have any immediate effect other than advising Congress as to whether GAO considers an agency action to meet the definition of "rule" under the CRA. As a matter of course, however, it appears that the Senate has chosen to treat the GAO opinions as dispositive on the issue. In several cases, individual Senators have stated that once a GAO opinion determining that an agency action is a rule is published in the Congressional Record , the time periods under the CRA commence and the agency action in question becomes subject to the CRA disapproval mechanism. The enactment in May 2018 of a joint resolution of disapproval that was introduced following a GAO opinion regarding a 2013 CFPB bulletin that had not been submitted by the agency further indicates that Congress, in at least some cases, is willing to consider the GAO opinion as a substitute for the agency's submission of a rule to Congress. GAO described this practice in November 2018 in one of its opinions relating to the applicability of the CRA: "Congress has opted to treat the receipt of a GAO opinion concluding that an agency action is a rule as triggering the statutory provisions that otherwise would have been triggered by the agency's submission. Thus, Congress has used GAO opinions to cure the impediment created by the agency's failure to submit the rule, protecting its review and oversight authorities." In sum, GAO opinions facilitate congressional review of rules that were not—but should have been—submitted under the CRA. A CRA provision barring judicial review makes it unlikely that a GAO opinion or any other congressional determination stating that a rule is subject to the CRA would be subject to challenge in court. This provision states that "[n]o determination, finding, action, or omission under this chapter shall be subject to judicial review." Accordingly, most courts have refused to review any claims arguing that an agency action should have been submitted to Congress as a rule under the CRA. As a result, the question of whether an agency action is subject to the CRA and its fast-track procedures will likely be settled in the political arena rather than in the courts, and, if Congress continues to treat GAO opinions as determinative, those opinions likely will be the final word on the issue. The provision barring judicial review may mean that one other critical aspect of the CRA may be addressed outside of the courts and through GAO opinions: whether a rule has taken effect. As discussed previously, the CRA states that agencies must submit covered rules to Congress and the Comptroller General "before a rule can take effect," suggesting that a rule may not become operative until the report required by the CRA is submitted to Congress. Indeed, the post-enactment statement inserted into the Congressional Record by the CRA's sponsors stated that, barring two exceptions listed in the CRA, "any covered rule not submitted to Congress and the Comptroller General will … not [take] effect until it is submitted pursuant to subsection 801(a)(1)(A)." However, courts have refused to adjudicate claims arguing that various rules are not in effect because an agency has failed to submit the rules to Congress. Accordingly, it is unlikely that a court would be willing to enforce this provision and declare that a rule lacks effect because it was not submitted to Congress. If an agency has not submitted a disputed action to Congress, it is possible that this inaction was the result of the agency's view that the rule was not subject to the CRA. A GAO opinion stating that an agency action does constitute a rule, while not itself rendering a rule ineffective, may be the first indication to the agency that the rule did not "take effect" because the agency did not fulfill the CRA submission requirement. But in the context of agency rules that inherently lack legal effect, the determination that they lack "effect" under the CRA may not have much practical impact. In the context of rulemaking, to "take effect" usually means that something has become legally effective. As noted, however, the CRA encompasses some non-legislative rules that inherently lack legal effect. The fact that the CRA requires agencies to submit some agency statements that lack legal effect suggests that the term "effect," as used in the CRA's submission requirement, means something other than legal effect. While reviewing notice-and-comment rulemakings, some courts have held that the CRA suspends a rule's operation notwithstanding the fact that a rule may technically have become effective. With respect to rules such as general policy statements that generally lack legal force, however, even if an agency failed to comply with the CRA's submission requirement and erroneously regarded the rule as being operative, it is less likely that the operation of the statement had a discernible and independent effect on the agency's actions. This section briefly summarizes each of the 21 GAO opinions to date on whether certain agency actions were rules and, thus, eligible for disapproval under the CRA. When GAO appeared to consider one or more of the CRA exceptions to the definition of "rule" as fundamental to its analysis, the summaries identify which exception GAO focused on in its opinion. The opinions are listed in chronological order by the date on which GAO issued the opinion. For a more concise summary of each of these opinions, see the table in Appendix B . The Emergency Sale Timber Program was enacted as part of the Emergency Supplemental Appropriations and Rescissions Act of 1995. The program was intended to "increase the sales of salvage timber in order to remove diseased and damaged trees and improve the health and ecosystems of federally owned forests." On July 2, 1996, the Secretary of Agriculture sent a memorandum entitled "Revised Direction for Emergency Timber Salvage Sales Conducted Under Section 2001(b) of P.L. 104-19 " to the Chief of the Forest Service, containing "clarifications in policy" for the program. GAO concluded that the memorandum was a rule under the CRA because some of its contents "clearly are of general applicability and future effect in interpreting section 2001 of P.L. 104-19 " and because, contrary to the argument the Department of Agriculture made to GAO when GAO requested its views on the matter, the memorandum "does not fall within the agency procedure or practice exclusion [in 5 U.S.C. §804(3)(C)]." On May 23, 2007, the Department of Agriculture's Forest Service issued the Tongass National Forest Land and Resource Management Plan, which "sets forth the management direction for the Tongass Forest and the desired condition of the Forest to be attained through Forest-wide multiple-use goals and objectives." GAO concluded that the plan was a rule under the CRA and was not excepted under 5 U.S.C. §804(3) because "decisions made in the Plan substantially affect non-agency parties and are, therefore, not 'agency procedures.'" President William Clinton signed Executive Order 13061 on September 11, 1997, announcing policies related to the American Heritage River Initiative (AHRI). The AHRI was intended to support American communities' efforts to restore and protect their rivers; the President was to designate, by proclamation, 10 rivers that would take part in the program. GAO concluded that Executive Order 13061 was not a rule under the CRA because the President is not an "agency" for the purposes of the CRA (or, for that matter, under the APA). As such, actions taken by the President are not subject to the CRA. On February 5, 1998, the Environmental Protection Agency (EPA) issued its "Interim Guidance for Investigating Title VI Administrative Complaints Challenging Permits." According to EPA, the intent of the guidance was to update EPA's procedural and policy framework regarding complaints alleging discrimination in the environmental permitting context. GAO concluded that "considered as a whole, the Interim Guidance clearly affects the rights of non-agency parties" and thus was a rule under the CRA and not exempt under 5 U.S.C. §804(3). On May 3, 2000, the Farm Credit Administration (FCA) issued a booklet entitled "National Charters," and then the FCA published the booklet in the Federal Register on July 20, 2000. The booklet "provide[d] guidance on the national charter application process and the national charter territory. Specifically, the Booklet explain[ed] how a direct lender association can apply for a national charter; what the territory of a national charter will be; and what conditions the FCA will impose in connection with granting a national charter." GAO concluded that "we find that the Booklet, while labeled a statement of policy by the FCA, in actuality, meets the requirements of a legislative rule—which should have been issued using informal rulemaking procedures, including notice and comment." GAO then concluded that the booklet constituted a rule under the CRA and was not exempt under 5 U.S.C. §804(3) because the policies established in the booklet would have an effect on non-agency parties, and because statements made within the booklet clearly indicate that "the FCA recognizes the effect of the Booklet and national charters on other parties." The Trinity River Record of Decision (ROD) was issued in December 2000 and documented the Department of the Interior's selection of the actions that it deemed necessary to "restore and maintain the anadromous fish in the Trinity River." The ROD identified the department's selected courses of action for addressing the decreased river flows in the Trinity River Basin. GAO concluded that the ROD was a "rule" under the CRA because "its essential purpose is to set policy for the future," it was not a rule of agency procedure or practice under 5 U.S.C. §804(3), and "it will have broad effect on both rivers' ecosystems and potentially significant economic effect within the Sacramento and Trinity River basins." On July 18, 2002, the Department of Veterans Affairs (VA) issued a memorandum to network directors regarding the VA's marketing activities to enroll new veterans in the VA health care system. Specifically, the memorandum directed the network directors to no longer engage in trying to enroll new veterans through the use of certain types of activities, such as health fairs, veteran open houses, and enrollment displays at VSO meetings. GAO concluded that the memorandum was not a rule under the CRA because it "is clearly excluded from the coverage of the CRA by one of the enumerated exceptions found in 5 U.S.C. §804(3)"—specifically, GAO considered the memorandum to be a statement of agency procedure or practice that did not affect the rights or obligations of non-agency parties. Rather, the memorandum governed internal agency procedures and did not affect the ability of veterans to enroll in the VA health care system. On January 23, 2003, the VA issued a memorandum terminating the Vendee Loan Program, a program that allowed the VA to make loans for the sale of foreclosed VA-loan-guaranteed property. In the memorandum, which was addressed to all directors and loan guarantee officers, the VA Secretary announced that it would no longer finance the sale of acquired properties. GAO concluded that the memorandum was not a rule under the CRA because it was a rule relating to agency management (i.e., excepted under 5 U.S.C. §804(3)(B)) or a rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties (i.e., excepted under 5 U.S.C. §804(3)(C)). GAO noted that "this is the type of management decision left to the discretion of the Secretary of VA in order to maintain the effective functioning and long-term stability of the program," and that "since the vendee loans were a purely discretionary method for VA to use to dispose of foreclosed properties, the change in the agency's 'organization' or 'practice' does not affect any party's right or obligation." On August 17, 2007, the Centers for Medicare & Medicaid Services issued a letter to state health officials concerning the State Children's Health Insurance Program (SCHIP). The letter "purports to clarify the statutory and regulatory requirements concerning prevention of crowd out for states wishing to provide SCHIP coverage to children with effective family incomes in excess of 250 percent of the federal poverty level (FPL) and identifies a number of particular measures that these states should adopt." GAO concluded that the letter was a rule for the purposes of the CRA because it was a "statement of general applicability and future effect designed to implement, interpret, or prescribe law or policy with regard to the SCHIP program," and because GAO did "not believe that the August 17 letter comes within any of the exceptions to the definition of rule contained in the Review Act." On July 12, 2012, the Department of Health and Human Services' Administration for Children and Families issued an information memorandum concerning the Temporary Assistance for Needy Families (TANF) program. The memorandum notified states that HHS was willing to exercise waiver authority over some of the program's work requirements. GAO concluded that the information memorandum was a rule for the purposes of the CRA because it was a "statement of general applicability and future effect, designed to implement, interpret, or prescribe law or policy with regard to TANF," and it did not fall within any of the three exceptions to the definition of a rule. As GAO stated, the memorandum applied to states and therefore was of general applicability, rather than particular applicability; it applied to the states and not agency management or personnel; and it established "the criteria by which states may apply for waivers from certain requirements of the TANF program. These criteria affect the obligations of the states, which are non-agency parties." On January 8, 2014, the Environmental Protection Agency issued a proposed rule entitled "Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources: Electric Utility Generating Units." The proposed rule was intended to establish "standards for fossil fuel-fired electric steam generating units (utility boilers and Integrated Gasification Combined Cycle (IGCC) units) and for natural gas-fired stationary combustion turbines." GAO concluded that the proposed rule in question was not an action that was covered by the CRA, because the CRA was intended to apply only to final rules: "The issuance of a proposed rule is an interim step in the rulemaking process intended to satisfy APA's notice requirement, and, as such, is not a triggering event for CRA purposes." Furthermore, GAO stated "the precedent provided in our prior opinions underscores that proposed rules are not rules for CRA purposes, and GAO has no role with respect to them." On March 22, 2013, the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation, issued interagency guidance on leveraged lending. The guidance "outline[d] for agency-supervised institutions high-level principles related to safe-and-sound leveraged lending activities, including underwriting considerations, assessing and documenting enterprise value, risk management expectations for credits awaiting distribution, stress-testing expectations, pipeline portfolio management, and risk management expectations for exposures held by the institution." GAO concluded that the leveraged-lending guidance was a rule under the CRA because it was a general statement of policy that had future effect and because GAO could "readily conclude that the guidance does not fall within any of the three exceptions in the CRA." GAO's opinion, which was issued on October 19, 2017, was silent on the matter of the timing of its opinion relative to the guidance, which was issued in 2013. On December 9, 2016, the U.S. Department of Agriculture's Forest Service approved an amendment to the Tongass Land and Resource Management Plan. The plan identified the uses that may occur in each area of the forest. The Forest Service is required under the National Forest Management Act of 1976 to update forest plans at least every 15 years and potentially more frequently. GAO concluded that the amendment to the plan was a rule under the CRA because the amendment "has a substantial impact on the regulated community such that it is a substantive rather than a procedural rule for purposes of CRA." As such, the plan could not be considered to fall within the exception in 5 U.S.C. §804(3)(C), despite the argument presented by USDA when GAO asked the agency its views on the matter. On December 30, 2016, the Department of the Interior's Bureau of Land Management issued its resource management plan for four areas in Alaska: the Draanjik Planning Area, the Fortymile Planning Area, the Steese Planning Area, and the White Mountains Planning Area. Land management plans such as these are intended to provide specific information for the use of public lands and are required under the Federal Land Policy and Management Act of 1976. GAO concluded that the plan was a rule under the CRA because it was of general applicability, had future effect, and was designed to implement, interpret, or prescribe law or policy, and because it did not fit into any of the three exceptions. Of particular relevance appeared to be the exception in 5 U.S.C. §804(3)(C): "Because the Eastern Interior Plan designates uses by nonagency parties that may take place in the four areas it governs, it is not a rule of agency organization, procedure or practice." On March 21, 2013, the Consumer Financial Protection Bureau issued a bulletin on "Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act." The bulletin "provide[d] guidance about indirect auto lenders' compliance with the fair lending requirements of the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B." GAO concluded that the bulletin was a rule under the CRA because it "is a statement of general applicability, since it applies to all indirect auto lenders; it has future effect; and it is designed to prescribe the Bureau's policy in enforcing fair lending laws," and because the bulletin "does not fall within any of the [CRA's] exceptions." GAO's opinion, which was issued on October 19, 2017, was silent on the matter of the timing of its opinion relative to the bulletin, which was issued in 2013. On January 23, 2017, President Donald J. Trump released a presidential memorandum establishing his Administration's policy on global health assistance funding, often referred to as the "Mexico City Policy." The policy prohibited assistance to foreign nongovernmental organizations and other entities that perform or promote abortion as a method of family planning. To implement this policy, the Department of State issued a fact sheet entitled "Protecting Life in Global Health Assistance" on May 15, 2017, and the U.S. Agency for International Development (USAID) issued revisions to its "Standard Provisions for U.S. Nongovernmental Organizations" on March 2, 2017. GAO concluded that the two agency actions in question were not rules for the purposes of the CRA because, although the fact sheets were issued by federal agencies, they were merely implementing a decision of the President, under a statute that specifically granted broad policymaking authority to the President. GAO based this decision on a 1989 D.C. Circuit case, DKT Memorial Fund v. Agency for International Development , which held that agency actions implementing the decision of President Ronald Reagan to establish the Mexico City Policy were not reviewable under the APA. The court held that the disputed decision involved "not a rulemaking by an agency, but rather a policy-making at the highest level by the executive branch," concluding that it did not have authority under the APA "to review the wisdom of policy decisions of the President" where the relevant statute granted the President broad discretion in the area of foreign affairs. GAO determined that in accordance with this precedent, the agency actions implementing President Trump's policy decision were not subject to the CRA. In guidance for the 2018 tax filing season, IRS announced on its website that it "would not accept electronically filed individual income tax returns where the taxpayer does not meet ACA reporting requirements, specifically to report full-year health coverage, claim a coverage exemption, or report a shared responsibility payment (known as 'silent returns')." GAO concluded that the agency statement was not a rule under the CRA because it "is a rule of agency procedure or practice that does not substantially affect taxpayers' rights or obligations," thus falling into the exception in 5 U.S.C. §804(3)(C). In effect, according to GAO, the "statement changes the timing of IRS compliance measures, but it does not change IRS's basis for assessing taxpayers' compliance with existing law—namely, the requirement to file a complete tax return and to meet ACA reporting requirements." The Social Security Administration's (SSA) Hearings, Appeals, and Litigation Law Manual (HALLEX) describes how SSA will process and adjudicate claims for disability benefits under the Social Security Act. Two sections of the manual stated a policy under which an SSA adjudicator could not rely on information from the Internet, including from social media networks, in deciding a claim for benefits (with two exceptions). GAO concluded that these two sections of HALLEX were not rules under the CRA because they were merely "procedures that govern the use of evidence from the Internet during those proceedings" and they "do not impose new burdens on claimants or alter claimants' rights or obligations during the SSA appeal process." Thus, GAO concluded that "the HALLEX sections are procedural rules that meet the [5 U.S.C. §804(3)(C)] exception." On July 26, 2018, the IRS issued Revenue Procedure 2018-38, which "modifies the information certain tax-exempt entities are required to report to IRS on their annual returns." On July 30, 2018, the IRS submitted Revenue Procedure 2018-38 to Congress under the CRA. On September 7, 2018, then-Senator Orrin Hatch submitted a request to GAO seeking its opinion on whether the revenue procedure was covered by the CRA's definition of "rule." The IRS had apparently made the determination, despite having submitted the document under the CRA, that the document was not covered by the CRA. Rather, the IRS argued that it had submitted the rule "out of an abundance of caution" and to "allow Congress to decide whether it is a rule by consulting GAO." The circumstances surrounding this GAO opinion were somewhat unique, because the IRS had already submitted the revenue procedure to Congress under the CRA by the time the question was raised as to whether the revenue procedure was covered by the definition of "rule." This appeared to be the first time that GAO had considered the application of the CRA when an agency submitted a rule and later made the argument that the rule was not covered. In its opinion, GAO primarily addressed the issue of whether the submission of the rule was sufficient to trigger the CRA's timelines rather than whether the revenue procedure met the statutory definition of "rule." GAO stated in its opinion that the purpose of the GAO opinions is "to cure the impediment created by the agency's failure to submit the rule, protecting [Congress's] review and oversight authorities," and, therefore, because the IRS had already submitted the rule, a GAO opinion on the CRA's applicability would be unnecessary. Furthermore, GAO confirmed that the IRS revenue procedure was available for congressional review under the CRA because the IRS had already submitted it: "IRS's submission triggered Congress's review and oversight powers under CRA, starting with the transmittal of the rule to the committees of jurisdiction." GAO also stated, "As Congress is not deprived of exercising its powers under CRA, there is no impediment to those powers that a GAO opinion might cure. We, therefore, take no position on whether the revenue procedure is a rule otherwise." On April 6, 2018, the Attorney General issued a memorandum directing federal prosecutors to adopt a zero-tolerance policy for illegal border crossings at the southwestern border of the United States. GAO concluded that the April 2018 memorandum was not a rule under the CRA because it was a rule of agency organization, procedure, or practice, and it did not change individuals' rights or obligations: "The rights and obligations in question are prescribed by existing immigration laws and remain unchanged by the agency's internal enforcement procedures at issue here." Thus, GAO concluded that the memorandum was covered by the exception in 5 U.S.C. §804(3)(C). In March 2018, the Secretary of Commerce issued a memorandum to the Under Secretary of Commerce for Economic Affairs justifying the Secretary's decision to add a citizenship question to the 2020 census. According to GAO, the memorandum "described a December 12, 2017 request from the Department of Justice (DOJ) that the Census Bureau include a citizenship question on the 2020 census" and directed the Under Secretary to include such a question. Soon after the Secretary issued the memorandum, pursuant to statutory requirements, the Census Bureau delivered a report to Congress containing its planned questions for the 2020 census, including the citizenship question. GAO concluded that the memorandum was not a rule under the CRA, stating that "it was direction from a supervisor to a subordinate in conjunction with the statutory process whereby the Secretary informs Congress of the questions that will be on the census.… As such, the memorandum does not meet CRA's definition of a rule because it was not designed to implement, interpret, or prescribe law or policy." Because the memorandum did not meet the definition of "rule" under section 551 of the APA, GAO did not discuss whether the memorandum would have been covered by any of the exceptions. Appendix A. Submission Form for Rules Under the CRA Appendix B. Summary of GAO Opinions
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The Congressional Review Act (CRA) allows Congress to review certain types of federal agency actions that fall under the statutory category of "rules." The CRA requires that agencies report their rules to Congress and provides special procedures under which Congress can consider legislation to overturn those rules. A joint resolution of disapproval will become effective once both houses of Congress pass a joint resolution and it is signed by the President, or if Congress overrides the President's veto. The CRA generally adopts a broad definition of the word "rule" from the Administrative Procedure Act (APA), defining a rule as "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency." The CRA, however, provides three exceptions to this broad definition: any rule of particular applicability, including a rule that approves or prescribes for the future rates, wages, prices, services, or allowances therefor, corporate or financial structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing; any rule relating to agency management or personnel; or any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties. The class of rules the CRA covers is broader than the category of rules that are subject to the APA's notice-and-comment requirements. As such, some agency actions, such as guidance documents, that are not subject to notice-and-comment rulemaking procedures may still be considered rules under the CRA and thus could be overturned using the CRA's procedures. The effect of Congress disapproving a rule that is not subject to notice-and-comment rulemaking may be subject to debate, given that such rules are generally viewed to lack any legal effect in the first place. Nonetheless, the CRA does encompass some such rules, as highlighted by the recent enactment of a CRA resolution overturning a bulletin from the Consumer Financial Protection Bureau that was not subject to the notice-and-comment procedures. Even if an agency action falls under the CRA's definition of "rule," however, the expedited procedures for considering legislation to overturn the rule only become available when the agency submits the rule to Congress. In many cases in which agencies take actions that fall under the scope of a "rule" but have not gone through notice-and-comment rulemaking procedures, agencies fail to submit those rules. Thus, questions have arisen as to how Members can avail themselves of the CRA's special fast-track procedures if the agency has not submitted the action to Congress. To protect its prerogative to review agency rules under the CRA, Congress and the Government Accountability Office (GAO) have developed an ad hoc process in which Members can request that GAO provide a formal legal opinion on whether a particular agency action qualifies as a rule under the CRA. If GAO concludes that the action in question falls within the CRA's definition of "rule," Congress has treated the publication of the GAO opinion in the Congressional Record as constructive submission of the rule. In other words, an affirmative opinion from GAO can allow Congress to use the CRA procedures to consider legislation overturning an agency action despite the agency not submitting that action to Congress.
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The Violence Against Women Act (VAWA) was originally enacted in 1994 ( P.L. 103-322 ). It addressed congressional concerns about violent crime, and violence against women in particular, in several ways. Among other things, it allowed for enhanced sentencing of repeat federal sex offenders; mandated restitution to victims of specified federal sex offenses; and authorized grants to state, local, and tribal law enforcement entities to investigate and prosecute violent crimes against women. This report provides a brief history of VAWA and an overview of the crimes addressed through the act. It includes brief descriptions of earlier VAWA reauthorizations and a more-detailed description of the most recent reauthorization in 2013. It also briefly addresses reauthorization activity in the 116 th Congress. The report concludes with a discussion of VAWA programs and a five-year history of funding from FY2015 through FY2019. The enactment of VAWA was ultimately spurred by decades of growing unease over a rising violent crime rate and a focus on women as crime victims. In the 1960s, the violent crime rate rose fairly steadily—it more than doubled from 1960 (160.9 per 100,000) to 1969 (328.7 per 100,000) —igniting concern from both the public and the federal government. Adding to this was the concern about violent crimes committed against women. In the 1970s, grassroots organizations began to stress the need for attitudinal change among both the public and the law enforcement community regarding violence against women. In the 1970s and 1980s, researchers increased their attention on the issue of violence against women as well. In one study, researchers collected data on family violence and attributed declines in spousal assault to heightened awareness of the issue in men as well as the criminal justice system. The public and the criminal justice system were beginning to view family violence as a crime rather than a private family matter. In 1984, Congress and President Reagan enacted the Family Violence Prevention and Services Act (FVPSA, P.L. 98-457 ) to assist states in preventing incidents of family violence and to provide shelter and related assistance to victims and their dependents. While FVPSA authorized programs similar to those discussed in this report and FVPSA reauthorizations subsequently reauthorized programs that were originally created by VAWA, such as the National Domestic Violence Hotline, it is a separate piece of legislation and beyond the scope of this report. In 1994, Congress passed and President Clinton signed into law, the Violent Crime Control and Law Enforcement Act of 1994 ( P.L. 103-322 ), which included VAWA as Title IV. The act created an unprecedented number of programs geared toward helping local law enforcement fight violent crime and providing services to victims of violent crime, among other things. In their opening remarks on VAWA in 1994, Senators Barbara Boxer and Joseph Biden highlighted the insufficient response to violence against women by police and prosecutors. The shortfalls of legal responses and the need for a change in attitudes toward violence against women were primary reasons cited for the passage of VAWA. VAWA has been reauthorized three times since its original enactment. Most recently, Congress passed and President Obama signed the Violence Against Women Reauthorization Act of 2013 ( P.L. 113-4 ), which reauthorized most of the programs under VAWA, among other things. In addition, this VAWA reauthorization amended and authorized appropriations for the Trafficking Victims Protection Act of 2000, enhanced measures to combat trafficking in persons, and amended VAWA grant purpose areas to include sex trafficking. Moreover, P.L. 113-4 gave American Indian tribes authority to enforce tribal laws pertaining to domestic violence and related crimes against non-tribal members, and established a nondiscrimination provision for VAWA grant programs. The reauthorization also included new provisions to address states' rape kit backlogs. The Violence Against Women Act of 1994, among other things, (1) enhanced investigations and prosecutions of sex offenses; (2) provided for a number of grant programs to address the issue of violence against women from a variety of angles, including law enforcement, public and private entities and service providers, and victims of crime; and (3) established immigration provisions for abused aliens. The sections below highlight examples of these VAWA provisions. As originally enacted, VAWA impacted federal investigations and prosecutions of cases involving violence against women in a number of ways. For instance, it established new offenses and penalties for the violation of a protection order or stalking in which an abuser crossed a state line to injure or harass another, or forced a victim to cross a state line under duress and then physically harmed the victim in the course of a violent crime. It added new provisions to require states, tribes, and territories to enforce protection orders issued by other states, tribes, and territories. VAWA allowed for enhanced sentencing of repeat federal sex offenders, and it also authorized funding for the Attorney General to develop training programs to assist probation and parole officers in working with released sex offenders. In addition, VAWA established a new requirement for pretrial detention of defendants in federal sex offense or child pornography felony cases. It also modified the Federal Rules of Evidence to include new procedures specifying that, with few exceptions, a victim's past sexual behavior was not admissible in federal criminal and civil cases of sexual misconduct. Moreover, VAWA directed the Attorney General to study states' actions to ensure confidentiality between sexual assault or domestic violence victims and their counselors. VAWA mandated restitution to victims of specified federal sex offenses, particularly sexual abuse, sexual exploitation, and other abuse of children. It also established new provisions such as a civil remedy that allows victims of sexual assault to seek civil penalties from their alleged assailants, and a provision that allows rape victims to demand that their alleged assailants be tested for HIV. The original VAWA created a number of grant programs for a range of activities, including programs aimed at (1) preventing domestic violence and sexual assault; (2) encouraging collaboration among law enforcement, judicial personnel, and public/private sector providers with respect to services for victims of domestic violence and related crimes; (3) investigating and prosecuting domestic violence and related crimes; (4) encouraging states, tribes, and local governments to treat domestic violence as a serious crime and implement arrest policies; (5) bolstering investigations and prosecutions of domestic violence and child abuse in rural states; and (6) preventing crime in public transportation as well as public and national parks. VAWA created new and reauthorized grants under FVPSA. These included grants for youth education on domestic violence and intimate partner violence as well as grants for community intervention and prevention programs. It authorized the grant for the National Domestic Violence Hotline and authorized funding for its operation. VAWA also reauthorized funding for battered women's shelters. VAWA authorized research and education grants for judges and court personnel in federal court circuits to gain a better understanding of the nature and the extent of gender bias in the federal courts. It additionally authorized grants for developing model programs for training of state and tribal judges and personnel on laws on rape, sexual assault, domestic violence, and other crimes of violence motivated by the victim's gender. It also authorized a new grant to be used for assisting state and local governments with entering data on stalking and domestic violence into local, state, and national databases—such as the National Crime Information Center (NCIC) database. VAWA authorized the expansion of grants under the Public Health Service Act to include rape prevention education. Additionally, it expanded the purposes of the Runaway and Homeless Youth Act to allow for grant funding to assist youth at risk of or who have been subjected to sexual abuse. VAWA reauthorized the Court-Appointed Special Advocate Program and the Child Abuse Training Programs for Judicial Personnel and Practitioners. It also authorized funding for Grants for Televised Testimony by Victims of Child Abuse. VAWA of 1994 addressed immigration-related problems faced by battered aliens. It included three provisions related to abused aliens: self-petitioning by abused foreign national spouses and their children, required evidence for demonstrating abuse, and suspension of deportation and cancellation of removal. These petitions allowed battered foreign national spouses and their children to essentially substitute a self-petition for lawful status in place of a petition for lawful status that was based on sponsorship by the abusive spouse, clarified the evidence required for joint petition waivers, and established requirements for battered foreign national spouses and children to stay deportation. Beyond the criminal justice improvements, grant programs, and immigration provisions, VAWA included provisions for several other activities, including requiring that the U.S. Postal Service take measures to ensure confidentiality of domestic violence shelters' and abused persons' addresses; mandating federal research by the Attorney General, National Academy of Sciences, and Secretary of Health and Human Services to increase the government's understanding of violence against women; and requesting special studies on campus sexual assault and battered women's syndrome. In 1995, the Office on Violence Against Women (OVW) was administratively created within the Department of Justice (DOJ) to administer grants authorized under VAWA. In 2002, OVW was codified through Title IV of the 21 st Century Department of Justice Appropriations Authorization Act ( P.L. 107-273 ). Since its creation through FY2018, OVW has awarded more than $8 billion in grants and cooperative agreements to state, tribal, and local governments, nonprofit organizations, and universities. While OVW administers the majority of VAWA-authorized grants, other federal agencies, including the Centers for Disease Control and Prevention (CDC) and the Office of Justice Programs (OJP), also manage VAWA programs. VAWA programs generally address domestic violence, sexual assault, dating violence, and stalking, although some VAWA programs address additional crimes. VAWA grant programs largely address the criminal justice system and community response to these crimes, but certain programs address prevention as well. These crimes involve a wide range of victim demographics, but the risk of victimization is highest for women. Public concern over violence against women prompted the original passage and enactment of VAWA. As such, VAWA legislation and programs have historically emphasized women victims. More recently, however, there has been a focus on ensuring that the needs of all victims are met through provisions of VAWA programs. Of note, while the title of the act and some headings and general purpose areas refer to women only, most VAWA grant purpose areas are not specific to women. National victimization data on domestic violence, sexual assault, dating violence, and stalking are available from two surveys, the National Crime Victimization Survey (NCVS) and the Youth Risk Behavior Surveillance System. Offense data are available from the Federal Bureau of Investigation's (FBI's) Uniform Crime Reporting (UCR) Program. UCR data differ from victimization data because the UCR data describe crimes that were reported to law enforcement, while victimization data include crimes that might not have been reported to law enforcement. Due to differences in what they are trying to measure, victimization data are not directly comparable to UCR data. Domestic violence can take many forms, but is often labeled as family violence or intimate partner violence. Under VAWA, domestic violence is generally interpreted as intimate partner violence; it includes felony or misdemeanor crimes committed by spouses or ex-spouses, boyfriends or girlfriends, and ex-boyfriends or ex-girlfriends. Crimes may include sexual assault, simple or aggravated assault, and homicide. As defined in statute for the purposes of VAWA grant programs, domestic violence includes felony or misdemeanor crimes of violence committed by a current or former spouse or intimate partner of the victim, by a person with whom the victim shares a child in common, by a person who is cohabitating with or has cohabitated with the victim as a spouse or intimate partner, by a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction receiving grant monies, or by any other person against an adult or youth victim who is protected from that person's acts under the domestic or family violence laws of the jurisdiction. From 1993 to 2017, the rate of serious intimate partner violence victimization declined by 70% for females, from 5.7 victimizations per 1,000 females aged 12 and older in 1993 to 1.7 per 1,000 in 2017; and 87% for males, from 1.5 victimizations per 1,000 males aged 12 and older in 1993 to 0.2 per 1,000 in 2017. In 2015, a survey conducted by the CDC included questions about lifetime victimization. The CDC estimates that 21.4% of women and 14.9% of men have experienced severe physical violence by an intimate partner in their lifetime. Since peaking in the early 1990s, the violent crime rate (including homicide and intimate partner homicide) has declined. Although it has fluctuated over the last several years, the violent crime rate remains far lower now than it was in the 1990s. In examining the initial decline in the 1990s and early 2000s, researchers studied a range of social factors that may influence homicide rates and suggested possible reasons for the decline in the intimate partner homicide rate. For instance, most intimate partner homicides involve married couples; as such, some researchers suggested the decline in marriage rates among young adults is a contributing factor in the decline in intimate partner homicide rates. Additionally, divorce and separation rates increased. Fewer marriages may result in less exposure to abusive partners, and may suggest that those who do marry are more selective in choosing a partner. Overall, homicide is committed largely by males, mostly victimizing other males. In 2017, males made up 84% of all offenders and 78% of all homicide victims; however, 78% of all intimate partner homicide victims were female. From 2003-2014, the CDC found that approximately 55% of female homicides for which circumstances were known were related to intimate partner violence. Sexual assault may include the crimes of forcible rape, attempted forcible rape, assault with intent to rape, statutory rape, and other sexual offenses. For VAWA programs, sexual assault is defined as "any nonconsensual sexual act proscribed by Federal, tribal, or State law, including when the victim lacks capacity to consent." Sexual assault is termed as "sexual abuse" and "aggravated sexual abuse" under federal criminal law. Of note, intimate partner violence can, and often does, include sexual assault. Until 2012, and for the purposes of its UCR program, the FBI defined forcible rape as "the carnal knowledge of a female forcibly and against her will." In January 2012, the FBI revised its definition of rape , and 2013-2017 rape data rely on the following definition: "penetration, no matter how slight, of the vagina or anus with any body part or object, or oral penetration by a sex organ of another person, without the consent of the victim." The new, more inclusive definition includes either male or female victims or offenders, includes instances in which the victim is incapable of giving consent because of temporary or permanent mental or physical incapacity, and reflects the various forms of sexual penetration understood to be rape. Both the legacy definition and the current definition exclude statutory rape—nonforcible sexual intercourse with or between individuals, at least one of whom is younger than the age of consent. According to UCR data, and applying the revised definition of rape, 135,755 forcible rapes were reported to law enforcement in 2017—a rate of 41.7 per 100,000 people. From 2013-2017, the number of rapes (revised definition) increased by 19.4%, and the rate increased each year, from 35.9 per 100,000 in 2013 to 41.7 per 100,000 in 2017. Using the legacy definition, 99,856 forcible rapes were reported to law enforcement in 2017. Since 1990, when 102,555 forcible rapes (previous definition) were reported, the number has fluctuated but has generally declined, though it also has increased each year since 2013 (see Figure 1 ). According to statistics from the National Crime Victimization Survey (NCVS), it is estimated that there were 393,980 sexual assaults (1.4 per 1,000 aged 12 and older) in 2017—which is nearly triple the number of forcible rapes reported in the 2017 UCR. As noted, NCVS estimates are not directly comparable to UCR program data because victimizations are self-reported during interviews and may not have been reported to law enforcement. The UCR and NCVS also measure rape and sexual assault differently—among other variations, the NCVS combines rape and sexual assault into one category. As shown in Figure 2 , and similar to UCR data, NCVS data reflect a decline in sexual assaults since 1993; however, the victimization survey went through a redesign in 2006 and 2016, so data over time should be interpreted with caution. Figure 2 demonstrates that a fairly low percentage of rape/sexual assaults are reported to police each year. In 2017, it is estimated that 40% of rape or sexual assault incidents were reported to the police—nearly double the percentage that were reported in 2016. Under VAWA, dating violence refers to "violence committed by a person who is or has been in a social relationship of a romantic or intimate nature with the victim." The relationship between the offender and victim is determined based on the following factors: (1) the length of the relationship, (2) the type of relationship, and (3) the frequency of interaction between the persons involved in the relationship. While teenagers are not the only demographic subject to dating violence, data reports on dating violence usually refer to teenagers as the relevant age demographic. According to the CDC's 2017 Youth Risk Behavior Survey , approximately 8.0% of high school students who dated or went out with someone during the 12 months before the survey reported being "hit, slammed into something, or injured with an object or weapon on purpose by someone they were dating or going out with" one or more times in the past year. The prevalence of physical dating violence victimization was higher among female students (9.1%) than male students (6.5%). The overall percentage of high school students experiencing physical dating violence has declined since the CDC first included the question in its 2013 survey. In 2013, approximately 10.3% of high school students reported being a victim of physical dating violence; in 2015, it was 9.6%; and in 2017, it was 8.0%. All 50 states, the District of Columbia, and U.S. territories have stalking laws, though they vary in definition. Federal law makes it unlawful to travel across state lines or use the mail or computer and electronic communication services with the intent to kill, injure, harass, or intimidate another person, and as a result, place that person in reasonable fear of death or serious bodily injury or cause substantial emotional distress to that person, a spouse or intimate partner of that person, or a member of that person's family. The NCVS Supplemental Victimization Survey (SVS) defines stalking as "a course of conduct directed at a specific person that would cause a reasonable person to feel fear." The SVS measures these unwanted stalking behaviors: making unwanted phone calls; sending unsolicited or unwanted letters or emails; following or spying on; showing up at places without a legitimate reason; waiting at places for the victim; leaving unwanted items, presents, or flowers; or posting information or spreading rumors about the victim on the internet, in a public place, or by word of mouth. According to the NCVS SVS, an estimated 3.3 million individuals aged 18 and older were victims of stalking in 2006. More females than males were stalked. Also, the percentage of individuals targeted decreased with age; those aged 18-24 experienced the highest incidence of stalking. The CDC measures stalking differently than the NCVS. For the purposes of CDC reports, a person is considered a stalking victim "if they experienced multiple stalking tactics or a single stalking tactic multiple times by the same perpetrator and felt very fearful, or believed that they or someone close to them would be harmed or killed as a result of the perpetrator's behavior." The CDC measured the following stalking tactics: unwanted phone calls, voice or text messages, hang-ups; unwanted emails, instant messages, messages through social media; unwanted cards, letters, flowers, or presents; watching or following from a distance, spying with a listening device, camera, or global positioning system (GPS); approaching or showing up in places, such as the victim's home, workplace, or school, when it was unwanted; leaving strange or potentially threatening items for the victim to find; sneaking into victim's home or car and doing things to scare the victim or let the victim know the perpetrator had been there. The CDC asked about two additional tactics after respondents were identified as possible stalking victims: damaged personal property or belongings, such as in their home or car; and made threats of physical harm. According to 2015 data from the CDC, 16.0% of women (19.1 million) and 5.8% of men (6.4 million) have been stalked by an intimate partner in their lifetimes. In the 12 months preceding the survey, approximately 4.5 million women and 2.1 million men were victims of stalking. See Figure 3 . The fundamental goals of VAWA are to prevent violent crime; respond to the needs of crime victims; learn more about crime; and change public attitudes through a collaborative effort by the criminal justice system, social service agencies, research organizations, schools, public health organizations, and private organizations. The federal government tries to achieve these goals primarily through federal grant programs that provide funding to state, tribal, territorial, and local governments; nonprofit organizations; and universities. As previously mentioned, OVW administers the majority of VAWA-authorized programs, while other federal agencies, including OJP and the CDC, also manage VAWA programs. Since its creation in 1995 through FY2018, OVW has awarded more than $8 billion in grants and cooperative agreements to state, tribal, and local governments; nonprofit organizations; and universities. In FY2018 and FY2019, $553 million and $559 million, respectively, were appropriated for VAWA programs administered by OVW, OJP, and the CDC, as shown in Table 1 . For program descriptions, authorization levels, and a five-year history of appropriations, see the Appendix . While authorizations of appropriations for VAWA programs have expired, the Administration has requested FY2020 funding for VAWA-authorized programs. The Administration's budget request proposes to fund OVW at $492.5 million for FY2020 (a 1% decrease from FY2019), all of which would be derived from a transfer from the Crime Victims Fund. The Administration requests $9.0 million for OJP (a 25% decrease from FY2019) for the Court Appointed Special Advocates (CASA). Also for FY2020, the Administration requests level funding ($49.4 million) for the Rape Prevention and Education Program at the CDC. Since it was enacted in 1994, VAWA has been reauthorized three times. Of note, the reauthorizations in 2000 and 2005 had broad bipartisan support, while the most recent reauthorization in 2013 had bipartisan support but faced greater opposition. This section will provide comparatively more detail for the 2013 reauthorization because it was the most recent and some issues may remain relevant to current reauthorization discussions. In 2000, Congress reauthorized VAWA through the Victims of Trafficking and Violence Protection Act ( P.L. 106-386 ; VAWA 2000). Modifications included additional protections for battered nonimmigrants, a new program for victims of domestic violence, dating violence, sexual assault, and stalking in need of transitional housing, a requirement for grant recipients to submit reports on the effectiveness of programs, new programs designed to protect elderly and disabled women, mandatory funds to be used exclusively for rape prevention and education programs, and inclusion of victims of dating violence. VAWA 2000 amended interstate stalking and domestic violence law to include (1) a person who travels in interstate or foreign commerce with the intent to kill, injure, harass, or intimidate a spouse or intimate partner, and who in the course of such travel commits or attempts to commit a crime of violence against the spouse or intimate partner; (2) a person who causes a spouse or intimate partner to travel in interstate or foreign commerce by force or coercion and in the course of such travel commits or attempts to commit a crime of violence against the spouse or intimate partner; (3) a person who travels in interstate or foreign commerce with the intent of violating a protection order or causes a person to travel in interstate or foreign commerce by force or coercion and violates a protection order; and (4) a person who uses the mail or any facility of interstate or foreign commerce to engage in a course of conduct that would place a person in reasonable fear of harm to themselves or their immediate family or intimate partner. In 2005, Congress reauthorized VAWA through the Violence Against Women and Department of Justice Reauthorization Act ( P.L. 109-162 ; VAWA 2005). VAWA 2005 added protections for battered and/or trafficked nonimmigrants, programs for American Indian victims, and programs designed to improve the public health response to domestic violence. The act emphasized collaboration among law enforcement; health and housing professionals; and women, men, and youth alliances, and it encourages community initiatives to address these issues. This reauthorization enhanced penalties for repeat stalking offenders and expanded the federal criminal definition of stalking to include cyberstalking. It also amended the federal criminal code to revise the definition of the crime of interstate stalking to (1) include placing someone under surveillance with the intent to kill, injure, harass, or intimidate that person; and (2) require consideration of substantial emotional harm to the stalking victim. Authorization for appropriations for the programs under VAWA expired in 2011; however, programs continued to receive appropriations in FY2012 and FY2013. In 2013, the 113 th Congress reauthorized VAWA through the Violence Against Women Reauthorization Act of 2013 ( P.L. 113-4 ; VAWA 2013). Most VAWA grants were reauthorized from FY2014 through FY2018. This section briefly describes provisions of VAWA 2013. VAWA 2013 reauthorized most VAWA grant programs and authorized appropriations at a lower level, in general. It consolidated several VAWA grant programs, and in doing so authorized new grant programs. These actions are summarized below. The Grants to Support Families in the Justice System program was created by consolidating two previously authorized programs: (1) the Safe Havens for Children program (also referred to as Supervised Visitation), and (2) the Court Training and Improvements program. The purpose of this program is to improve the civil and criminal justice systems' responses to families with a history of domestic violence, dating violence, sexual assault, or stalking, or in cases involving allegations of child sexual abuse. The Creating Hope Through Outreach, Options, Services, and Education for Children and Youth (CHOOSE Children & Youth) was created by consolidating two previously authorized programs: (1) Services to Advocate for and Respond to Youth (also referred to as Youth Services) and (2) Grants to Combat Domestic Violence, Dating Violence, Sexual Assault, and Stalking in Middle and High Schools (also referred to as Supporting Teens through Education and Protection, or STEP). The purpose of this program is to enhance the safety of youth and children who are victims of or exposed to domestic violence, dating violence, sexual assault, stalking, or sex trafficking. The program also aims to prevent future violence. The Saving Money and Reducing Tragedies Through Prevention (SMART Prevention) was created by consolidating two previously authorized programs: (1) Engaging Men and Youth in Prevention and Grants to Assist Children and (2) Youth Exposed to Violence. The SMART Prevention program aims to prevent domestic violence, sexual assault, dating violence, and stalking through awareness and education programs, and also through assisting children who have been exposed to violence and abuse. In addition, this program aims to prevent violence by engaging men as leaders and role models. The Grants to Strengthen the Healthcare System's Response to Domestic Violence, Dating Violence, Sexual Assault, and Stalking was created using the purpose areas of three previously unfunded programs—(1) Interdisciplinary Training and Education on Domestic Violence and Other Types of Violence and Abuse, (2) Research on Effective Interventions in the Health Care Setting, and (3) Grants to Foster Public Health Responses to Domestic Violence, Dating Violence, Sexual Assault, and Stalking—these programs were eliminated. The purpose of this program is to improve training and education for health professionals in preventing and responding to domestic violence, dating violence, sexual assault, and stalking. VAWA 2013 established new provisions for all VAWA grant programs. It established a nondiscrimination provision to ensure that victims are not denied services and are not subjected to discrimination based on actual or perceived race, color, religion, national origin, sex, gender identity, sexual orientation, or disability. It also enhanced protection of personally identifiable information of victims and specified the type of information that may be shared by grantees and subgrantees. It also required that any grantee or subgrantee that provides legal assistance must comply with certifications required under the Legal Assistance for Victims Grant Program. The 2013 reauthorization also added, modified, or expanded several definitions of terms in VAWA. Examples include the following: The definition of domestic violence was revised to specifically include "intimate partners" in addition to "current and former spouses." The term linguistically was removed from the Culturally Specific Services Grant and the definition of "culturally specific services" was amended to address the needs of culturally specific communities. With respect to providing VAWA-related services, the act added the terms population specific services and population specific organizations , which focus on "members of a specific underserved population." Underserved populations was redefined to include those who may be discriminated against based on religion , sexual orientation, or gender identity. The definition of cyberstalking was expanded to include use of any "electronic communication device or electronic communication service or electronic communication system of interstate commerce." A definition of rape crisis center was added, meaning "a nonprofit, nongovernmental, or tribal organization, or governmental entity in a State other than a Territory that provides intervention and related assistance ... to victims of sexual assault without regard to their age. In the case of a governmental entity, the entity may not be part of the criminal justice system ... and must be able to offer a comparable level of confidentiality as a nonprofit entity that provides similar victim services." Individual in later life was defined as a person who is 50 years of age or older. Youth was defined as a person who is 11 to 24 years of age. The definition of rural state was revised to include states with more densely populated rural areas than under the prior definition. VAWA 2013 imposed new accountability provisions, including an audit requirement and mandatory exclusion from eligibility if a grantee is found to have an unresolved audit finding. Additionally, it required OVW to establish a biennial conferral process with state and tribal coalitions and technical assistance providers that receive OVW funding. It prohibited conferences funded through cooperative agreements from using more than $20,000 in funding without prior written approval by DOJ officials. VAWA 2013 amended the DNA Analysis Backlog Elimination Act of 2000 ( P.L. 106-546 ) to strengthen audit requirements for sexual assault evidence backlogs. It also required that for each fiscal year through FY2018, not less than 75% of the total Debbie Smith grant amounts be awarded to carry out DNA analyses of samples from crime scenes for inclusion in the Combined DNA Index System (CODIS) and to increase the capacity of state or local government laboratories to carry out DNA analyses. Additionally, VAWA 2013 expanded the purpose areas of several VAWA grants to respond to the needs of sexual assault survivors by addressing rape kit backlogs. It also established a new requirement that at least 20% of funds within the STOP (Services, Training, Officers, Prosecutors) program and 25% of funds within the Grants to Encourage Arrest Policies and Enforce Protection Orders program be directed to programs that meaningfully address sexual assault. VAWA 2013 amended and authorized appropriations for the Trafficking Victims Protection Act of 2000 (Division A of P.L. 106-386 ). It enhanced measures to combat trafficking in persons, and amended the purpose areas for several grants to address sex trafficking. VAWA 2013 also clarified that victim services and legal assistance include services and assistance to victims of domestic violence, dating violence, sexual assault, or stalking who are also victims of severe forms of trafficking in persons. VAWA 2013 included new provisions for American Indian tribes. It granted authority to tribes to exercise special domestic violence criminal jurisdiction and civil jurisdiction to issue and enforce protection orders over any person. It also created a voluntary two-year pilot program for tribes that make a request to the Attorney General to be designated as a participating tribe to have special criminal jurisdiction over domestic violence cases. (Note: The Attorney General may grant a request after concluding that the tribe's criminal justice system has adequate safeguards in place to protect defendants' rights.) In addition, it created a new grant program to assist tribes in exercising special criminal jurisdiction in cases involving domestic violence. VAWA 2013 also expanded the purpose areas of grants for tribal governments and coalitions to include sex trafficking; develop and promote legislation and policies that enhance best practices for responding to violent crimes against Indian women; and raise awareness of and response to domestic violence, including identifying and providing technical assistance to enhance access to services for Indian women victims of domestic and sexual violence, including sex trafficking. VAWA 2013 extended VAWA coverage to derivative children whose self-petitioning parent died during the petition process, a benefit currently afforded to foreign nationals under the family-based provisions of the Immigration and Naturalization Act (INA). It also exempted VAWA self-petitioners, U visa petitioners, and battered foreign nationals from being classified as inadmissible for legal permanent resident status if their financial circumstances raised concerns about them becoming potential public charges. Additionally, it amended the INA to expand the definition of the nonimmigrant U visa to include victims of stalking. VAWA 2013 added several new purpose areas to the Grants to Encourage Arrest Policies and Enforcement of Protection Orders program (Arrest Program), one of which was to improve the criminal justice system response to immigrant victims of domestic violence, sexual assault, dating violence, and stalking. In addition to expanding the definition of underserved populations , VAWA 2013 established several new grant provisions to address the needs of underserved populations. It required STOP implementation plans to include demographic data on the distribution of underserved populations within states and how states will meet their needs. It expanded the purpose areas of the Grants to Combat Violent Crimes on Campuses program to address the needs of underserved populations on college campuses. It also dedicated 2% of annual appropriated funding for the Arrest and STOP programs to Grants for Outreach to Underserved Populations, a previously unfunded VAWA program. VAWA 2013 added housing rights for victims of domestic violence, dating violence, sexual assault, and stalking, including a provision stating that applicants may not be denied public housing assistance based on their status as victims of domestic violence, dating violence, sexual assault, or stalking. It also required each executive department carrying out a covered housing program to adopt a plan whereby tenants who are victims of domestic violence, dating violence, sexual assault, or stalking can be transferred to another available and safe unit of assisted housing. Additionally, it required the Secretary of Housing and Urban Development to establish policies and procedures under which a victim requesting such a transfer may receive Section 8 assistance under the U.S. Housing Act of 1937. Under the VAWA-authorized Transitional Housing Assistance Grant program, the act ensured that victims receiving transitional housing assistance are not subject to prohibited activities, including background checks or clinical evaluations, to determine eligibility for services. It removed the requirement that victims must be "fleeing" from a violent situation in order to receive transitional housing assistance. It also specified that transitional housing services may include employment assistance. VAWA 2013 made several changes to higher education policy. It amended the Clery Act and incorporated provisions from the Campus Sexual Violence Elimination Act. These provisions required, among other things, IHEs to report data on domestic violence, dating violence, and stalking in annual security reports (ASRs). Newly reportable crime categories included domestic violence, dating violence, and stalking. VAWA 2013 also added two new categories of bias applicable to hate crime reporting (i.e., national origin and gender identity). VAWA 2013 required ASRs to include a statement of the IHE's policy on programs to prevent sexual assaults, domestic violence, dating violence, and stalking; policies to address these incidents if they occur, including a statement on the standard of evidence that will be used during an institutional conduct proceeding regarding these crimes; and primary prevention programs to promote awareness of these crimes for incoming students and new employees, as well as providing ongoing awareness and prevention training for students and faculty. It also required that crime statistics on victims who were "intentionally selected" because of their national origin or gender identity are recorded and reported according to category of prejudice. In addition, VAWA 2013 required that students and employees receive written notification of available victim services including counseling, advocacy, and legal assistance, as well as options for modifying a victim's academic, living, transportation, or work arrangements. Victims were to be notified of their rights, including their right to notify or not notify law enforcement and campus authorities of a crime of sexual violence. The law also required that officials who investigate a complaint or conduct an administrative proceeding regarding sexual assault, domestic violence, dating violence, or stalking receive annual training on how to conduct investigations or proceedings that protect the safety of victims and promote accountability. VAWA 2013 amended rules for sexual acts in federal custodial facilities by adding "the commission of a sexual act" as grounds for civil action by a federal prisoner and mandating that detention facilities operated by the Department of Homeland Security and custodial facilities operated by the Department of Health and Human Services adopt national standards established pursuant to the requirements in the Prison Rape Elimination Act of 2003 ( P.L. 108-79 ). VAWA 2013 also enhanced criminal penalties for assaulting a spouse, intimate partner, or dating partner. In May 2015, as part of the Justice for Victims of Trafficking Act (Title IV, P.L. 114-22 ), the Rape Survivor Child Custody Act was enacted into law. It requires the Attorney General (through OVW) to increase grant funding under the STOP and SASP formula grant programs to states that have a law allowing the mother of a child conceived through rape to seek court-ordered termination of the parental rights of her rapist. The increase in formula grants is allowed to be provided for a total of four two-year periods (eight years), and is equal to not more than 10% of the total amount of funding provided to the state averaged over the previous three years. Of the increased funding, 25% is for STOP grants and 75% for the SASP grants. The Rape Survivor Child Custody Act authorized $5 million a year for FY2015 through FY2019 for the grant increases. There are several issues that Congress may consider in current reauthorization efforts. These include, but are not limited to, improvements to data collection, assessing tribal jurisdiction over non-tribal members who commit VAWA-related crimes on tribal lands, new approaches for law enforcement in assisting victims, and enforcement of the federal prohibition on firearms for those convicted of a misdemeanor crime of domestic violence and those who are subject to a domestic violence protective order. Congress may also consider further changes to VAWA programs. The Violence Against Women Reauthorization Act of 2019 ( H.R. 1585 ), as passed by the House, would address some of these issues. Among other things, it would reauthorize funding for VAWA programs and authorize new programs; amend and add definitions used for VAWA programs; amend federal criminal law relating to firearms, custodial rape, and stalking; and expand tribal jurisdiction over certain crimes committed on tribal lands. Congress may address issues concerning limited law enforcement data at the national level on the crimes of domestic violence and stalking. The data are limited because the UCR does not currently collect information on these offenses from state and local agencies like it does for its traditional violent and property crime offense categories. In 2019, the UCR program plans to begin collecting domestic violence offense data through the National Incident-Based Reporting System (NIBRS). NIBRS also includes stalking as part of an intimidation offense category. Even though the NIBRS data are not yet nationally representative, the FBI states that it is transitioning its UCR program to a "NIBRS only data collection" by 2021. Congress may consider options to expand the NIBRS program sooner than 2021 or to adjust the UCR program in other ways, such as by requiring the FBI to collect data on stalking as its own offense under NIBRS rather than incorporating it into the intimidation offense category. Congress may also address the availability of data on the sexual assault kit (SAK, or rape kit) backlog. According to the National Institute of Justice (NIJ), "it is unknown how many unanalyzed [SAKs] there are nationwide." NIJ notes that while there are many reasons why there are no data on the number of untested SAKs in law enforcement's possession, one contributing factor is that there is no national system for collecting these data. Also, tracking and counting SAKs is an antiquated process in many jurisdictions (often done in nonelectronic formats), and the availability of computerized evidence-tracking systems has been an issue for many jurisdictions for years. The Joyful Heart Foundation, a grassroots organization, addressed the SAK data void by attempting to count the backlog (through public records requests) and track data in cities and states across the country. While the organization's data are incomplete, it has estimates of rape kit backlogs for various cities and states. Thus far, it has identified approximately 41 municipal and county jurisdictions with known rape kit backlogs ranging from several hundred to thousands—its current total is 40,000 untested SAKs. Congress may assess the SAK backlog and debate if the federal response should be changed as the issue evolves and agencies, including NIJ, capture the full breadth of the problem. H.R. 1585 , as passed by the House, would authorize several new activities related to increasing or improving data collection. These include, but are not limited to, the following: requiring the Attorney General to establish an interagency working group to study federal efforts to collect data on sexual violence and to make recommendations on the harmonization of such efforts, authorizing funding for tribal governments to improve data collection and to enter information into and obtain information from national crime information databases, and requiring NIJ to prepare a report on the status of women in federal incarceration—this requirement allows for inmate and personnel data to be collected from the Bureau of Prisons. As discussed previously, VAWA 2013 granted authority to American Indian tribes to exercise special domestic violence criminal jurisdiction and civil jurisdiction to issue and enforce protection orders over any person, including non-tribal members. As of March 2018, 18 tribes were exercising this authority. These tribes have reported 143 arrests of 128 non-tribal individuals, which led to 74 convictions and five acquittals with 24 cases pending as of March 2018. According to the National Congress of American Indians (NCAI), tribes are exercising jurisdiction "with careful attention to the requirements of federal law and in a manner that upholds the rights of defendants." While NCAI issued its assessment report in 2018, Congress also may elect to assess implementation in the five years since this authority was granted. If it so chooses, Congress may require the Government Accountability Office (GAO) to evaluate tribal jurisdiction. Congress may elect to grant special jurisdiction over non-tribal members for additional VAWA crimes such as sexual assault and stalking, as well as non-VAWA crimes. NCAI stated in its assessment report that many implementing tribes were unable to prosecute non-tribal members for many crimes that co-occur with domestic violence such as drug and alcohol offenses. H.R. 1585 , as passed by the House, would amend tribal criminal jurisdiction authorized under Section 204 of the Indian Civil Rights Act. Among other changes, tribal jurisdiction over criminal behavior on tribal lands would consist of domestic violence ( H.R. 1585 would also expand the definition of domestic violence used for tribal jurisdiction), as well as obstruction of justice, assaulting a law enforcement officer, sex trafficking, sexual violence, and stalking. As there are further developments in the fields of criminal justice and public health, researchers and practitioners report new and developing approaches and methods for law enforcement and other criminal justice personnel in working with victims of domestic violence, sexual assault, dating violence, and stalking. Congress may consider these new approaches when debating additions to grant purpose areas or encouraging states to adopt certain practices. For example, over the last decade there has been a push for criminal justice professionals to incorporate trauma-informed policing and response policies. Congress may consider requiring law enforcement grantees to incorporate trauma-informed training and policies into their required training or standard operating procedures or creating new funding opportunities to develop these trainings and policies. Of note, OVW has supported several initiatives related to trauma-informed approaches. Other new and developing approaches include, but are not limited to, new protocols for police officers about when they would activate their body-worn cameras as they interact with victims of domestic violence, sexual assault, dating violence, or stalking and so-called "red flag" laws that allow law enforcement or family members to petition a court to have firearms removed from those who are a danger to themselves or others. H.R. 1585 , as passed by the House, would authorize a new demonstration program under OVW to promote trauma-informed training for law enforcement. Through this program, OVW would make grants on a competitive basis to eligible entities to implement evidence-based or promising policies and practices to incorporate trauma-informed techniques designed to prevent re-traumatization of crime victims and improve communication between victims and law enforcement officers, among other purpose areas, in an effort to increase the likelihood of successful investigations and prosecutions of reported crime in a manner that protects the victim to the greatest extent possible. The Gun Control Act (GCA) prohibits certain individuals from possessing firearms, including individuals who have been convicted of a misdemeanor crime of domestic violence and those who are subject to a protective order involving an intimate partner or child of an intimate partner. Congress may consider any number of issues surrounding prohibitions on firearms possession and matters of domestic violence, but the issue of enforcement of domestic violence and protection order prohibitions has been subject to some debate. While there is a federal process for preventing those convicted of a misdemeanor crime of domestic violence or those subject to a protective order from purchasing a firearm, there is not a federal process for these individuals to surrender their firearms. The process is left up to states and local jurisdictions, which vary in their approaches to enforcing these prohibitions. In some jurisdictions, the process for informing defendants/respondents they must surrender their firearms can vary by judge. Of note, VAWA 2005 established a provision that required states or units of local government to certify that its judicial policies and practices included notification to domestic violence offenders of the firearms prohibitions in Section 922(g)(8) and (g)(9) of Title 18 in order to be eligible to receive STOP funding. Congress may choose to take further steps to ensure the enforcement of these prohibitions, such as adding to the certification requirement, or it might leave the decisions to the states, some of which have enacted laws requiring the removal of firearms from those subject to the prohibitions. H.R. 1585 , as passed by the House, includes several provisions that seek to reduce firearms-related intimate partner violence. It would amend federal law to prohibit persons convicted of misdemeanor stalking crimes from receiving or possessing a firearm or ammunition, and revise related provisions governing domestic violence protection orders and the definition of "intimate partner" under current law. H.R. 1585 also includes other provisions related to improving enforcement of federal firearm possession prohibitions under 18 U.S.C. §922, subsections (g)(8), (g)(9), and (g)(10). In the next effort to reauthorize VAWA, Congress may debate additional changes to VAWA programs such as adding new grant purpose areas or additional crimes, creating new programs, or consolidating existing programs. Examples of potential changes Congress may consider should it choose to reauthorize VAWA appropriations include the following: Female genital mutilation or female genital cutting (FGM/C) may be added to grant programs in a variety of ways. For example, it can be added as a crime for services eligibility, or Congress may try to encourage or require states (in order to receive grant funding) to make FGM/C a crime. Many VAWA grant programs fund the same services and the same organizations. For example, nine separate VAWA programs may be used to fund emergency shelter or transitional housing. Congress may consider streamlining funding into fewer, larger grant programs. Currently, OVW administers 4 formula grant programs and 15 discretionary grant programs. Congress may opt to support domestic violence courts. While some grantees already use funds for this purpose and OVW has provided technical assistance to fund model domestic violence courts, Congress may elect to create a program to support these specialized courts. While there is a large amount of grantee data available on the VAWA programs administered by OVW, grantee data from the Rape Prevention and Education (RPE) formula grant program administered by the CDC are limited. Congress may choose to require the CDC to submit reports on the activities supported with RPE funds. H.R. 1585 , as passed by the House, would define FGM/C for VAWA grant purposes, and amend the purpose areas of three VAWA grant programs (STOP, Outreach and Services to Underserved Populations, and CHOOSE Children and Youth) to include providing culturally specific victim services regarding responses to, and prevention of, FGM/C. The bill would also require the Director of the FBI to classify FGM/C, or female circumcision, as a part II crime in the UCR (see " Categories of Crime Addressed through VAWA " for discussion of UCR crime data). H.R. 1585 would also amend the Rape Prevention and Education Grant Program to require the CDC Director to submit to Congress a report on the activities funded by grants and best practices relating to rape prevention and education. H.R. 1585 , if enacted, would make many other changes that are not discussed in detail in this report. These include changes to definitions used for VAWA grant purposes, new housing protections for victims, and the creation of new grant programs that address issues such as lethality assessment in domestic violence cases and economic security for victims. Of note, H.R. 1585 would reauthorize funding for most VAWA programs for FY2020-FY2024. The Violence Against Women Reauthorization Act of 2013 ( P.L. 113-4 ) authorized appropriations for most VAWA programs for FY2014 through FY2018. Table A-1 provides descriptions of currently funded VAWA programs, Table A-2 provides a list of unfunded VAWA-authorized programs, and Table A-3 provides a five-year funding history of VAWA programs by total funding amounts for each administrative office. For more-detailed program funding, see Table 1 .
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The Violence Against Women Act (VAWA; Title IV of P.L. 103-322) was originally enacted in 1994. It addressed congressional concerns about violent crime, and violence against women in particular, in several ways. It allowed for enhanced sentencing of repeat federal sex offenders; mandated restitution to victims of specified federal sex offenses; and authorized grants to state, local, and tribal law enforcement entities to investigate and prosecute violent crimes against women, among other things. VAWA has been reauthorized three times since its original enactment. Most recently, Congress passed and President Obama signed the Violence Against Women Reauthorization Act of 2013 (P.L. 113-4), which reauthorized most VAWA programs through FY2018, among other things. The fundamental goals of VAWA are to prevent violent crime; respond to the needs of crime victims; learn more about crime; and change public attitudes through a collaborative effort by the criminal justice system, social service agencies, research organizations, schools, public health organizations, and private organizations. The federal government tries to achieve these goals primarily through federal grant programs that provide funding to state, tribal, territorial, and local governments; nonprofit organizations; and universities. VAWA programs generally address domestic violence, sexual assault, dating violence, and stalking—crimes for which the risk of victimization is highest for women—although some VAWA programs address additional crimes. VAWA grant programs largely address the criminal justice system and community response to these crimes, but certain programs address prevention as well. The Office on Violence Against Women (OVW) administers the majority of VAWA-authorized programs, while other federal agencies, including the Centers for Disease Control and Prevention (CDC) and the Office of Justice Programs (OJP), also manage VAWA programs. Since its creation in 1995 through FY2018, OVW has awarded more than $8 billion in grants and cooperative agreements to state, tribal, and local governments, nonprofit organizations, and universities. In FY2019, approximately $559 million was appropriated for VAWA-authorized programs administered by OVW, OJP, and CDC. While several extensions of authorization for VAWA were provided through FY2019 continuing appropriations, authorizations for appropriations for all VAWA programs have since expired. However, all VAWA programs funded in FY2018 have been funded in FY2019 (select programs at slightly higher levels), and thus far it appears that the expiration of authorizations has not impacted the continuing operation of VAWA programs. The Administration has requested FY2020 funding for all VAWA-authorized programs funded in FY2019. There are several issues that Congress may consider in efforts to reauthorize VAWA. These include, but are not limited to, improvements to data collection on domestic violence and stalking or the rape kit backlog; assessing the implementation and future direction of tribal jurisdiction over non-tribal members, including potentially adding new crimes under VAWA; new approaches for law enforcement in assisting victims; and enforcement of the federal prohibition on firearms for those convicted of a misdemeanor crime of domestic violence and those who are subject to a domestic violence protective order. Congress may also consider further changes to VAWA programs. In the 116th Congress, the House passed the Violence Against Women Reauthorization Act of 2019 (H.R. 1585). Among other things, it would reauthorize funding for VAWA programs and authorize new programs; amend and add definitions used for VAWA programs; amend federal criminal law relating to firearms, custodial rape, and stalking; and expand tribal jurisdiction over certain crimes committed on tribal lands.
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This report identifies selected current major trade issues for U.S. agriculture that may be of interest to the 116 th Congress. It provides background on individual trade issues and attempts to bring perspective on the significance of each for U.S. agricultural trade. Each trade issue summary concludes with an assessment of its current status. The report begins by examining a series of overarching issues. These issues include U.S. agricultural trade and its importance to the agricultural sector, a brief description of the trade policy being pursued by the Trump Administration and its ramifications for U.S. agricultural exports, the Administration's actions to mitigate the economic impact on agriculture from retaliatory actions by trading partners against its trade policies, and the implications for U.S. agriculture of the U.S. withdrawal from the Trans-Pacific Partnership (TPP) agreement. The report then reviews a number of ongoing trade disputes and trade negotiations while also examining a series of narrower trade issues of importance to the agricultural sector. The format for these more focused trade issues is similar, consisting of background and perspective on the issue at hand and an assessment of their current status. U.S. agricultural exports have long been a bright spot in the U.S. balance of trade, with exports exceeding imports in every year since 1960. In recent years, the value of farm exports have experienced a downturn from the record level recorded in FY2014. The U.S. Department of Agriculture (USDA) forecasts U.S. agricultural exports in FY2019 at $141.5 billion (see Figure 1 ). If realized, this total would represent a decline from FY2018, when exports totaled $143 billion. Exports in FY2018 were $3 billion above the FY2017 total but almost $11 billion below the peak of $152.3 billion in FY2014. The decline in the value of farm exports since FY2014 initially reflected lower market prices for bulk commodities, such as soybeans and corn. Agricultural prices and U.S. exports of certain bulk commodities such as soybeans were further affected in 2018 by retaliatory tariffs imposed on selected U.S. agricultural imports by China, Canada, Mexico, the European Union (EU), and Turkey. The retaliatory tariffs were in response to the Trump Administration's imposition of Section 301 tariffs on certain imports from China and Section 232 tariffs on U.S. imports of steel and aluminum. U.S. agricultural imports are forecast to total $128 billion in FY2019, slightly up from $127.6 billion in FY2018, resulting in an agricultural trade surplus of $13.5 billion. This would be below the surplus of $15.8 billion in FY2018 and below the record high in nominal dollars of $43.1 billion in FY2014. Agricultural exports are important both to farmers and to the U.S. economy. During the calendar years 2017 and 2018, the value of U.S. agricultural exports accounted for 8% and 9% of total U.S. exports, respectively, and 5% of total U.S. imports, according to the U.S. Census data. As for the contribution of U.S. agricultural exports to the overall U.S. economy, USDA's Economic Research Service (ERS) estimates that in 2017 each dollar of U.S. agricultural exports stimulated an additional $1.30 in business activity. Moreover, that same year, U.S. agricultural exports generated an estimated 1,161,000 full-time civilian jobs, including 795,000 jobs outside the farm sector. With the productivity of U.S. agriculture growing faster than domestic demand, farmers and agriculturally oriented firms rely on export markets to sustain prices and revenue. Within the agricultural sector itself, the importance of exports account for around 20% of total farm production by value. Export markets are a major outlet for many farm commodities, absorbing over one-half of U.S. output for cotton and about half of total U.S. production for wheat, soybeans, and some specialty crops. Within the overall mix of agricultural exports, soybeans, corn, other feed crops, and wheat continue to rank at or near the top of the list of farm exports by volume. The high-value product (HVP) category—which includes such products as live animals, meat, dairy products, fruits and vegetables, nuts, fats, hides, manufactured feeds, sugar products, processed fruits and vegetables, and other processed food products—comprises the largest share of exports in value terms. In FY2018, the HVP share of the value of U.S. agricultural exports represented 66% of the total. All U.S. states export agricultural commodities, but a minority of states account for a majority of farm export sales. In calendar year 2017, the 10 leading agricultural exporting states based on value—California, Iowa, Illinois, Texas, Minnesota, Nebraska, Kansas, Indiana, North Dakota, and Missouri—accounted for 57% of the total value of U.S. agricultural exports that year. Status : In December 2018, Congress reauthorized major agricultural export promotion programs through FY2023 with the passage of the so-called 2018 farm bill ( P.L. 115-334 ). Title III of the farm bill includes provisions covering export credit guarantee programs, export market development programs, and international science and technical exchange programs that are designed to develop agricultural export markets in emerging economies. In establishing policy for U.S. participation in international trade, the Trump Administration has placed increased emphasis on trade deficits, which it views as an indicator of "unfair" foreign trade practices, with potential implications for U.S. industry and jobs. With the objective of reducing trade deficits, the Administration's trade policy has focused on withdrawing from or renegotiating existing trade agreements that the Administration views as being "unfair;" initiating new bilateral agreements; and responding to the trade practices of U.S. trade partners (whether geopolitical ally or adversary) that it views as unfair, illegal, or threatening to U.S. industry, with punitive trade actions. The punitive actions have included the imposition of Section 232 tariffs on U.S. imports of steel and aluminum and Section 301 tariffs on U.S. imports of products from China. The direction of the Administration's trade policy—for example, withdrawing from the Trans-Pacific Partnership (TPP) agreement with Japan and 10 other Pacific-facing nations and engaging in trade disputes with important agricultural trading partners that have resulted in retaliatory tariffs on U.S. agricultural products—has coincided with market share losses for certain U.S. agricultural exports. The Trump Administration has taken the position that current trade agreements to which the United States is a party and where the U.S. has a trade deficit or where the Administration perceives that the United States is being treated unfairly must be renegotiated or the United States will withdraw from them. Furthermore, the Administration questions the benefits of multi-party agreements, viewing them in some instances as improper vehicles for achieving meaningful negotiations. The Administration has also threatened to withdraw from the World Trade Organization (WTO) if it fails to undergo certain reforms. In January 2017, the Trump Administration withdrew from the TPP, which was subsequently concluded by the remaining TPP signatories under a modified framework renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018. Under U.S. initiative, the North American Free Trade Agreement (NAFTA) was renegotiated as the U.S.-Mexico-Canada Agreement (USMCA). USMCA was signed by the leaders of the three nations in November 2018 but requires legislative ratification to enter into force. In contrast to the Trump Administration's view of regional or multilateral negotiations, the Administration believes that greater potential gains can be achieved under bilateral negotiations where two countries can negotiate directly in the absence of group consensus. The Administration has sought to update some existing bilateral trade agreements and open new bilateral negotiations: The Administration negotiated selected modifications to the U.S.-South Korea free trade agreement. The Administration has notified Congress of its intent to begin negotiations under Trade Promotion Authority (TPA) with trading partners including Japan, the EU, and the United Kingdom (UK). The Administration is currently engaged in bilateral trade negotiations with China in an attempt to resolve the current trade dispute that has resulted in retaliatory tariffs on a wide range of U.S. agricultural products. Status : The Administration's trade policy actions have in some cases resulted in retaliatory tariffs against U.S. agricultural product exports, while the status of new agreements with several important agricultural trading partners, such as Canada and Mexico, remains uncertain. U.S. agricultural exports continue to be subject to retaliatory tariffs imposed by trading partners in response to the Administration's imposition of Section 232 tariffs on steel and aluminum and Section 301 tariffs on China. The signed USMCA awaits consideration by Congress and ratification by Canada and Mexico. Numerous stakeholders have raised concerns that U.S. agriculture will lose export market shares to competitors due to U.S. withdrawal from TPP and its absence from CPTPP. Some stakeholders wonder whether agriculture will be prioritized in all planned bilateral negotiations. The Office of the U.S. Trade Representative (USTR) had indicated that it may pursue negotiations with Japan in stages, declaring that the automobiles sector will be a priority. At the same time, both President Trump and the Secretary of Agriculture have stated that U.S.-Japan negotiations would occur in stages with a "very quick" deal on agriculture. However, the Japanese economy minister has stated that the United States and Japan would not reach an agreement in any one sector before other sectors. Elsewhere, the EU negotiating mandate for conducting trade negotiations with the United States articulates that a key EU goal is "a trade agreement limited to the elimination of tariffs for industrial goods only, excluding agricultural products." As for the UK, it cannot formally negotiate or conclude a new trade agreement with the United States until it exits the EU. On March 23, 2018, the Trump Administration applied a 25% tariff to certain U.S. steel imports and a 10% tariff to certain U.S. aluminum imports under Section 232 of the Trade Expansion Act of 1962. This action followed Department of Commerce (DOC) investigations that determined that current imports threaten U.S. national security. Citing objections to China's policies on intellectual property, technology, and innovation, the Administration also implemented three rounds of tariff increases under Section 301 on a total of $250 billion worth of Chinese products. Canada, China, Mexico, the EU, and Turkey—whose exports were affected by the steel and aluminum tariffs—retaliated with tariffs on imports of a range of U.S. agricultural and food products and other goods. India has proposed retaliatory tariffs on a number of U.S. agricultural products, but it has delayed implementation pending ongoing negotiations with the Trump Administration. In all, the retaliatory tariffs imposed by these trading partners have targeted more than 800 U.S. agricultural and food products. Exports of those products to these five trading partners amounted to $26.9 billion in calendar year 2017, or about 18% of global U.S. agricultural and food product exports of $150.8 billion that year. Retaliatory tariffs by China affect 99% of U.S. agricultural products exported to China. With a combination of Section 301 and Section 232 retaliations, China has levied retaliatory tariffs ranging from 5% to 50%, in addition to existing most-favored nation (MFN) tariffs, on more than 800 U.S. food and agricultural products that were worth about $20.6 billion in calendar year 2017. The products, subject to retaliatory tariffs, span all agricultural and food categories, including grains, meat and animal products, fruits and vegetables, seafood, and processed foods. The U.S. agricultural imports into China with the largest loss of markets since the tariffs were imposed in 2018, compared with 2017, are soybeans, cotton, sorghum, and hides and skins. Canada has levied retaliatory tariffs of 10% on more than 20 U.S. agricultural and food products that are otherwise duty free under NAFTA. U.S. exports most affected by these tariffs are roasted coffee, ketchup, various beverage waters, licorice and toffee, and orange juice. U.S. exports of the products subject to Canada's retaliatory tariffs were valued at $2.6 billion in 2017. Mexico has placed retaliatory tariffs of 15%-25% on a range of U.S. products that are otherwise duty free under NAFTA. U.S. exports to Mexico of these products amounted to approximately $2.5 billion in 2017. U.S. exports of cheese and pork have been the commodities most affected by Mexico's retaliatory tariffs as measured by reduced exports in 2018 compared with 2017. The EU has levied a 25% tariff on certain U.S. exports of prepared vegetables and legumes, grains, fruit juice, peanut butter, and whiskey, which together amounted to $1 billion in sales in 2017. Turkey has imposed retaliatory tariffs on U.S. tree nuts, rice, prepared foods, whiskey, and unmanufactured tobacco. U.S. exports of these products to Turkey totaled $250 million in 2017. A study from Purdue University found that the retaliatory tariffs could result in a reduction of U.S. agricultural exports by as much as $8 billion annually (in inflation adjusted values) after the markets have adjusted in the near future. The study also projects that the reduction in U.S. agricultural exports could lower agricultural land prices and result in the reallocation of 45,000 farm, ranch, and processing workers. Additionally, the authors suggest that U.S. soybean producers would see the most change in the wake of tariff retaliation, with exports potentially falling by 21% and land prices declining by about 18%. The impact estimated by the model would be affected over time by other policy shocks and technological and population changes that are not accounted for in the model. A recent United Nations study states that extended imposition of retaliatory tariffs will erode U.S. market share in favor of export competitors in the longer term. Status : U.S. agricultural exports continue to face retaliatory tariffs in response to the Administration's 2018 trade actions. The USDA forecasts U.S. agricultural exports for FY2019 at $141.5 billion compared with $143.4 billion in FY2018, reflecting its expectation that increased trade with other regions that are not involved in the tariff dispute will partially offset tariff-related trade losses, particularly with China. U.S. agricultural exports to China are forecast to decline in FY2019 by over $7 billion from $16 billion in FY2018. The United States and China are engaged in bilateral discussions to resolve the current trade dispute. USMCA—the proposed successor to NAFTA—does not address the Section 232 tariffs that led Canada and Mexico to impose retaliatory tariffs. Representatives of the U.S. business community, agriculture interest groups, other congressional leaders, and Canadian and Mexican government officials have stated that the Section 232 tariff issues must be resolved before USMCA enters into force. On July 24, 2018, Secretary of Agriculture Sonny Perdue announced that the USDA would take several temporary actions to assist farmers in response to trade-related consequences from what the Administration characterized as "unjustified retaliation" against several U.S. agricultural products in 2018. Specifically, the Secretary said that the USDA would authorize up to $12 billion in financial assistance—referred to as a trade aid package—for certain agricultural commodities using the authority provided under Section 5 of the Commodity Credit Corporation (CCC) Charter Act (15 U.S.C. §714c). The Secretary initially stated that there would be no further trade-related financial assistance beyond this $12 billion package. However, on May 10, 2019, Secretary Perdue tweeted that the White House had directed USDA to work on a new aid package. The 2018 trade aid package includes (1) a Market Facilitation Program (MFP) of direct payments (valued at up to $10 billion) to producers of commodities most affected by the trade retaliation, (2) a Food Purchase and Distribution Program to partially offset lost export sales of affected commodities ($1.2 billion), and (3) an Agricultural Trade Promotion program to expand foreign markets ($200 million). The largest component of the trade aid package, the MFP, provides direct financial assistance to producers of commodities that are most impacted by actions of foreign governments resulting in the loss of traditional exports. Affected commodities include soybeans, corn, cotton, sorghum, wheat, hogs, dairy, fresh sweet cherries, and shelled almonds. USDA announced MFP per-unit payment rates to be applied to certified production of eligible commodities in 2018. USDA's Farm Service Agency administers the MFP. Eligible participants had to sign up for payments from September 2018 to February 2019. They also had to meet additional criteria, including being "actively engaged in farming," having an average adjusted gross income of less than $900,000, meeting conservation compliance provisions, and certifying their 2018 production with USDA by May 1, 2019. USDA determined the MFP per-unit payment rate based on the estimated "direct trade damage"—the difference in expected trade value for each affected commodity with and without the retaliatory tariffs. The estimated "trade damage" for each affected commodity was then divided by the crop's production in 2017 to derive a per-unit payment rate. Indirect effects—such as any decline in market prices for affected commodities that were used domestically rather than exported—were not included in the payment calculation. Based on 2017 production data, USDA estimated that approximately $9.6 billion would be distributed in MFP payments to eligible producers, with over three-fourths ($7.3 billion) of MFP payments provided to soybean producers. By linking MFP commodity payments only to the trade loss associated with each named MFP commodity, the payment formula favored commodities that relied more heavily on export markets than on domestic markets. Soybean growers and most farm-advocacy groups have generally been supportive of the payments, but some commodity groups—most notably associations representing corn, wheat, milk, and specialty crops—argued that the MFP payment formulation was inadequate to fully compensate their industries. For example, the National Corn Growers Association states that the 2018 trade disputes lowered corn prices by $0.44 per bushel for a potential total loss of $6.3 billion. Similarly, the National Association of Wheat Growers estimates a $0.75 per bushel decrease in domestic wheat prices that resulted in nearly $2.5 billion in lost value, while the National Milk Producers Federation has calculated that the retaliatory tariffs resulted in a $1.10 per hundredweight decline in domestic milk prices and over $1.2 billion in losses for milk producers based on milk futures prices. Similarly, many specialty crop groups contend that their tariff-related export losses were not fully compensated by the trade aid programs. To this point, a 2018 study by researchers at the University of California-Davis stated that, in California alone, specialty crops may suffer trade-related losses of over $3.3 billion on their 2018 production. Status: In March 2019, USDA estimated that a total of $8.7 billion in outlays would be made available under the MFP program, including $5.2 billion in 2018 and $3.5 billion in 2019. The large volume of payments could attract international attention about whether they are consistent with WTO rules and commitments on domestic support. The trade aid package raises a number of potential questions. For instance, if the United States and China do not reach an agreement in their ongoing tariff-driven trade negotiations, should another trade aid package, or some alternative compensatory measure, be provided in 2019, and possibly beyond? If MFP payments are to be repeated in the future, should USDA revise its payment formulation to provide a broader distribution of payments across the U.S. agricultural sector? The TPP was concluded on October 4, 2015, among 12 countries: the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The agreement had not yet entered into force when President Trump signed an executive order withdrawing the United States from TPP on January 23, 2017. On March 8, 2018, the remaining 11 countries concluded a revised agreement—the CPTPP. On December 30, 2018, the CPTPP entered into force among the first six countries to ratify the agreement—Canada, Australia, Japan, Mexico, New Zealand, and Singapore. On January 14, 2019, the CPTPP entered into force for Vietnam. With the United States, the TPP would have become the world's largest trade agreement, covering 40% of the global economy and providing comprehensive market access through the elimination and reduction of tariff and non-tariff barriers. The TPP provisions would have significantly increased the overseas markets to which U.S. farm and food products would have preferential access. The CPTPP provisions are based on the TPP. The agricultural provisions of the CPTPP seek to liberalize trade through lower tariffs, expanded tariff-rate quotas (TRQs), and agreements for reducing non-tariff barriers, including laws and regulations pertaining to products of agricultural biotechnology. In 2016, the U.S. International Trade Commission (USITC) had assessed the potential economic benefits from TPP ratification, projecting that by 2032 U.S. agricultural exports would be higher by $7.2 billion, or 2.6%, under TPP than without the agreement. Most of the increase in U.S. exports would have been concentrated in Japan (up $3.6 billion) and Vietnam (up $3.3 billion). CPTPP countries represent a major component of U.S. farm and food trade, providing markets for 42% of U.S. farm exports between 2015 and 2018 while also supplying 52% of U.S. agricultural imports. By one estimate, U.S. absence from CPTPP will lead to a decline in U.S. agricultural exports of about $1.8 billion (1.2% of FY2018 U.S. agricultural exports of $143 billion) per year. The combination of U.S. absence from CPTPP, retaliatory tariffs on U.S. farm and food exports, and the possibility of the United States withdrawing entirely from NAFTA—as President Trump has threatened in the absence of USMCA ratification—could lead to a potential annual drop in U.S. agricultural exports of $21.8 billion, according to a study commissioned by the Farm Foundation. As the CPTPP agreement is relatively new, the possible range of impact on U.S. agriculture is uncertain because of limited studies that are available. A broad cross-section of agricultural groups and food and agribusiness interests are concerned about losing potential export markets given U.S. absence from CPTPP. Under CPTPP, for example, Japanese tariffs on wheat imports will face a 50% reduction by 2025, which will put U.S. wheat exports to Japan at a competitive disadvantage. Similarly, the U.S. dairy industry estimates that by 2027, almost half of the U.S. dairy exports to Japan are likely to be replaced by dairy products from CPTPP and other countries with preferential trading agreements with Japan. Japan has historically accounted for more than a quarter of the total value of U.S. beef and pork exports. The U.S. share of Japan's imports of these commodities is expected to decline, because CPTPP competitors receive more favorable access to the Japanese market for beef and pork. U.S. Meat Export Federation states that annual beef export losses could reach $550 million by 2023 and more than $1.2 billion by 2028. Annual U.S. pork export losses are estimated to exceed $600 million by 2023 and reach $1 billion by 2028. USDA officials and representatives of the U.S. wheat and barley industries assert that U.S. wheat and barley exports are rapidly losing market share in Japan to CPTPP member countries and the EU. Status : U.S. agricultural exports appear to be at an increasing disadvantage in the CPTPP member country markets as these countries have begun to expand market access and reduce tariffs on imported products from CPTPP signatory countries. On October 16, 2018, under the TPA procedures, the Trump Administration gave Congress its official 90-day advance notification of intent to enter into trade negotiations with Japan, a CPTPP member country. In view of the Trump Administration's expressed objectives to "achieve fairer, more balanced trade," including in auto trade, stakeholders are uncertain about the prospects of reaching a quick deal with Japan. At the same time, both President Trump and the Secretary of Agriculture have stated that U.S.-Japan negotiations would occur in stages with a "very quick" deal on agriculture. However, the Japanese economy minister has stated that the United States and Japan would not reach an agreement in any one sector before other sectors. Since 2002, Canada has been the United States' top agricultural export market, with U.S. agricultural exports averaging over $20 billion between FY2016 and FY2018. In FY2018, Canada accounted for 14% of the total value of U.S. agricultural exports to all destinations. Mexico has been the third-largest market for U.S. agricultural exports since FY2010. U.S. agricultural exports to Mexico averaged over $18 billion between FY2016 and FY2018, accounting for 13% of the total value of U.S. agricultural exports to all destinations in FY2018. On September 30, 2018, the Trump Administration announced an agreement with Canada and Mexico, USMCA, which it is promoting as a replacement for the NAFTA. Under NAFTA, all agricultural tariffs were phased out to zero except for certain products traded between the United States and Canada. These included U.S. imports from Canada of dairy products, peanuts, peanut butter, cotton, sugar, and sugar-containing products and Canadian imports from the United States of dairy products, poultry, eggs, and margarine. Quotas that once governed bilateral trade in these commodities were redefined as TRQs to comply with WTO commitments. Under a TRQ, a lower tariff rate is levied on import quantities within the quota amount, while a higher tariff rate is imposed on quantities in excess of the quota. The United States and Mexico agreement under NAFTA did not exclude any agricultural products from trade liberalization. The proposed USMCA would expand upon the agricultural provisions of NAFTA. All food and agricultural products that have zero tariffs under NAFTA would remain at zero under USMCA. Under USMCA, market access would be expanded for the agricultural products traded between Canada and the United States that were exempt from tariff elimination under NAFTA. Canada agreed to create new U.S.-specific TRQs for U.S. dairy products and to replace the existing NAFTA poultry TRQs with new USMCA TRQs. All U.S. exports within the set TRQ volume limit would be subject to zero tariffs rates, but U.S. over-quota exports would still face the higher levels of tariffs currently in place under Canada's WTO commitment. The United States, in turn, agreed to improve access for imports of Canadian dairy, sugar, peanuts, and cotton. Canada and the United States also agreed to grade each other's like varieties of wheat as if they were produced domestically, a long-standing request of the U.S. wheat industry. Under USMCA, provisions are made for textiles and apparel to promote greater use of North American origin products, which may support domestic U.S. cotton production. Also, each country would offer the same treatment for distributing another USMCA country's spirits, wine, beer, and other alcoholic beverages as it would its own products. USMCA's Sanitary and Phytosanitary (SPS) chapter calls for greater transparency in SPS rules and improved regulatory alignment among the three countries. Under USMCA, the United States, Canada, and Mexico agreed to provide procedural safeguards for recognition of new geographic indications, which are place names used to identify products that come from certain regions or locations. The agricultural chapter of USMCA also lays out provisions for addressing the products of agricultural biotechnology, an issue NAFTA does not address. In April 2019, USITC released its report that provides an assessment of the likely effects of USMCA on the overall U.S. economy and its component sectors. Because NAFTA has already eliminated duties on most goods and reduced most non-tariff barriers, USITC's quantitative assessment includes changes that are not easily quantifiable. These provisions of trade negotiations were excluded from past USITC quantitative analyses. The provisions included in USMCA assessment by USITC—such as intellectual property rights, future commitments to open flows of data, and strengthening labor standards and rights—may reduce uncertainty in future trading regimes. Uncertainty reducing provisions are part of most free-trade agreements, including NAFTA, even if past assessments excluded them in the analyses. The USITC report finds that U.S. agricultural exports would increase by 1.1% in year 6 of USMCA implementation compared to its 2017 baseline export levels. In inflation-adjusted dollars, U.S. dairy exports to NAFTA countries would increase by $314.5 million (7.1%), and U.S. poultry exports would increase by $183.5 million (1%) compared to exports in 2017. A 2018 study commissioned by the Farm Foundation performs an economy-wide analysis, but the analysis takes into consideration only the changes in agricultural tariffs and TRQs proposed under USMCA. The market access changes are introduced as shocks into a multi-region, economy-wide model. The impacts of these changes are analyzed after the economy has adjusted to the shocks after full implementation of USMCA—year 6. The adjustment process can include changes in production and consumption structure, including production costs and changes in the volume of agricultural outputs. This study estimates, in 2014 dollars, a net increase in annual U.S. agricultural exports of $450 million under USMCA, or about 1% of U.S. agricultural exports under NAFTA—$41 billion in FY2014. It projects the export losses from the retaliatory tariffs imposed by Canada and Mexico in response to U.S. Section 232 tariffs on steel and aluminum imports to be $1.8 billion per year (in 2014 dollars), which would more than offset the projected export gain of $450 million from USMCA. These losses include changes in production decisions and volumes resulting from higher production costs. This study does not consider changes in other sectors of the economy that would result from the implementation of USMCA provisions in these other sectors. Moreover, the impact estimated by the model would be affected over time by other policy shocks and technological and population changes that are not accounted for in the model. According to an updated version of the Farm Foundation study, under the possible scenario of a complete withdrawal from NAFTA without ratification of USMCA, tariffs on U.S. exports to Canada and Mexico would be expected to return to the higher WTO MFN rates. Under this scenario, the study finds that, in 2014 dollars, U.S. agricultural and food exports to Canada and Mexico would decline by about $12 billion annually. A study conducted by researchers at the International Monetary Fund assesses the potential impacts of USMCA on North America as a region taking into consideration the following provisions of the proposed USMCA: (1) higher vehicle and auto parts regional value content requirement; (2) new labor value content requirement for vehicles; (3) stricter rules of origin for USMCA textile and apparel trade; (4) agricultural trade liberalization that increases U.S. access to Canadian supply-managed markets and reduces U.S. barriers on Canadian dairy, sugar and sugar products, and peanuts and peanut products; and (5) trade facilitation measures. The results describe a medium-term adjustment five to seven years after full implementation of USMCA—year 6. By this time, labor and capital would have been reallocated among sectors, but new investment spending would not yet have increased productive capacity. The study compares base period with what may happen five to seven years after full implementation of USMCA. This study finds that increasing higher regional vehicle and labor requirements would contribute to an economic loss for all three USMCA countries, with a decline in the production of vehicles and parts, shifts toward greater sourcing of both vehicles and parts from outside of the region, and higher prices for consumers. Regarding agricultural provisions of USMCA, the report highlights that Canada would stand to gain more than the United States. The study also highlights that the trade facilitation provisions of USMCA would potentially provide the largest gain to the region. Another researcher reiterates the findings of the International Monetary Fund study that the new domestic content provisions in USMCA would increase input costs for U.S. farmers who would end up paying more for trucks and machinery. As few studies have analyzed the potential impacts of USMCA, the diversity in the findings regarding the impacts from the implementation of USMCA is limited. Stakeholder groups have expressed mixed responses to USMCA. A broad coalition representing more than 200 U.S. companies and industry associations has advocated for USMCA's approval. The American Farm Bureau Federation, which is the largest general farm organization, expressed satisfaction that USMCA not only locks in market opportunities previously developed but also builds on those trade relationships in several key areas. On the other hand, the National Farmers Union and the Institute for Agriculture and Trade Policy have expressed concern that the proposed agreement does not go far enough to institute a fair trade framework that benefits family farmers and ranchers. Status: The proposed USMCA does not enter into force unless approved by the U.S. Congress and ratified by Canada and Mexico. A report by USITC that assesses the impact of USMCA on U.S. economy was submitted to Congress on April 18, 2019. The timeline for congressional approval of USMCA would likely be governed by the TPA procedures established under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 ( P.L. 114-26 ) but would not be initiated until the President submits the draft implementing bill to Congress. Some policymakers have stated that the path to ratifying USMCA by Congress is uncertain, in part because the three countries have yet to resolve disputes over U.S. Section 232 tariffs on imports of steel and aluminum and over the retaliatory tariffs that Canada and Mexico have imposed on U.S. agricultural products. Senator Chuck Grassley is reported to have called on the Trump Administration to lift tariffs on steel and aluminum imports from Canada and Mexico before Congress begins considering legislation to implement USMCA. House Speaker Nancy Pelosi has reportedly stated that she wants "stronger enforcement language" and that USMCA talks should be reopened to tighten enforcement provisions for labor and environmental protections. For more information, see CRS Report R45661, Agricultural Provisions of the U.S.-Mexico-Canada Agreement . The Canadian dairy sector limits production, sets prices, and restricts imports. Canadian imports of dairy products are restricted through TRQs, with over-quota tariffs in excess of 200% for some products. Although Canada is the second-largest market for U.S. dairy product exports, U.S. exports would likely be higher but for Canadian import restrictions. In recent years, U.S. milk producers began exporting increased quantities of ultra-filtered (UF) milk to Canada. UF milk is a high-protein liquid product made by separating and concentrating certain milk components (such as protein and fat) for use as ingredients in dairy products, such as cheese, yogurt, and ice cream. U.S. UF milk found a market among Canadian cheese makers in 2008 after Canada revised its compositional standards for cheese. This revision significantly reduced the use of several milk products that U.S. processors had been supplying to Canadian food manufacturers, including milk protein concentrates and dried protein products. In recent years, growing demand for butterfat in Canada resulted in increased Canadian milk production and, consequently, surplus supplies of skim milk. To address the surplus, Canada adopted the Class 7 milk price classification in 2017 (Class 6 in Ontario). Milk classified as Class 7 comprises skim milk components—primarily milk protein concentrates (MPC) and skim milk powder (SMP)—used to process dairy products. Prices for Class 7 products were set at low levels. Once the Class 7 regime was implemented, Canadian skim milk products became cheaper. Canada expanded global exports of SMP with the consequence that U.S. producers lost exports of high-protein UF milk to Canadian cheese and yogurt processors. According to USDA, the value of U.S. UF milk exports to Canada peaked at nearly $107 million in 2015 but declined after the Class 7 regime was implemented in 2017 to $49 million in 2017 and $32 million in 2018. At the same time, Canada's exports of SMP more than tripled in 2017 to $133 million, compared with $42 million in 2016 before the Class 7 price regime was implemented. Eliminating Canada's Class 7 pricing regime became a priority for the U.S. dairy industry when NAFTA renegotiations commenced in 2017. Status : Under USMCA, Canada agreed to eliminate the Class 7 pricing regime six months after USMCA enters into force. Canada also agreed to reclassify Class 7 products according to their end use and base its selling price on a formula that takes into consideration the USDA reported nonfat dry milk price. Also under the agreement, Canada would be required to monitor its exports of MPC, SMP, and infant formula and report at the harmonized tariff schedule level monthly. Although Canada would maintain its milk supply management system under USMCA, it would expand TRQs for U.S. exports of milk, cheese, cream, skim milk powder, condensed milk, yogurt, and several other dairy products. U.S. dairy products within the USMCA TRQs would enter Canada duty free, while U.S. exports above the TRQ quantities would be subject to the existing higher over-quota tariffs. Likewise, the United States would establish TRQs for imports of Canadian dairy products. In total, under USMCA Canada would grant the United States duty-free access to nearly 17,000 metric tons (MT) of dairy products the first year of the agreement, 100,000 MT in the sixth year, and 109,000 MT in year 19. The USMCA quota is specific to the United States and would be in addition to the 93,648 MT of WTO global quota, which is available under NAFTA to exports from the United States as well as to exports from other WTO member countries. For more information, see CRS In Focus IF11149, Dairy Provisions in USMCA . In Canada, the authority to import and distribute alcohol rests with the provincial governments. Starting in 2015, British Columbia (BC) initiated a series of policies and regulations that provide BC wine exclusive access to retail channels and grocery store shelves, while imported wine maybe sold in grocery stores only through a "store within a store" physically separated from the main retail outlet and with separate cash registers. Overall, the U.S.-based Wine Institute reports that Canada is the leading export market for California wine—the leading wine producing state in the United States—accounting for $444 million in sales in 2017. Status: In January 2017, the Obama Administration initiated trade enforcement action against Canada at the WTO regarding Canada's BC wine measures. Subsequent actions by the Trump Administration, in September 2017, led to the United States requesting formal consultations with Canada regarding BC wine measures. USTR states that "discriminatory regulations implemented by British Columbia are unfairly keeping U.S. wine off of grocery store shelves" and that the measures are inconsistent with Canada's commitments and obligations under the WTO. The Canadian wine industry estimates that wine imports account for nearly 70% of the Canadian wine market. It also points out that the BC Vintners Quality Alliance has been issuing store licenses for the industry since the 1980s. The United States reiterated its concerns as part of a second complaint issued in this case in July 2018. Argentina, Australia, New Zealand, and the EU have requested to join the consultation. The proposed USMCA addresses U.S. concerns about Canada's BC wine measures as part of a side letter to the proposed agreement. As outlined in the side letter, Canada would modify certain measures that provide preferential grocery store shelf space to wines produced within the province and "implement any changes no later than November 1, 2019." The proposed USMCA does not address all the issues that restrict U.S. agricultural exports to Mexico and Canada, nor does it include all of the changes sought by U.S. agricultural interest groups. For instance, Southeastern U.S. produce growers have been seeking changes to trade remedy laws to address imports of seasonal produce. Mexico's production of some fruits and vegetables—tomatoes, peppers, cucumbers, berries, and melons—has increased in recent years in part due to Mexico's investment in large-scale greenhouse production facilities and other types of technological innovations. Greenhouse production in Mexico continues to rise, with 2018 estimates of nearly 57,500 acres of produce grown under protection, up from an estimated 9,000 acres in 2017. USDA researchers reported that Mexico is the largest foreign supplier of U.S. imports of vegetables and fruits (excluding bananas). Representatives of the Florida Fruit and Vegetable Association (FFVA) claim that Mexico's investment in produce production is supported by government subsidies and should be addressed through countervailing duties (CVD) on U.S. imports of these products. They further state that these exports enter the United States at prices below the cost of production and should be countered by higher antidumping (AD) duties. FFVA also believes that Mexico's labor cost advantage in fruit and vegetable production gives Mexico a competitive advantage over U.S. produce growers. In general, trade concerns have centered on tomatoes, peppers, and berries. One of the Trump Administration's initial agriculture-related objectives in the renegotiation of NAFTA included a proposal to establish new rules for seasonal and perishable products, such as fruits and vegetables. The proposal would have established a separate domestic industry provision for perishable and seasonal products in AD and CVD proceedings, making it easier for a group of regional producers to initiate an injury case and to prove injury, thereby implementing CVD or AD duties to be levied on the imported products responsible for the injury. This could protect certain U.S. seasonal fruit and vegetable products in some regions by making it easier to initiate trade remedy cases. USITC has previously reviewed trade remedy cases involving perishable agricultural products that have proven difficult to settle. Some Members of Congress supported including seasonal protections as part of NAFTA's renegotiation. Others opposed including such protections, contending that seasonal production complements rather than competes with U.S. growing seasons, while still others worried it could open the door to an "uncontrolled proliferation of regional, seasonal, perishable remedies against U.S. exports." Most U.S. food and agricultural sectors, including some fruit and vegetable producer groups, opposed including seasonal protections as part of the renegotiation. Some worried that efforts to push for seasonal protections would derail the renegotiation. Others claimed that such efforts would favor a few "politically-connected, wealthy agribusiness firms from Florida" at the expense of others in the U.S. produce industry and at the expense of both consumers and growers in other fruit and vegetable producing states, such as California. The Agricultural Technical Advisory Committee for Trade in Fruits and Vegetables (F&V ATAC) supported not including provisions in the NAFTA renegotiation, acknowledging that including such protections would generate "significant opposition from Mexican and Canadian negotiators, in addition to raising concern by many in the U.S. agricultural community, including many in the fruit and vegetable industry." In January 2018, F&V ATAC passed a resolution supporting the withdrawal of the seasonal and perishable trade remedy proposal from the U.S. negotiating objectives. Status: The proposed USMCA that might replace NAFTA does not include changes to U.S. trade remedy laws to address seasonal produce trade. As a result, some in Congress have taken additional steps to try to address this issue. Bills were introduced in both the House and Senate in the 115 th Congress as part of the Agricultural Trade Improvement Act of 2018 ( S. 3510 ; H.R. 7015 ). These bills would have provided for CVD and AD procedures for seasonal producers and defined core seasonal industry in U.S. trade remedy laws, among other changes. These two bills were reintroduced in the 116 th Congress but renamed "Defending Domestic Produce Production Act of 2019" ( S. 16 ; H.R. 101 ). Current law generally requires that an injury case be supported by at least 50% of the domestic industry. The House and Senate bills would allow regional groups representing less than 50% of nationwide seasonal growers to initiate an injury investigation. Such changes could make it easier for a group of regional producers to initiate trade remedy cases. The U.S.-Mexico Tomato Suspension Agreement is an agreement between DOC and signatory producers/exporters of fresh tomatoes grown in Mexico that suspends the U.S. AD investigation into whether Mexican fresh tomatoes were sold into the U.S. market at less than fair value. Fresh tomatoes imported from Mexico have been governed by suspension agreements since 1996. The first suspension agreement on fresh tomatoes from Mexico became effective in November 1996. The Mexican signatory growers and the United States entered into new agreements in 2002 and 2008. The most recent agreement became effective in March 2013. Under the current agreement, the signatories agree to suspend the AD investigation and monitor compliance with the agreement. The basis for the suspension agreement was a commitment by each signatory producer/exporter to sell tomatoes at or above the stated reference price in order to eliminate the injurious effects of exports of fresh tomatoes to the United States. Analysis commissioned by the Fresh Produce Association of the Americas (FPAA) found that terminating the agreement could "reduce the supply of tomatoes in the US market, and raise prices paid by consumers in the U.S., particularly during the winter tomato season (October-June)." The agreement sets different floor prices for Mexican fresh tomatoes during the summer and winter and specifies prices for open field/adapted-environment and controlled-environment production. These price floors cover all types of fresh or chilled tomatoes from Mexico, including common round, cherry, grape, plum, pear, and greenhouse tomatoes. The agreement does not cover tomatoes that are for processing. In early 2018, DOC initiated consultations with the Mexican tomato growers and exporters to negotiate possible revisions to the 2013 agreement. In addition, DOC initiated its five-year sunset review of the suspended AD investigation and published the preliminary and final results of its analysis in late 2018. DOC's analysis indicated that dumping of fresh tomatoes was likely to occur or recur and calculated weighted-average dumping margins of up to 188%. In November 2018, the Florida Tomato Exchange requested that the United States withdraw from the suspension agreement, eliminate the reference prices, and resume the related initial 1996 AD investigation. Several Members of Congress in both the House and the Senate have expressed support for withdrawing from the suspension agreement. Among the groups that oppose withdrawal are the FPAA and other groups representing Mexican growers and exporters as well as businesses, various associations, and local and county governments. Status: On May 7, 2019, the United States terminated the 2013 Suspension Agreement on Fresh Tomatoes from Mexico but said it plans to continue negotiations regarding a possible revised agreement. DOC initially announced its intention to withdraw from the agreement in February 2019 following its periodic review of the agreement, which concluded that Mexican fresh tomatoes have been sold into the U.S. market at less than fair value. Without a suspension agreement, an AD order could be issued if USITC makes a determination of financial injury to U.S. growers. Reportedly, the DOC and Mexico have been unable to develop a revised agreement that is acceptable to both sides, despite ongoing negotiations since early 2018. In April 2019, Mexico's tomato growers proposed to eliminate a price distinction between winter and summer season tomatoes and increase the reference price for USDA-certified organic tomatoes. The government of Mexico has expressed its disappointment about the U.S. decision. In December 2014, DOC signed suspension agreements with the government of Mexico and Mexican sugar producers and exporters that prevented the imposition of CVD and AD on U.S. imports of Mexican sugar. This was a consequence of U.S. government determinations that Mexican sugar was being subsidized by the government of Mexico and was being sold into the U.S. market at less than fair value. The suspension agreements limit Mexico's sugar exports to the United States to the residual of U.S. needs for domestic human use in a given marketing year after subtracting U.S. production and imports from other countries. The agreements establish minimum reference prices for Mexican sugar that are above U.S. sugar program loan levels for domestically produced sugar. Another provision limits the share of Mexican sugar that can enter the United States as refined sugar. After the suspension agreements took effect, a number of stakeholders in the U.S. sugar market asserted that the suspension agreements had not worked as intended and had not entirely eliminated the injury caused by the subsidization and dumping of Mexican sugar. One widely held criticism was that cane refiners who were dependent on imports of raw cane from Mexico had received an inadequate share of sugar from Mexico. Another criticism leveled at the agreements was that Mexican exporters were not always adhering to limits on the share of Mexican sugar imports that are refined sugar as compared with raw sugar nor to the specified minimum reference prices. In November 2016, the American Sugar Coalition—representing sugar cane and sugar beet producers and sugar processors, refiners, and workers—called on DOC to withdraw from the agreements, an action that could have caused AD and CVD duties to be imposed on Mexican sugar. Imperial Sugar Company, a U.S. cane refiner, also advocated for withdrawal. The Sweetener Users Association, which represents sugar-using businesses, recommended renegotiating the agreements to address their shortcomings and warned that terminating them would virtually eliminate Mexican sugar from the U.S. market. In November 2016, DOC issued results of a preliminary administrative review. In it, the DOC concluded that the agreements may not have entirely redressed the injury, and that certain import transactions may not have adhered to the terms in the agreements. Status: In June 2017, the United States and Mexico agreed to amendments to the suspension agreements. Under the amendments, effective October 1, 2017, the price of imported Mexican raw sugar was increased from $0.2225 per pound to $0.23 per pound. The price of imported refined sugar was increased from $0.26 per pound to $0.28 per pound. The maximum share of refined sugar imports was limited to 30%, with raw sugar imports constituting at least 70% of the total, compared with 53% and 47%, respectively, under the 2014 agreement. The agreement also requires that imported raw sugar be loaded in bulk and free flowing—that is, not packaged. Any raw sugar imports that are packaged would be counted toward the refined sugar allotment. In addition, if USDA determines that the United States requires additional sugar imports to meet its needs, Mexico would be awarded the first opportunity to fill the need. For more information, see CRS In Focus IF10693, Amended Sugar Agreements Recast U.S.-Mexico Trade . Several other trade issues may be of interest to Congress. A key objective of U.S. trade negotiations has been to establish a common framework for approval, trade, and marketing of the products of agricultural biotechnology. Among other high-profile issues, geographical indications are increasingly becoming an agricultural trade issue. In addition, U.S. farm and food interests continue to see potential market expansion opportunities in Cuba, but interested exporters regard a prohibition on private U.S. financing as a major obstacle to this end. On the import side of the trade ledger, in March 2019, the United States initiated its review of the Generalized System of Preference (GSP), which provides duty-free tariff treatment for certain products imported from developing countries. Agricultural biotechnology refers primarily to the commercial use of recombinant DNA techniques to genetically modify or bioengineer plants and animals so that they have certain desired characteristics, primarily herbicide tolerance and pest resistance. More recently, the term has also come to encompass a range of new genetic technologies involving genomic editing (e.g., CRISPR-Cas9) rather than recombinant DNA techniques alone. U.S. soybean, corn, cotton, and sugar beet producers have rapidly adopted genetically engineered (GE) varieties of these crops since commercialization began in the mid-1990s. The United States is the leading country in cultivating GE crops, accounting for more than 40% of total acres growing GE crops worldwide. Elsewhere in the world, the adoption and cultivation of GE crops by both producers and consumers has been mixed. In the EU, for example, the European Commission (EC) may approve of GE products for import and marketing, but individual member states may maintain bans. GE crop production in the EU accounts for about 1% of crop acreage—about 325,000 acres—all in a single variety of pest-resistant GE corn: MON810. This particular variety is cultivated predominantly in Spain and Portugal. Eighteen EU member states ban cultivation of GE crops and/or have specific rules on the trade of GE seeds. EU officials have been cautious in permitting GE products to be cultivated within the EU, but EU-approved varieties of GE commodities can be imported. All GE-derived food and feed imported to the EU must be labeled as such. The EU's regulatory framework regarding biotechnology is generally regarded as one of the most stringent worldwide. Many U.S. producers assert that EU labeling and traceability regulations for approving GE crops have effectively limited certain U.S. agricultural exports to the EU. The EU's approval process for GE products—effectively a de facto moratorium since 1998—has been a source of dispute since 2003 and continues to be a contentious issue in the current U.S.-EU agricultural trade negotiations. While the EU as a policymaking entity generally supports GE production, public opinion remains strongly opposed to GE food and crops in most EU member states. This opposition in the EU has also been an important factor in the acceptance of GE crops in lesser developed countries. Most African countries have largely followed the EU in restricting or banning the cultivation of GE crops. The U.S. Secretary of Agriculture stated that the United States will not regulate plants created through genomic editing so long as they are developed without using a plant pest as the donor or vector and are not plant pests themselves. In contrast, the EU Court of Justice ruled that organisms obtained by mutagenesis are genetically modified organisms (GMOs) and are in principle within the scope of the GMO Directive, which governs the deliberate release of GMOs into the environment. The EU Court considers that the risks posed by new mutagenesis techniques such as gene editing (CRISPR-Cas9) to be similar to crops created from transgenesis, wherein GE crops have genetic material introduced from other organisms. China's reluctance to approve GE crops or GE imports is a source of frustration for U.S. agricultural interests. While GE crops are technically banned from China, U.S.-developed GMOs appear to be grown in China without authorization despite Chinese laws banning their cultivation. In September 2016, China agreed to improve its agricultural biotechnology approval process. That commitment did not include specific details, although China stated that they are committed to review eight long-pending applications of agricultural biotechnology in a "timely, ongoing, and science-based manner." On January 8, 2019, the Chinese Ministry of Agriculture and Rural Affairs announced approval of five new biotech traits in imported crops for processing, the first new approvals since June 2017. At the same time, the ministry amended the regulations on safety assessment, import approval, and labeling of agricultural GMOs without notifying the changes to the WTO nor soliciting comments from stakeholders. With respect to the proposed USMCA, the agreement specifically includes provisions to improve transparency in approving and bringing to market products of agricultural biotechnology, something NAFTA did not cover. USMCA provisions cover crops produced with all biotechnology methods, including recombinant DNA and gene editing. Trade negotiations concerning agricultural biotechnology also involve labeling issues and other provisions that address the unintended presence of GE products in non-GE shipments. As the United States implements its new "bioengineered food disclosure" standard, it may raise concerns among some trading partners—particularly the EU. The food disclosure standard, for example, will not mandate labeling of highly refined ingredients from any GE crop if "no modified genetic material" is detectable. This provision would exclude food products, for example, containing high-fructose corn syrup, refined soybean oil, and sugar from sugar beets. Status: A key objective of U.S. trade negotiations, such as the U.S.-EU agricultural trade negotiations and U.S. negotiations with China, has been to establish a common framework for GE approvals. This includes labeling practices consistent with the U.S. guidelines and harmonized regulatory procedures concerning GE presence in products that are consistent with the Codex Alimentarius Commission Annex on Food Safety Assessment in Situations of Low-Level Presence of Recombinant-DNA Plant Material in Food . The proposed USMCA specifically includes provisions to improve transparency in approving and bringing to market products of agricultural biotechnology. For other negotiations, U.S. objectives on agricultural biotechnology, for the most part, remain aspirational. Additionally, the United States believes that U.S. export opportunities are being impaired due to EU pressure on lesser developed countries to adopt EU SPS measures that ban GE products. GIs are geographical names that act to protect the quality and reputation of a distinctive product originating in a certain region. The term GI is most often applied to wines, spirits, and agricultural products. Some food producers benefit from the use of GIs by giving certain foods recognition for their distinctiveness, thereby differentiating them in the marketplace. In this manner, GIs can be commercially valuable. GIs may also be eligible for relief from acts of infringement or unfair competition. While the use of GIs may protect consumers from deceptive or misleading labels, they also have the potential to impair trade when the use of names that are considered common or generic in one market are protected in another. Examples of registered or established GIs include Parmigiano Reggiano cheese and Prosciutto di Parma ham from the Parma region of Italy, Toscano olive oil from the Tuscany region of Italy, Roquefort cheese from France, Champagne from the region of the same name in France, Irish whiskey, Darjeeling tea, Florida oranges, Idaho potatoes, Vidalia onions, Washington State apples, and Napa Valley wines. GIs—along with other types of intellectual property such as patents, copyrights, trademarks, and trade secrets—are an example of intellectual property rights (IPR). The use of GIs has become a contentious international trade issue, particularly for U.S. wine, cheese, and sausage makers. In general, some consider GIs to be protected intellectual property, while others consider them to be generic or semi-generic terms. For example, in the United States, feta is considered the generic name for a type of cheese. However, it is protected as a GI in Europe. As such, feta cheese produced in the United States may not be exported for sale in the EU, since only feta produced in countries or regions currently holding GI registrations may be sold commercially. Laws and regulations governing GIs differ markedly between the United States and EU, which further complicates this issue. In addition, registered products often fall under GI protections in certain third-country markets, and some EU GIs have been trademarked in some non-EU countries. This has become a concern for U.S. agricultural exporters following a series of recently concluded trade agreements among the EU and Canada, Japan, South Korea, South Africa, and other countries that in many cases are also trading partners of the United States. As a result, Canada has agreed to recognize a list of 143 EU GIs in Canada, and Japan has agreed to recognize 71 EU GIs in Japan. More than 4,500 product names are registered and protected in the EU for foods, wine, and spirits originating in both EU member states and other countries. The EU's GI program remains a contentious issue for many in the U.S. Congress, particularly among Members with dairy constituencies. Some have long expressed their concerns about EU protections for GIs, which they claim are being misused to create market and trade barriers. A 2019 study commissioned by the U.S. dairy industry forecasts declining U.S. cheese exports due to expanding restrictions on the use of generic terms such as parmesan, asiago, and feta cheese. However, some U.S. agricultural industry groups are trying to create a system similar to the EU GI system for U.S. products to promote certain distinctive American agricultural products as part of the American Origin Products Association, which represents certain U.S. potato, maple syrup, ginseng, coffee, and chile pepper producers and certain U.S. winemakers, among other regional producer groups, and seeks to work with federal authorities to "create of a list of qualified U.S. distinctive product names, which correspond to the GI definition." Status: GIs are included among other IPR issues in the current U.S. trade agenda. The proposed USMCA protects common names and limits the ability to register new GIs that some producers regard as common (generic) names. USMCA includes a side letter between the U.S. and Mexico regarding the use of 33 cheese names. GIs have been an active area of debate between the United States and EU in previous trade negotiations. GIs continue to be a trade issue for USTR, and the United States is working "to advance U.S. market access interests in foreign markets and to ensure that GI-related trade initiatives of the EU, its Member States, like-minded countries, and international organizations, do not undercut such market access," stating that the EU's GI agenda "significantly undermines the scope of trademarks and other [intellectual property] rights held by U.S. producers and imposes barriers on market access for American-made goods that rely on the use of common names." Previously, USDA officials have indicated that the United States would likely not agree to EU demands to reserve certain food names for EU producers and have expressed concerns about the EU's system of protections for GIs. GIs are also included in the United States' IPR negotiating objectives for the U.S.-EU and U.S.-Japan trade negotiations. The U.S. embargo on trade and financial transactions with Cuba dates from 1962. The sanctions on Cuba were partially eased in 2000 with regard to U.S. exports of agricultural products with the enactment of the Trade Sanctions Reform and Export Enhancement Act of 2000 ( P.L. 106-387 ). The law allows for one-year export licenses for selling agricultural commodities to Cuba but without the availability of U.S. government assistance, foreign assistance, export assistance, credits, or credit guarantees to finance the trade. The law also denies exporters of agricultural goods access to U.S. private commercial financing or credit, although U.S. private export financing is permitted for all other authorized export trade to Cuba. Moreover, all agricultural product transactions must be conducted on a cash-in-advance basis or with financing from third countries. Cuba received almost $5.7 billion, in nominal dollars, in U.S. agricultural products from FY2001 to FY2018. U.S agricultural exports to Cuba peaked in FY2008, reaching $658 million. Major exports during the earlier years included poultry, corn, soybeans, wheat, rice, and feed and fodder products including soybean meal and distillers grains. Since FY2008, U.S. agricultural exports to Cuba declined partly due to negligible exports of rice, wheat, cotton, beef, pork, and distillers grains. Shipments of U.S. farm products to Cuba amounted to $230 million in FY2018, down from $266 million in FY2017. A USDA attaché report on Cuba contends that the decline in U.S. market share in Cuba "is largely attributable to a decrease in bulk commodity exports from the United States in light of favorable credit terms offered by key competitors." The same report concluded that lifting U.S. restrictions on travel and capital flow to Cuba, and enabling USDA to conduct market development and credit guarantee programs in Cuba, would help the United States recapture its market share in Cuba. A 2016 USITC report noted that Cuba imports 70%-80% of its food needs, which amount to some $2 billion per year. Given the price competitiveness and logistical advantages of key U.S. agricultural products compared with export competitors, ITC indicated that U.S. agricultural exports could expand significantly—to about $800 million within five years—if the remaining U.S. restrictions on trade with Cuba were removed. The report identified corn, wheat, rice, and dairy products (particularly milk powder) as the commodities that could see the greatest dollar increase in exports over the near term. The same report observed that U.S. agricultural suppliers view prohibitions on providing credit on food and agricultural product sales and U.S. restrictions on travel to Cuba as key obstacles to increasing U.S. farm exports to the island nation. USDA also maintains that Cuba would likely develop comparative advantages in the production and export of certain citrus and tropical fruit, vegetables, tropical plants, and cut flowers. Some agricultural interests in Florida have expressed concern about potentially subsidized competition from Cuba and exposing U.S. agriculture to invasive pests and diseases. Sugar trade could be an area that would require negotiations. The United States is a major sugar importer, and Cuba is a sugar exporter. Should the embargo be further eased, Cuba may wish to export sugar to the United States. The United States tightly manages sugar imports, so any access for Cuba to export sugar to the U.S. market would have to be negotiated. Status: In December 2014, President Obama announced a major shift away from a sanctions-based policy with Cuba toward a policy of engagement. President Obama acknowledged that he did not have the authority to lift the embargo because it is codified into Section 102(h) of the Cuban Liberty and Democratic Solidarity Act of 1996, P.L. 104-114 . Removing the overall economic embargo would require amending or repealing that law as well as other statutes—such as the Cuban Democracy Act of 1992 (Title XVII of P.L. 102-484 ) and the Trade Sanctions Reform and Export Enhancement Act ( P.L. 106-387 )—that include provisions impeding normal economic relations with Cuba. In 2017, the Trump Administration introduced new sanctions and partially rolled back some of the Obama Administration's efforts to normalize relations, including adding restrictions on transactions with companies controlled by the Cuban military and the elimination of individual people-to-people travel. On March 4, 2019, the Administration allowed lawsuits to go forward against some 200 Cuban entities operated by the Cuban military, intelligence, or security services for trafficking in confiscated property. Amid this policy shift toward Cuba, the 2018 farm bill ( P.L. 115-334 ) permits funding to be used to operate two U.S. agricultural export promotion programs in Cuba—the Market Access Program and the Foreign Market Development Cooperator Program. For more on U.S. agricultural trade with Cuba, see CRS Report R44119, U.S. Agricultural Trade with Cuba: Current Limitations and Future Prospects . For information on U.S. policy toward Cuba, see CRS Report R44822, Cuba: U.S. Policy in the 115th Congress and CRS In Focus IF10045, Cuba: U.S. Policy Overview . The GSP provides duty-free tariff treatment for certain products from designated developing countries. U.S. agricultural imports under GSP totaled $2.4 billion in 2018, accounting for about 15% of the value of total U.S. GSP imports. Leading agricultural imports (based on value) include processed foods and food processing inputs, beverages and drinking waters, processed and fresh fruits and vegetables, sugar and sugar confectionery, olive oil, fresh fruits, and miscellaneous food preparations and inputs for further processing. In 2018, the six leading GSP countries—Thailand, India, Turkey, Indonesia, Brazil, and Argentina—accounted for nearly 70% of all GSP-eligible U.S. agricultural imports. In recent years, a debate has emerged over the limits of eligibility for GSP treatment. Over the past decade, GSP has been extended through a series of short-term extensions—most recently until December 31, 2020 ( P.L. 115-141 ). This latest extension made certain technical modifications related to GSP imports and required USTR to submit an annual report to Congress on its efforts to ensure that GSP countries are meeting the eligibility criteria for the program. Members of Congress have expressed a range of views on whether to include emerging market developing countries (e.g., India, Brazil) as GSP beneficiaries or limit the program to least-developed countries. Some GSP beneficiary countries have become ineligible to participate in the U.S. program. For example, in 2014, Russia's GSP status was terminated, and in 2017, Seychelles, Uruguay, and Venezuela were graduated out of the program because it was determined they had become "high income" countries. Argentina's GSP eligibility was suspended in 2012 but was reinstated in 2017. In early 2018, USTR initiated a series of actions regarding GSP as part of its ongoing review of specific country practices. USTR's review is in response to concerns about the countries' compliance under the program but is also part of its GSP country eligibility assessment and petition process. Some of the countries subject to USTR's review are actively exporting to the United States under GSP, including India, Indonesia, and Turkey. Combined, these three countries accounted for an estimated $800 million in 2018, or about one-third of the value of all GSP-eligible agricultural imports to the United States. The interagency Trade Policy Staff Committee, chaired by USTR, reviews and revises the lists of eligible products annually, generally on the basis of petitions received from beneficiary countries or interested parties requesting that additional products be added or removed. When a country's petition for product eligibility is approved, the product becomes GSP-eligible for all GSP-beneficiary developing countries (or only for least developed countries if so designated). Based on previous reviews, opinions within the U.S. agricultural industry are often mixed, reflecting both support for and opposition to the current program. Status: USTR initiated its current annual GSP product and country review in March 2019 and announced its intention to terminate GSP designations for Turkey and India "because they no longer comply with the statutory eligibility criteria." Press reports suggest that continued U.S. GSP eligibility is a top priority for India, while other reports suggest that Turkey views U.S. GSP review standards as being in violation of WTO rules. Action by USTR to terminate GSP designations for Turkey and India could increase trade tensions between the United States and these two trading partners, potentially affecting future trade relations and U.S. agricultural exports. Some in Congress have expressed opposition to the Administration's stated intent to terminate India's designation as a GSP beneficiary. A survey of companies conducted by the Coalition for GSP suggests that terminating India's and Turkey's GSP beneficiary status could adversely affect U.S. businesses, including some food and agricultural companies, through higher tariffs for some imported products and ingredients. The EU has historically been one of the top U.S. agricultural export markets, currently ranking as the fourth-largest buyer of U.S. agricultural products. U.S. agricultural exports to the EU totaled $12.7 billion in FY2018 and for FY2019 is forecast to reach $13.4 billion. Tree nuts, soybeans, and alcoholic beverages are among the top U.S. exports to the EU based on value. The EU is also a major supplier of U.S. agricultural products. The United States imported $23.7 billion worth of agricultural products in FY2018, and USDA forecasts imports of $24 billion in FY2019. Processed agricultural products such as wine and beer, essential oils, cheese, and other consumer-oriented food products are the top U.S. purchases from the EU. Based on the value of agricultural trade, the U.S. agricultural trade deficit with the EU was $11 billion in FY2018 and is projected to be $10.6 billion in FY2019. The United States and the EU are the world's largest mutual trade and investment partners. Although this trading relationship is largely harmonious, the EU was among those U.S. trading partners that placed retaliatory tariffs on some U.S. products in response to Section 232 tariffs imposed by the Trump Administration on U.S. imports of steel and aluminum. Effective in June 2018, the EU imposed tariffs of 25% on U.S. exports of prepared vegetables and legumes, grains, fruit juice, peanut butter, and whiskey, among other products. These tariffs affect about $1 billion in U.S. agricultural exports to the EU, or about 8% of total U.S.-EU agricultural trade in recent years. In July 2018, the Trump Administration and the EC issued a joint statement announcing that they were forming an executive working group that will seek to reduce transatlantic barriers to trade, including eliminating non-auto industrial tariffs and non-tariff barriers. In October 2018, USTR officially notified Congress of the Administration's intention to start negotiations. The WTO reports that the simple average WTO MFN tariff applied to agricultural products entering the United States was 5.1% in 2014, compared to an average of 12.2% for products entering the EU. Including all products imported under an applied tariff or a TRQ, USDA reports that the calculated average rate across all U.S. agricultural imports is roughly 12%, well below the EU's average of 30%. Restrictive TRQs on EU imports of agricultural products are an issue for U.S. exporters. In 2013, the Obama Administration engaged in negotiations with the EU as part of the Transatlantic Trade and Investment Partnership (T-TIP) with the goal of concluding a "comprehensive and high standard" agreement within two years. T-TIP's last negotiating round was in October 2016, and negotiations were largely paused for both sides to evaluate progress. Underlying regulatory and administrative differences between the United States and the EU on issues of food safety, public health, and IPR for some types of agricultural products have been areas of contention in these negotiations. The United States and the EU have engaged in a series of long-standing disputes involving agricultural products and certain SPS standards. These include, for example, delays in reviews of biotech products (limiting U.S. exports of grain and oilseed products), prohibitions on growth hormones in beef production and certain antimicrobial and pathogen reduction treatments (limiting U.S. meat and poultry exports), and complex certification requirements (limiting U.S. exports of processed foods, animal products, and dairy products). Other EU regulations of concern to U.S. exporters include the arguable lack of a science-based focus in establishing SPS measures, difficulty meeting food safety standards and securing product certification, the perceived lack of cohesive labeling requirements, and stringent testing requirements that appear to be implemented often inconsistently among EU member nations. Some U.S. agricultural producers also oppose EU policies on GIs. (See section " Geographical Indications (GIs) .") Status: In January 2019, USTR announced its negotiating objectives for a U.S.-EU trade agreement following a public comment period and a hearing involving several leading U.S. agricultural trade associations. These include agricultural policies—both market access and non-tariff measures such as TRQ administration and other regulatory issues. Among regulatory issues, key U.S. objectives include harmonizing regulatory processes and standards to facilitate trade, including SPS standards, and establishing specific commitments for trade in products developed through agricultural biotechnologies. The U.S. objectives also include addressing GIs by protecting generic terms for common use. U.S. agricultural interests generally support including agriculture as part of the U.S. negotiating objectives for a U.S.-EU trade agreement. Several Members of Congress support this position and are opposed to the EU's decision to exclude agricultural policies in their negotiating mandate. A letter to USTR from a bipartisan group of 114 House Members states that "an agreement with the EU that does not address trade in agriculture would be, in our eyes, unacceptable." Senate Finance Committee Chairman Chuck Grassley has reiterated, "Bipartisan members of the Senate and House … have voiced their objections to a deal without agriculture, making it unlikely that such a deal would pass Congress." The EU, however, has indicated that it is planning for a more limited negotiation that does not include agricultural products and policies. In late January 2019, the EC published a progress report confirming that its joint agenda does not include agriculture, since it "is a sensitivity for the EU side." The EU negotiating mandate states that a key EU goal is "a trade agreement limited to the elimination of tariffs for industrial goods only, excluding agricultural products." Separately, the EU has taken certain measures to avoid escalating agricultural trade tensions with the United States, for example, by increasing imports of U.S. soybeans as a source of biofuels and by proposing to lift a ban on certain pest-resistant American grapes in EU wine production, among other measures. At the same time, the EU has announced that it would retaliate against "unlawful subsidies given" to Boeing by imposing increased tariffs on imports of U.S. food products such as frozen fish, fruits, wine, liquors, and ketchup. In 2018, the United States concluded an injury investigation regarding ripe olives imported from Spain based on complaints from two California-based olive producers. In June 2018, DOC announced its affirmative final determinations in the AD and CVD investigations. In the AD investigation, DOC found that Spanish ripe olives were being sold in the United States at less than fair value and calculated dumping margins ranging from about 17% to 25% on imports of ripe olives from Spain. In the CVD investigation, DOC determined that Spanish ripe olive producers and exporters were subsidized at rates ranging from about 8% to 27%. In July, USITC determined that U.S. producers were materially injured by imports of ripe olives from Spain. Given these determinations, AD and CVD duty orders on U.S. Spanish ripe olive imports were issued and became effective on August 1, 2018. Status: In January 2019, the EU requested WTO dispute consultations with the United States concerning U.S. AD and CVD duties imposed on imported ripe olives from Spain. The EU position is that these measures are inconsistent with the U.S. commitments under the WTO. USTR states that "the EU's case is without merit" and that it intends to "fight it very aggressively." AD/CVD duties levied against ripe olives from Spain have reportedly already cost the Spanish olive industry an estimated $27 million in lost exports. The United States and the EU have engaged in a long-standing trade dispute over the EU's ban on hormone-treated meat. The EU adopted restrictions on livestock production in the early 1980s, limiting the use of natural hormones to therapeutic purposes, banning the use of synthetic hormones, and prohibiting imports of animals and meat from animals that have been administered the hormones. In response, the United States suspended trade concessions with the EU in 1999 by imposing retaliatory tariffs of 100% ad valorem on selected food products from EU countries. Despite an ongoing series of WTO dispute settlement proceedings and decisions, the United States and the EU continue to disagree on a range of legal and procedural issues, as well as the scientific evidence and consensus affirming the safety of hormone-treated beef. Many in the United States perceive EU's action and the use of SPS measures and non-tariff barriers as disguised protectionism intended to unjustifiably restrict and discriminate against product exports from certain countries. In January 2009, USTR announced its intent to make changes to the list of EU products subject to increased tariffs under the dispute, including changes to the EU countries and products affected, with additional tariffs on some products. The EU claimed that this action constituted an "escalation" of the dispute. In May 2009, following a series of negotiations, the United States and the EU signed a memorandum of understanding that phased in certain changes over the next several years, and the United States suspended its retaliatory tariffs for imported EU products under the dispute. As part of the 2009 memorandum, the EU granted market access to U.S. exports of beef raised without growth promotants as part of its High-Quality Beef (HQB) TRQ. The EU's HQB quota is currently set at 45,000 MT annually and assessed a customs tariff of 20%. However, the HQB quota remains open to other beef exporting nations, which effectively limits the ability for U.S. beef producers to fully benefit under the quota. According to USTR and the U.S. beef industry, most of the HQB quota has been filled by countries other than the United States, and the EU has been unwilling to consider an allocation that would reserve a significant part of the HQB quota for the United States. In December 2016, USTR proposed reinstating retaliatory tariffs on EU products under the dispute. In February 2017, USTR convened a hearing to review this possible retaliatory action. To date, the United States has not imposed retaliatory tariffs connected to the U.S.-EU beef hormone dispute. Status: The EU continues to impose bans and restrictions on meat produced using hormones, beta agonists, and other growth promotants, and it allows only imports of beef produced without hormones subject to the EU's HQB quota. The United States maintains that scientific evidence demonstrates that meat produced using hormones, beta agonists, and other growth promotants is safe for consumers. The United States continues to seek a U.S.-specific allocation of the EU's HQB import quota. In late 2018, the EU agreed to review its existing HQB quota and renegotiate its quota with the United States with the expectation that a revised HQB agreement would be implemented in early 2019. In March 2019, press reports indicated that the U.S. and EU had reached an "agreement in principle" for reallocating the EU's HQB quota, which could provide the United States a share of EU's annual quota. If realized, such an agreement could result in additional market access to the EU for U.S. beef certified as produced without hormones. In January 2009, the United States escalated a long-running dispute with the EU over its refusal to accept imports of U.S. poultry that are subject to certain pathogen reduction treatments (PRTs). PRTs are antimicrobial rinses that have been approved for use by the USDA in poultry production to reduce the amount of microbes on meat. Meat and poultry products processed with PRTs are judged safe by the United States and also by European food safety authorities. However, the EU prohibits the use of PRTs and the importation of poultry treated with these substances. The EU generally opposes such chemical interventions and asserts that its own poultry producers follow much stricter production and processing rules that are more effective in reducing microbiological contamination than simply washing poultry products. In general, EU consumer groups argue that the use of such treatments compensates for poor hygiene in the supply chain. The United States requested WTO consultations with the EU on the matter, a prerequisite first step toward the establishment of a formal WTO dispute settlement panel. A WTO panel was subsequently established in November 2009, but this case has not moved forward. In 2013, USDA submitted an application for the approval of peroxyacetic acid as a PRT for poultry. Although the EU initially put forward a proposal to authorize the PRT, the EU withdrew its proposal in December 2015, citing the European Food Safety Authority's (EFSA) opinion of insufficient evidence of peroxyacetic acid's efficacy against campylobacter. EFSA cleared lactic acid for reducing pathogens on beef carcasses, cuts, and trimmings in 2011. In 2013, the EU lifted its ban on the use of lactic acid in beef PRTs on beef carcasses, half-carcasses, and beef quarters in the slaughterhouse. In 2017, the National Pork Producers Council submitted an application to EFSA to approve organic lactic and acetic acid for use on pork carcasses and cuts. EFSA's panel report, issued in October 2018, concluded that use of the treatments do not pose a safety concern provided that the substances comply with the EU specifications for food additives and that their use is efficacious compared to untreated meat. However, EFSA raised questions about whether lactic and acetic acid were more efficacious than water treatment for certain applications. Status: The United States continues to maintain that PRTs are a "critical tool during meat processing that helps further the safety of products being placed on the market" and continues to seek approval of certain PRTs for beef, pork, and poultry. To date, however, the United States and the EU have not been able to agree on a number of issues related to veterinary equivalency, and the EU continues to prohibit any substance other than water to remove contamination from animal products unless the EU approves the substance. In December 2018, USDA's Animal and Plant Health Inspection Service (APHIS) responded to the WTO notification of a new EU regulation, 2017/625, concerning new requirements for gelatin and collagen entering the EU for human consumption. In FY2018, the U.S. exported over $199 million worth of raw materials to the EU for the production of gelatin and collagen that were intended for human consumption. APHIS and industry trade groups have objected to the EU's new requirement, which would be enforceable as of December 14, 2019. U.S. animal byproduct exports to the EU follow an EU regulation in force since 2011 that provides detailed rules for trade in animal byproducts. The current regulation allows APHIS to make changes to the list of eligible U.S. animal byproduct facilities that are authorized to export to the EU. The new EU regulation would require all U.S. animal byproduct exporters to register their establishments in the EU Trade Control Expert System (TRACES). APHIS contends that the TRACES registration process is cumbersome in that it could take more than a month to add a new facility or to amend an existing approval, creating delays that could potentially impede trade. Currently, the EU recognizes only U.S. meat intended for human consumption overseen by the Food Safety and Inspection Service (FSIS) of USDA as equivalent to EU-produced products. As a result, many FSIS-inspected establishments are already listed in TRACES. However, not all animal byproduct facilities in the United States are overseen by FSIS, and these may not already be listed on TRACES. Some raw materials intended for collagen or gelatin products may have originated from FSIS-inspected establishments, but processed products and animal feeds may be overseen by U.S. Food and Drug Administration or other federal agencies. The new EU proposed regulation would eventually allow many of these facilities to be listed in TRACES. Under the current EU Regulation 142/2011 Chapter 8 Health Certificate, APHIS is the recognized oversight authority for U.S. exports. The EU's proposed 2017 regulation Model Certificate would require that APHIS be present at all times during the loading of animal byproducts into a container. U.S. trade associations have expressed the view that the EU-specific certificate requirements are not consistent with guidance provided by Codex Alimentarius—the international food standards organization that sets guidelines to protect public health and ensure fair practices in the food trade. Instead, they allege that the EU requirements are unnecessarily restrictive and would have "the effect of closing the EU market to the majority of U.S. hides and skins exported for the purposes of edible gelatin and collagen production." Status: In December 2018, APHIS submitted comments to the WTO in response to the proposed EU 2017 draft regulation. APHIS "requests that the EU delay the proposed implementation date to allow for competent authorities [USDA] to adequately prepare for implementation and provide the EU additional time to clarify its requirements." Officials at APHIS await an official response from the EU. In 2018, exports of U.S. livestock and products totaled $29.6 billion, while imports totaled $16.5 billion. Foreign demand for U.S. animals and products supports prices of domestic livestock, poultry, and dairy products, while imports help to meet U.S. consumer demand for a variety of livestock and dairy products. U.S. producers in the livestock sector look to the U.S. government to negotiate market access agreements, monitor international trading policies, and settle trade disputes, including restrictions that certain countries impose on U.S. exports in response to animal disease concerns. In 2019, the USDA forecasts that exports of meat and poultry products will represent about 17% of U.S. domestic production. Periodically, foreign countries impose export bans on U.S. meat products in response to an outbreak of certain animal diseases. The bans are disruptive for livestock producers and meat exporters, are often inconsistent with internationally accepted protocols, and vary in terms of how broadly and how long trading partners apply them. For example, bans were imposed on U.S. beef exports because of the discovery of bovine spongiform encephalopathy (BSE, or mad cow disease) in 2003. An outbreak of highly pathogenic avian influenza (HPAI) at the end of 2014 and early 2015 in U.S. turkey and egg-laying flocks triggered export bans on poultry products by more than 30 countries. The bans on U.S. broiler meat exports were imposed for various periods of time even though the HPAI outbreaks were not in areas in close proximity of commercial broiler production. The World Organization for Animal Health (known as OIE) has established trade protocols when disease outbreaks occur in countries that export meat and poultry products. According to OIE, in most cases total export bans are not recommended or needed when there is a BSE or HPAI discovery or outbreak in exporting countries. In 2013, the OIE determined that the United States is at "negligible risk" for BSE, meaning that U.S. surveillance and safeguard systems are strong. For HPAI, USDA, in collaboration with states, has implemented increased flock biosecurity and has a system in place to rapidly contain and eradicate an outbreak of HPAI. Over the years, while some foreign markets imposed total bans on U.S. beef exports following the 2003 BSE incident, other export markets for U.S. beef imposed specific conditions for imports of U.S. beef. For example, Japan and South Korea—two importers of U.S. beef—require that imported U.S. beef be produced from cattle under 30 months of age. China did not lift its ban on U.S beef exports until 2017 and included an age restriction when it did. Regarding poultry, some foreign markets imposed total bans on poultry exports during the HPAI outbreak, while other markets imposed export bans only from the regions affected by the outbreak, consistent with the recommended OIE protocol. As the United States demonstrated that the outbreak was contained and then eliminated, most of these bans were lifted. Status: China lifted the ban on U.S. beef in 2017 but restricts imports of U.S. beef to cattle under 30 months of age, similar to other countries that maintain age restrictions. The OIE guidelines do not include age restrictions for countries with the "negligible risk" status. China also requires that U.S. exporters of beef to China participate in the USDA Agricultural Marketing Service export verification program, which verifies that U.S. suppliers are meeting importing country requirements. In 2017 and 2018, the U.S. shipped about 10,000 MT of beef to China, representing 0.5% total U.S. beef exports. China continues to ban U.S. exports of poultry meat because of the HPAI outbreak and has been unwilling to accept regionalization—the internationally accepted principle that export bans be applied only to areas affected by an animal disease outbreak. In 2018, the United States and South Korea reached an agreement accepting regionalization in the event of an HPAI outbreak in the United States instead of imposing nationwide bans. Currently, 33 countries are eligible to export meat and poultry to the United States. Before the United States authorizes imports of meat or poultry, APHIS conducts risk assessments of any foreign animal diseases that could pose a threat to U.S. animal health. Also, FSIS must determine if a foreign meat or poultry inspection system provides an "equivalent" level of sanitation and protection of public health as the U.S. system. Foreign governments document how inspection systems are regulated, and FSIS conducts onsite audits of foreign facilities. FSIS also conducts equivalency verification and periodic audits of countries already approved to export meat and poultry to the United States. In August 2013, FSIS confirmed that China's poultry processing inspection system was equivalent to the U.S. poultry inspection system. This determination allowed China to export processed (cooked) poultry meat that is sourced raw from the United States or from countries eligible to export poultry to the United States. In March 2016, FSIS recommended that the process of verifying equivalency for China's poultry slaughter inspection system move forward. In August 2017, FSIS released an audit report confirming that China's poultry processing system remained equivalent. To date, USDA has not issued a final rule on equivalency for China's poultry slaughter system. These actions were the culmination of a process that began in 2005, when China requested that USDA evaluate its poultry inspection system. Congress halted the process in FY2006, when appropriations provisions prohibited FSIS from expending funds to evaluate China's poultry inspection system. The process resumed in FY2010 on the condition that FSIS provide Congress with regular reports on the equivalency process. The possibility that the United States could import poultry meat from China has alarmed some food safety advocates and some Members of Congress because of concerns about relatively lax food safety enforcement in China for both domestically consumed products and exports. Testimony presented during a Congressional-Executive Commission on China hearing highlighted concerns regarding China's food safety. Status: In response to concern about China's record on food safety, Section 749 of Division B of the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), prohibits USDA from using any funds to purchase Chinese raw or processed poultry products for feeding programs, including the school lunch and school breakfast programs. Section 753 of Division B of the FY2019 appropriations act prohibits USDA from finalizing the proposed rule to allow the importation of slaughtered Chinese poultry. In 2017, the United States imported about 500 pounds of processed poultry meat from China but did not import any processed poultry meat in 2018. If Congress were to lift the appropriations prohibition on finalizing the China poultry slaughter rule, China would still be restricted to sending only cooked/processed products because of APHIS restrictions on uncooked/processed products due to the presence of animal diseases in China, such as avian influenza. The United States restricts or prohibits the importation of animals or animal products (including meat) from countries where highly infectious animal diseases exist in order to protect U.S. herds. Fresh beef imports from Brazil and Argentina have been prohibited or restricted because of foot-and-mouth disease (FMD) in the two countries. U.S. beef imports from Brazil and Argentina have mostly been limited to fully cooked/processed product. Argentina was approved to export fresh beef to the United States from 1997 to 2001,\ until the United States halted exports after an Argentine FMD outbreak in 2001. In December 2013, APHIS proposed a rule that would allow fresh beef imports from 13 regions in Brazil. In August 2014, APHIS proposed a separate rule to allow fresh beef imports from Patagonia and northern Argentina. In July 2015, APHIS released final rules to allow the import of fresh beef from these regions of Brazil and Argentina. USDA risk assessments determined that, under certain circumstances, fresh beef could be safely imported from Brazil and Argentina without threatening the FMD-free status of the United States. Some livestock industry stakeholders, such as the National Cattlemen's Beef Association and the National Farmers Union, have expressed opposition to allowing fresh beef from Brazil and Argentina because neither country is considered to be free of FMD. FMD was eradicated in the United States in 1929, and any introduction of the disease back into the United States could be economically devastating for the livestock industry. In 2013, the Department of Homeland Security estimated that the cost of an FMD outbreak in the United States could exceed $50 billion. In May 2015, FSIS found that Brazil's beef inspection system would provide an equivalent level of food safety as the U.S. system. In August 2016, USDA announced that Brazil was approved to ship fresh beef to the United States, and the first shipments arrived the following month. In June 2017, USDA suspended imports of fresh beef from Brazil after FSIS found problems with re-inspected Brazilian beef at the U.S. port of entry. According to USDA, FSIS was re-inspecting 100% of Brazilian fresh beef imports and refused entry to 11% of shipments, well above the 1% refusal rate for other beef imports. In November 2018, FSIS announced that the Argentine beef inspection system was equivalent, and the country could export fresh beef to the United States again. FSIS also announced that within six months of the November 2018 equivalency determination, the agency would undertake additional onsite audits of Argentina's raw beef inspection system. Status : The United States continues to suspend its approval of fresh beef imports from Brazil. The United States imported about 10,000 MT of fresh Brazilian beef since September 2016, when U.S. imports began, until shipments were suspended in June 2017. In a step to allow U.S. beef imports from Brazil to resume, President Trump and President Bolsonaro of Brazil issued a joint statement during President Bolsonaro's March 2019 visit in which the United States agreed to "expeditiously schedule" an audit of Brazil's beef inspection system once FSIS is "satisfied with Brazil's food safety documentation." The United States imported nearly 1,100 pounds of fresh beef from Argentina in December 2018. Argentina holds a 20,000 MT ton duty-free TRQ allotment for beef shipments to the United States. Ractopamine, an animal drug that increases animal weight gain and meat yield, is approved by FDA for use in U.S. cattle, hog, and turkey production. It is also approved for use in countries such as Canada, Japan, Mexico, and South Korea, but many other countries ban the use of ractopamine in meat production. In 2012, the Codex Alimentarius—the international food standards organization that sets guidelines to protect public health and ensure fair practices in the food trade—set maximum residue levels for ractopamine in beef and pork. However, several of the largest markets for U.S. meat exports have restricted imports of meat produced with ractopamine, despite U.S. adherence to the residue standards established by Codex. The USTR, in its "2019 National Trade Estimate Report on Foreign Trade Barriers," states that the EU, China, Taiwan, and Thailand continue to restrict U.S. meat exports produced with ractopamine. According to FSIS, U.S. meat exports—particularly pork—may be shipped to markets with ractopamine restrictions if the exported product is raised without ractopamine and is certified through USDA's Never Fed Beta Agonists Program. U.S. exports to markets that have ractopamine restrictions are subject to increased certification and testing costs, potentially affecting competitiveness and dampening market opportunities. Status : USDA and the USTR continue to engage with trading partners to encourage them to accept international standards on the use of ractopamine. In March 2009, USDA implemented a final rule to implement country-of-origin labeling (COOL) to provide consumers information on the origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb, chicken, and goat. The rules were required by the 2002 farm bill ( P.L. 107-171 ) as amended by the 2008 farm bill ( P.L. 110-246 ). In 2009, Canada and Mexico challenged U.S. COOL in the WTO, arguing that COOL reduced the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments. In 2011, the WTO found that COOL treated imported livestock less favorably than U.S. livestock and did not provide complete information to consumers on the origin of meat products. The United States appealed the WTO ruling, but the Appellate Body upheld the findings. USDA issued a revised COOL rule in May 2013, which required that production steps—born, raised, and slaughtered, by origin country—be included on meat labels, but in 2014 the WTO found that the revised COOL regulations still violated U.S. WTO obligations by discriminating against imported livestock. In December 2015, the WTO authorized Canada and Mexico to retaliate against $1 billion worth of products imported from the United States. In December 2015, Congress repealed the COOL requirements for beef and pork and ground beef and pork in Section 759 of Division A of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ). USDA then issued a final rule that removed beef and pork from COOL regulations, thus settling the trade dispute. Even so, Canada and Mexico retain their rights granted by the WTO to retaliate if the United States should implement laws or regulations that violate the WTO findings on U.S. COOL for beef and pork. Status : Following the repeal of COOL for beef and pork, several state legislatures—including Wyoming, South Dakota, Montana, and Colorado—have considered bills that would require COOL on meat sold within the state, but thus far none has been enacted. The Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America and the Cattle Producers of Washington sued USDA to restore COOL for beef and pork in June 2017. In June 2018, the district court in eastern Washington ruled in favor of USDA because the plaintiffs had missed "the applicable statute of limitations time period and because the regulations follow Congress's clear intent." In June 2018, the Organization for Competitive Markets and the American Grassfed Association petitioned FSIS to change its "Product of USA" label. The organizations state that foreign meat is imported into the United States, minimally processed, and then sold as "Product of USA" meat. The petition requests that FSIS change its Food Standards and Labeling Policy Book to clarify that the ingredients in a product must be of domestic origin to have a "Product of USA" label. To date, FSIS has not responded to this request. The 164-member WTO oversees and administers multilateral trade rules, serves as a forum for trade liberalization negotiations, and resolves trade disputes through its Dispute Settlement Understanding (DSU). As a signatory member of the WTO, the United States has committed to abide by WTO rules and disciplines, including those that govern domestic farm policy. The WTO's general rules concerning subsidy disciplines, trade behavior, and market access concessions apply to all members. Two developments in 2018 have created some uncertainty about whether the United States will remain in compliance with rules and spending limits for domestic support programs that it has agreed to in the WTO. These developments are farm program changes under both the 2018 farm bill ( P.L. 115-334 ) and a new USDA direct payment program—the MFP—implemented in 2018 under other statutory authorities in response to foreign trade retaliation targeting U.S. agricultural products. The outcome will depend on market conditions, but the potential for non-compliance would be heightened if market prices for major commodity crops were to weaken and lower prices were to generate farm program payments above current USDA projections. In general, the farm program changes enacted in the 2018 farm bill incrementally shift farm safety net outlays away from decoupled programs that do not tie crop support payments to production and toward coupled programs that are potentially more market distorting. This resulted from the addition of a new, albeit temporary, coupled support program (the MFP) and, in the 2018 farm bill, from raising support levels for existing coupled programs and from removing several of the coupled programs from individual farm payment limit requirements. Direct farm support payments may occur under: One of the revenue-support programs authorized by the farm bill—the Market Assistance Loan (MAL), Agricultural Risk Coverage (ARC), Price Loss Coverage (PLC), and Dairy Margin Coverage (DMC) programs; A program authorized by the Secretary of Agriculture using authority under the CCC Charter to make payments in support of U.S. agriculture—two such programs are the Cotton Ginning Cost Share (CGCS) program and the MFP; or One of the four disaster assistance programs—the Livestock Forage Disaster Program (LFP), Livestock Indemnity Program (LIP), Tree Assistance Program (TAP), and Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP). In a change from previous policy, the 2018 farm bill excluded payments made under MAL, LIP, TAP, and ELAP from annual individual payment limits. DMC, like its predecessor—the Margin Protection Program—operates without any farm payment limit. The absence of a limit on benefits received by an individual farmer under these programs represents the potential for unlimited, fully coupled USDA farm support outlays that would count against U.S. domestic support limits agreed to under U.S. WTO commitments. MAL payments are coupled directly to actual production (subject to a producer's participation choice). DMC payments are made on a producer-selected share of a historical production base that is adjusted upward for annual growth in national average milk production. Milk producers must participate in the program to receive the annual base adjustment. Thus DMC payments are treated as coupled. The 2018 farm bill raised support levels for both dairy producers under the DMC and for several program crops under MAL, including barley, corn, grain sorghum, oats, extra-long-staple cotton, rice, soybeans, dry peas, lentils, and small and large chickpeas. Higher support levels increase the potential for higher payments during a market downturn. Such payments count against the market-distorting spending limit. Furthermore, coupled payments can influence producer production choices in favor of those farm activities expected to receive larger support payments. If such payments are noticeably large relative to the commodity's farm value and result in surplus production that moves into international markets, then they could attract the attention of competitor nations. Such spillovers, if measurably harmful to foreign export competitors or producers, could lead to challenges under the WTO's dispute settlement process. Of the direct payment programs, ARC and PLC are partially decoupled from producer behavior: Payments are made to a portion (85%) of historical base acres irrespective of actual plantings. Because of this they are notified as non-product specific and have been excluded from counting against WTO spending limits under a special "de minimis" exclusion, which allows minimum amounts of domestic support even if they are market distorting. Most of the other direct support programs—MAL, DMC, LFP, LIP, TAP, and ELAP—count against the United States' annual market-distorting "amber box" payment limit of $19.1 billion. CGCS and MFP are special cases. The United States has yet to notify spending under either of these programs to the WTO, so their exact WTO spending classification is currently unknown. However, because their payments are coupled directly to specific commodities, they could well be included with other market-distorting payments subject to the spending limit. To the extent that producers expect payments under these programs to recur, they can become market distorting and subject to potential WTO challenge. Secretary Perdue has, however, stated that MFP was a one-time assistance and would not be extended beyond the package announced in July 2018. CGCS outlays were $326 million in 2016 and $216 million in 2018. Actual outlays under MFP are estimated at $5.2 billion in 2018 and $3.5 billion in 2019. The U.S. sugar program does not rely on direct payments from USDA. Instead, USDA provides indirect price support via MAL loans to processors at statutorily fixed prices (which were raised slightly by the 2018 farm bill) while limiting the amount of sugar supplied for food use in the U.S. market. In its 2015 notification of domestic support to the WTO (the most recent notification year), USDA notified the implicit cost of the sugar program at $1.5 billion. The federally subsidized crop insurance program was largely unchanged by the 2018 farm bill. Annual USDA premium subsidies—which have averaged $6.4 billion per year since 2011—count against the U.S. trade-distorting spending limit of $19.1 billion. Payments under U.S. conservation programs are deemed generally non-market distorting and are notified as "green box" payments, which are not subject to any spending limit. Status: Most recent studies suggest that, for U.S. program spending to exceed the $19.1 billion cumulative spending limit, even with the addition of large MFP payments and higher MAL and DMC support levels, a combination of events would have to occur that would broadly depress commodity prices. Perhaps more relevant to U.S. agricultural trade is the concern that, because the United States plays such a prominent role in most international markets for agricultural products, any distortion resulting from U.S. policy would be both visible and potentially vulnerable to challenge under WTO rules. The United States was a major force behind the establishment of the WTO in 1995 and the rules and procedures governing its DSU. The United States has frequently used DSU, often successfully. Since the summer of 2017, the United States has blocked the appointment of new DSU Appellate Body (AB) jurists, which has limited the ability of the system to hear dispute cases. The AB currently has three jurists (the minimum number to hear a case) out of a total of seven positions. In December 2019, the terms of two of the three will expire, potentially leaving the AB unable to function if no new jurists are appointed. Status: Since the inception of the WTO in 1995, the United States has brought to it 46 cases on agriculture. Of these cases, 34 were fully or partially decided in favor of the United States by the WTO panel hearing the case. Most recently, the WTO ruled in favor of the United States against China over Chinese domestic support policies for its agricultural sector and over China's administration of its market access policies. The United States has notified the WTO on a similar domestic support case against India. However, if no new members are appointed to the WTO AB, then pending U.S. cases may be unable to move forward toward a ruling. In September 2016, USTR filed a dispute settlement case (DS511) at the WTO over Chinese domestic support policies for its agricultural sector that USTR alleged were inconsistent with WTO rules and commitments. Furthermore, USTR contended that China's policies had distorted international trade in wheat, rice, and corn and that government support payments were in excess of China's WTO spending limits. In December 2016, USTR requested that WTO establish a dispute settlement panel to examine China's domestic support levels for these crops, a request that was fulfilled in January 2017. In its challenge, USTR contended that the level of support that China provided for rice, wheat, and corn had exceeded—by nearly $100 million from 2012 through 2015—the level to which China had committed to when it joined the WTO. USTR also asserted that China's price support for domestic production had been above the world market prices since 2012, thereby creating an incentive for Chinese farmers to increase production of the subsidized crops, which in turn displaced imports from the United States and elsewhere. When China acceded to the WTO in 2001, some of its domestic support policies—including market price support and certain producer payments and input subsidies linked to production—became subject to an annual spending limit of 8.5% of each product's value based on China's domestic prices. Since all of China's domestic production was potentially eligible for the above-market support prices—and on the assumption that all domestic producers had incorporated the high support levels into their production decisions—USTR stated that the correct measure of total support should be based on the total production of wheat, rice, and corn in the provinces and regions where the support programs operated. However, USTR asserted that China reported the subsidies only on the smaller quantities purchased by the government. USTR also argued that China's fixed external reference price for wheat, rice, and corn should be based on the three-year averages of 1986-1988 world prices, as specified in the WTO Agreement on Agriculture. In contrast, China had used the much higher 1996-1998 prices, which had resulted in smaller price gap calculations. Finally, the United States and China disagreed on whether to measure the level of market price support for milled or unmilled rice and the appropriate conversion factor between the two. Status: On February 28, 2019, the WTO dispute settlement body (DSB) found that China had exceeded its domestic support limits for wheat and rice in each year between 2012 and 2015 and therefore was not in compliance with its WTO commitment. The panel agreed with China's reference price calculations based on 1996-1998 prices because these years had been used in China's WTO accession documentation. The panel disagreed with China's methodology of calculating domestic support taking into consideration only the purchases made by the government. The DSB panel made recommendations for calculation of reference prices and domestic support for China in order to comply with its WTO commitments. The DSB panel did not make a ruling on corn because, following the 2015 harvest, China made changes to its calculations of corn prices that were found to be less market distorting than the method used prior to 2015. If neither the United States nor China appeals the report, the findings and recommendations in the report would be adopted within 60 days of public circulation. China recently stated that it will not appeal the WTO ruling. On December 15, 2016, USTR filed another WTO dispute settlement case (DS517) against China, alleging that China's administration of its TRQs for wheat, rice, and corn are unclear and that China had failed to fill the within-quota commitments, thus undermining U.S. exports. While China announced on an annual basis the opening of TRQs, USTR stated that China's application criteria and procedures were unclear and that China did not provide meaningful information on how it actually administered the TRQs. When China joined the WTO in 2001, it agreed to create TRQs to allow imports of wheat, rice, and corn. Imports within the set quota volume would be levied a lower within-quota tariff rate, while imports beyond the set quota amount would be levied at a higher tariff rate. Under China's WTO commitments, by 2004, the wheat TRQ would reach 9.6 million metric tons, rice 5.4 million metric tons, and corn 7.2 million metric tons. The in-quota tariffs for all three commodities are 1%, while the over-quota tariffs are set at 65%. Despite the low within-quota tariff, China's TRQs for wheat, rice, and corn have never been filled even when imported grains were priced lower and were more competitive than domestic grains. According to prices reported by China's Ministry of Agriculture, during 2014-2016, the import prices were lower by about 30-40% for wheat, 25-35% for rice, and 15-35% for corn. USTR states that China's TRQ administration appears to restrict imports and fails to provide sufficient information to permit the processing of quota application and importation. Status: On September 22, 2017, a WTO DSB panel was established on "China—Tariff Rate Quotas for Certain Agricultural Products" (DS517). On April 18, 2019, the WTO ruled in favor of the United States, stating that "China's administration of its TRQs for wheat, rice and corn were inconsistent with its obligations under the WTO to administer TRQs on a transparent, predictable and fair basis." The WTO recommends that China make changes to make its TRQ administration to conform with its WTO obligations. In May 2018, the United States challenged India's domestic agricultural support notifications at the WTO, charging that India had under-notified spending on its market price support for rice and wheat for the marketing years 2010/11 through 2013/14. The United States alleged that India's market price support for wheat and rice exceeded its allowable levels of trade distorting domestic support under the WTO. In November 2018, the United States also challenged India's domestic support for cotton, stating that it exceeded its allowable level under its WTO commitments. At about the same time, Australia, Brazil, and Guatemala challenged India's level of domestic support for sugar, charging that India had violated its WTO commitment levels. In February 2019, the United States further challenged India stating that it had substantially underreported its market price support for chickpeas, pigeon peas, black matpe (a type of black lentil), mung beans, and lentils. According to USTR, when calculated using the WTO Agreement on Agriculture methodology, India's market price support for each of these pulses has exceeded the allowable levels of trade-distorting domestic support under India's WTO commitments. Status: The United States' challenge to India's domestic support for rice and wheat was raised at the May 2018 WTO Committee on Agriculture (COA) meeting. USTR raised the issue concerning India's cotton price support during the November 2018 COA meeting, and the challenge against India's domestic support for pulses was raised at the February 2019 COA meeting. USTR raised these issues at the COA to alert India and other WTO members that the United States is aware and concerned about India's underreporting of its domestic agricultural subsidies. USTR intends to continue challenging India's domestic support for agriculture at upcoming COA meetings and, if necessary, could pursue these concerns through WTO's dispute settlement mechanism.
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Sales of U.S. agricultural products to foreign markets absorb about one-fifth of U.S. agricultural production, thus contributing significantly to the health of the farm economy. Farm product exports, which totaled $143 billion in FY2018 (see chart below), make up about 9% of total U.S. exports and contribute positively to the U.S. balance of trade. The economic benefits of agricultural exports also extend across rural communities, while overseas farm sales help to buoy a wide array of industries linked to agriculture, including transportation, processing, and farm input suppliers. Congress has traditionally displayed a keen interest in agricultural trade issues given their importance to farmers and ranchers and to the overall economy. A major area of interest for the 116th Congress has been the loss of overseas export market shares for agricultural products due to the direction of the Trump Administration's trade policy, which places increased emphasis on reducing the overall U.S. trade deficit. In March 2018, the Trump Administration imposed Section 232 tariffs on U.S. imports of steel and aluminum from most countries and additional Section 301 tariffs on a number of imports from China. Following these actions, Canada, China, Mexico, the European Union (EU), and Turkey imposed retaliatory tariffs on more than 800 U.S. agricultural and food product exports. In response, USDA authorized $12 billion in short-term assistance to the affected agricultural producers and commodities under its Market Facilitation Program to help mitigate the economic impact on farmers. A number of policy developments undertaken by the Trump Administration in bilateral and regional trade agreements may affect agricultural markets as well. On the Administration's initiative, the North American Free Trade Agreement (NAFTA) has been renegotiated and signed as the U.S.-Mexico-Canada Agreement (USMCA). This agreement is subject to legislative ratification by Canada and Mexico and approval by U.S. Congress. President Trump withdrew the United States from the Trans-Pacific Partnership (TPP) in January 2017. In March 2018, the remaining 11 countries concluded a revised version of TPP, the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP). Signatories of CPTPP have begun to reduce tariffs and provide greater agricultural market access for imports from CPTPP signatory countries, actions that could potentially erode U.S. agricultural market shares in the region. At the bilateral level, the Trump Administration has notified Congress of its intent to begin trade negotiations with Japan (a CPTPP member), the EU, and the United Kingdom. At the global level, and at the initiative of the United States, the World Trade Organization (WTO) recently ruled that China has subsidized its agricultural production beyond the level permitted under its WTO obligations and that China's administration of its agricultural market access policies are inconsistent with its WTO obligations. The United States has also filed a counter notification against India at the WTO stating that India has underreported its agricultural domestic subsidies. Several other agricultural trade issues may be of interest to Congress. For example, the proposed USMCA does not address all the issues that restrict U.S. agricultural exports to Mexico and Canada, and Southeastern U.S. produce growers have been seeking changes to trade remedy laws to address imports of seasonal produce. A key objective of U.S. trade negotiations continues to be the establishment of a common framework for approval, trade, and marketing of the products of agricultural biotechnology. U.S. farm and food interests see the potential for market expansion opportunities in Cuba, but a prohibition on private U.S. financing is generally viewed as a major obstacle to this end. Moreover, the United States has announced its intention to withdraw eligibility for the Generalized System of Preference (GSP)—which provides duty-free tariff treatment for certain products from developing countries—from Turkey and India. On another front, U.S. exports of beef, pork, and chicken continue to face bans and trade restrictions over disease outbreaks even though the bans are inconsistent with international trade protocols, among which are China's ongoing bans on imports of U.S. beef and poultry and restrictions imposed by several foreign markets on U.S. ractopamine-fed pork.
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Banks play a central role in the financial system by connecting borrowers to savers and allocating available funds across the economy. As a result, banking is vital to the U.S. economy's health and growth. Nevertheless, banking is an inherently risky activity involving extending credit and undertaking liabilities. Therefore, banking can generate tremendous societal and economic benefits, but banking panics and failures can create devastating losses. Over time, a regulatory system designed to foster the benefits of banking while limiting risks has developed, and both banks and regulatio n have coevolved as market conditions have changed and different risks have emerged. For these reasons, Congress often considers policies related to the banking industry. The last decade has been a transformative period for banking. The 2007-2009 financial crisis threatened the total collapse of the financial system and the real economy. Many assert only huge and unprecedented government interventions staved off this collapse. Others argue that government interventions were unnecessary or potentially exacerbated the crisis. In addition, many argue the crisis revealed that the financial system was excessively risky and the regulatory regime governing the financial system had serious weaknesses. Policymakers responded to the perceived weaknesses in the pre-crisis financial regulatory regime by implementing numerous changes to financial regulation, including to bank regulation. Most notably, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; P.L. 111-203 ) in 2010 with the intention of strengthening regulation and addressing risks. In addition, U.S. bank regulators have implemented changes under their existing authorities, many of which generally adhere to the Basel III Accords—an international framework for bank regulation agreed to by U.S. and international bank regulators—that called for making certain bank regulations more stringent. In the ensuing years, some observers raised concerns that the potential benefits of those regulatory changes (e.g., better-managed risks, increased consumer protection, greater systemic stability, potentially higher economic growth over the long term) were outweighed by the potential costs (e.g., compliance costs incurred by banks, reduced credit availability for consumers and businesses, potentially slower economic growth). In response to these concerns, Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCP Act; P.L. 115-174 ). Among other things, the law modified certain (1) regulations facing small banks; (2) regulations facing banks large enough to be subjected to Dodd-Frank enhanced regulation but still below the size thresholds exceeded by the very largest banks; and (3) mortgage regulations facing lenders including banks. In addition, federal banking regulatory agencies—the Federal Reserve (the Fed), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC)—have proposed further changes in regulation. Implementing the regulatory changes prescribed in the aftermath of the crisis and made pursuant to the Dodd-Frank Act occurred over the course of years. In recent years—a period in which the leadership of the regulators has transferred from Obama Administration to Trump Administration appointees—the banking regulators have expressed the belief that, after having viewed the effects of the regulations, they now have the necessary information to determine which regulations may be ineffective or inefficient as currently implemented. Recently, these regulators have made of number of proposals with the aim of reducing regulatory burden. A key issue surrounding regulatory relief made pursuant to the EGRRCP Act and regulator-initiated changes is whether regulatory burden can be reduced without undermining the goals and effectiveness of the regulations. Meanwhile, market trends and economic conditions continue to affect the banking industry coincident with the implementation of new regulation. Some of the more notable conditions include the development of new technologies used in financial services (known as "fintech") and a rising interest rate environment following an extraordinarily long period of very low rates. This report provides a broad overview of selected banking-related issues, including issues related to "safety and soundness" regulation, consumer protection, community banks, large banks, what type of companies should be able to establish banks, and recent market and economic trends. This report is not an exhaustive look at all bank policy issues, nor is it a detailed examination of any one issue. Rather, it provides concise background and analyses of certain prominent issues that have been the subject of recent discussion and debate. In addition, this report provides a list of Congressional Research Service reports that examine specific issues. Banks face a number of regulations intended to increase the likelihood that banks are profitable without being excessively risky and prone to failures; decrease the likelihood that bank services are used to conceal the proceeds of criminal activities; and to protect banks and their customers' data from cyberattacks. This section provides background on these "safety and soundness" regulations and analyzes selected issues related to them, including prudential regulation related to capital requirements and the Volcker Rule (which restricts proprietary trading); requirements facing banks related to anti-money laundering laws, such as the Bank Secrecy Act (P.L. 91-508); and challenges related to cybersecurity. Bank failures can inflict large losses on stakeholders, including taxpayers via government "safety nets" such as deposit insurance and Federal Reserve lending facilities. Failures can cause systemic stress and sharp contraction in economic activity if they are large or widespread. To make such failures less likely—and to reduce losses when they do occur—regulators use prudential regulation designed to ensure banks are safely profitable and to reduce the likelihood of bank failure. In addition, banks are subject to regulations intended to reduce the prevalence of crime. Some of those are anti-money laundering measures aimed at stopping criminals from using the banking system to conduct or hide illegal operations. Others are cybersecurity regulations aimed at protecting banks and their customers from becoming victims of cybercrime, such as denial-of-service attacks or data theft. Banks profit in part because their assets are generally riskier, longer term, and more illiquid than their liabilities, which allows the banks to earn more interest on their assets than they pay on their liabilities. The practice is usually profitable, but does expose banks to risks that can potentially lead to failure. Failures can be reduced if (1) banks are better able to absorb losses or (2) they are less likely to experience unsustainably large losses. One tool regulators use to increase a bank's ability to absorb losses is to require banks to hold a minimum level of capital. Another tool regulators use to reduce the likelihood and size of potential losses is to prohibit banks from engaging in activities that could create excessive risks. For example, the Volcker Rule prohibits banks from engaging in proprietary trading —the buying and selling of securities that the bank itself owns with the aim of profiting from price changes. The EGRRCP Act mandated certain changes to these prudential regulations, and regulators have proposed changes under existing authorities. Regulators are to promulgate these changes through the rulemaking process in the coming months and years. In addition, whether policymakers have calibrated these regulations such that their benefits and costs are appropriately balanced is likely to be an area of ongoing debate. For these reasons, prudential regulation issues will likely continue to draw congressional attention. A bank's balance sheet is composed of assets, liabilities, and capital. Assets are largely the value of loans owed to the bank and securities owned by the bank. To make loans and buy securities, a bank secures funding by either issuing liabilities or raising capital. A bank's liabilities are largely the value of deposits and borrowings the bank owes savers and creditors. Capital is raised through various methods, including issuing equity to shareholders or special types of bonds that can be converted into equity. Banking is an inherently risky activity, because banks may suffer losses on assets but face rigid obligations on the liabilities owed to depositors and creditors. In contrast to liabilities, capital generally does not obligate the bank to repay or distribute a specified amount of money at a specified time. This characteristic means that, in the event a bank suffers losses, capital gives the bank the ability to absorb some amount of losses while meeting its obligations. Thus, banks can avoid failures if they hold sufficient capital. Banks are required to satisfy several requirements to ensure they hold enough capital. In the United States, these requirements are generally aligned with the Basel III standards developed as part of a nonbinding agreement between international bank regulators. In general, these are expressed as minimum ratios between certain balance sheet items that banks must maintain. A detailed examination of how these ratios are calculated and what levels must be met is beyond the scope of this report. This examination of policy issues only requires noting that capital ratios fall into one of two main types—a leverage ratio or a risk-weighted ratio. A leverage ratio treats all assets the same, requiring banks to hold the same amount of capital against assets regardless of how risky each asset is. A risk-weighted ratio assigns a risk weight—a percentage based on the riskiness of the asset that the asset value is multiplied by—to account for the fact that some assets are more likely to lose value than others. Riskier assets receive a higher risk weight, which requires banks to hold more capital to meet the ratio requirement. Whether the benefits of capital requirements (e.g., increased bank and financial system stability) are generally outweighed by the potential costs (e.g., reduced credit availability) is an issue subject to debate. Capital is typically a more expensive source of funding for banks than liabilities. Thus, requiring banks to hold higher levels of capital may make funding more expensive, and so banks may choose to reduce the amount of credit available. Some studies indicate this could slow economic growth. However, no economic consensus exists on this issue, because a more stable banking system with fewer crises and failures may lead to higher long-run economic growth. In addition, estimating the value of regulatory costs and benefits is subject to considerable uncertainty, due to difficulties and assumptions involved in complex economic modeling and estimation. Lack of consensus also surrounds questions over whether or under what circumstances risk-weighted ratios are necessary, effective, and efficient. Proponents of risk-based measures assert that it is important to use both risk-weighted and leverage ratios because each addresses weaknesses of the other. For example, riskier assets generally offer a greater rate of return to compensate the investor for bearing more risk. Without risk weighting, banks would have an incentive to hold riskier assets because the same amount of capital must be held against risky and safe assets. However, the use of risk-weighted ratios could be problematic for a number of reasons. Risk weights assigned to particular classes of assets could potentially be an inaccurate estimation of some assets' true risk, which could incent banks to misallocate available resources across asset classes. For example, banks held a high level of seemingly low-risk, mortgage-backed securities (MBSs) before the crisis, in part because those assets offered a higher rate of return than other assets with the same risk weight. MBSs then suffered unexpectedly large losses during the crisis. Another criticism is that the risk-weighted requirements involve "needless complexity" and their use is an example of regulatory micromanagement. The complexity could benefit the largest banks that have the resources to absorb the added regulatory cost compared with small banks that could find compliance costs more burdensome. (Small or "community" bank compliance issues will be covered in more detail in the " Regulatory Burden on Community Banks " section later in the report.) Section 201 of the EGRRCP Act is aimed at addressing concerns over the complexity of risk-weighted ratios and the costs they impose on community banks. This provision created an option for banks with less than $10 billion in assets to meet a higher leverage ratio—the Community Bank Leverage Ratio (CBLR)—in order to be exempt from having to meet the risk-based ratios described above. Bank regulators have issued a proposal to implement this provision wherein banks (1) below the threshold that (2) meet at least a 9% leverage ratio measure of equity and certain retained earnings to assets and (3) had limited off-balance sheet exposures and limited securities trading activity (among other requirements) would qualify for the exemption. The FDIC estimates that more than 80% of community banks will be eligible for the CBLR. However, this new optional exemption does not entirely settle the issue. One bank industry group has argued that 9% is set higher than is necessary, excluding deserving banks from the exemption. In addition, bills in the 115 th Congress, notably H.R. 10 , proposed a high-leverage-ratio option be available to banks regardless of size that would exempt qualifying banks from a wider range of prudential regulations. There are also specific policy issues relating to capital requirements for large banks, which are discussed in the " Regulator Proposals Related to Large Bank Capital Requirements " section below. Section 619 of Dodd-Frank—often referred to as the Volcker Rule—generally prohibits depository banks from engaging in proprietary trading or sponsoring a hedge fund or private equity fund. Proprietary trading refers to owning and trading securities for a bank's own portfolio with the aim of profiting from price changes. Put simply, if a bank is engaged in proprietary trading, it is itself an investor in stocks, bonds, and derivatives, which is commonly characterized as "playing the market" or "speculating." The rule includes exceptions for when bank trading is deemed appropriate—such as (1) when a bank is hedging against risks the bank has assumed as a part of its traditional business and (2) market-making (i.e., buying available securities with the intention of quickly selling them to meet market demand). Proprietary trading is an inherently risky activity, and banks have faced varying degrees of restrictions over engaging in this activity for a number of decades. Sections 16, 20, 21, and 32 of the Banking Act of 1933 (P.L. 73-66)—commonly referred to as the Glass-Steagall Act—generally prohibited certain deposit-taking banks from engaging in certain securities markets activities. Over time, regulator interpretation of Glass-Steagall and legislative changes expanded permissible activities for certain banks, allowing them to make certain securities investments and authorizing bank-holding companies to own depositories and securities firms within the same organization. The financial crisis increased debate over whether banks were engaging in unnecessarily risky activities. Ultimately, certain provisions in Dodd-Frank placed restrictions on permissible activities to reduce banks' riskiness, and the Volcker Rule was designed to prohibit proprietary trading by depository banking organizations. One of the Volcker Rule's proponents' main rationales for the separation of deposit-taking and certain securities investments is that when banks analyze and assume risks, they may be subject to moral hazard —the willingness to take on excessive risk due to some outside protection from losses. Deposits are an important source of bank funding and insured (up to a limit on each account) by the government. This arguably reduces depositors' incentive to monitor their banks' riskiness. Thus, a bank could potentially take on excessive risk without concern about losing this funding because, in the event of large losses that lead to failure, at least part of the losses will be borne by the FDIC's Deposit Insurance Fund (which is backed by the full faith and credit of the U.S. government and so ultimately the taxpayer). Thus, supporters of the Volcker Rule have characterized it as preventing banks from "gambling" in securities markets with taxpayer-backed deposits. However, critics of the Volcker Rule doubt its necessity and efficiency. In regard to necessity, they assert that proprietary trading at commercial banks did not play a substantive role in the financial crisis. They note the rule would not have prevented a number of the major events that played a direct role in the crisis—including failures or bailouts of large investment banks and insurers and losses on loans held by commercial banks. On this point, they also argue that proprietary trading risks are no greater than those posed by "traditional" banking activities, such as mortgage lending, and allowing banks to take on risks in different markets might diversify their risk profiles, making them less likely to fail. Debates relating to the efficiency of the Volcker Rule involve its complexity, compliance burden, and potential to lead banks to reduce their engagement in beneficial market activities. Recall that the Volcker Rule is not a ban on all trading, as banks are still allowed to trade to hedge risks or make markets. This poses practical supervisory problems. For example, how can regulators determine whether a broker-dealer is holding a security for market-making, as a hedge against another risk, or as a speculative investment? Differentiating among these motives creates the aforementioned complexity and compliance costs that could affect banks' trading behavior, and so could reduce financial market efficiency. Another criticism of the Volcker Rule in its original form was that it unnecessarily subjected all banks to the rule and their associated compliance costs. Critics of this aspect asserted that the vast majority of community banks are not involved in complex trading activity, but nevertheless must incur costs in evaluating the rule to ensure they are in compliance. Both Congress and regulators have recently taken actions in response to concerns over the complexity of the Volcker Rule and its compliance burden for small banks. Section 203 of the EGRRCP Act exempted banks with less than $10 billion in assets that fell below certain trading activity limits from the rule. Independent of that mandate, the agencies that implemented and enforced the Volcker Rule released and called for public comment on a proposal to simplify the rule in May 2018. Under the proposal, the agencies would clarify certain of the rule's definitions and criteria in an effort to reduce or eliminate uncertainties related to how certain trading activity can qualify for exemption. The proposal would also further tailor the compliance requirements facing banks based on the size of an institution's trading activity. Proponents of the Volcker Rule are generally wary of size-based exemptions. They contend that community banks typically do not face compliance obligations under the rule and do not face an excessive burden by being subject to it. They argue that community banks that are subject to compliance requirements can comply by having clear policies and procedures in place for review during the normal examination process. In addition, Volcker Rule supporters are generally critical of the regulators' proposal, asserting that the changes would undermine "the effective supervision and enforcement" of the rule. Anti-money laundering (AML) regulation refers to efforts to prevent criminal exploitation of financial systems to conceal the location, ownership, source, nature, or control of illicit proceeds. The U.S. Department of the Treasury estimates domestic financial crime, excluding tax evasion, generates $300 billion in illicit proceeds that might involve money laundering. Despite robust AML efforts in the United States, the ability to counter money laundering effectively remains challenged by factors including (1) the diversity of illicit methods to move and store ill-gotten proceeds through the international financial system; (2) the introduction of new and emerging threats such as cyber-related financial crimes; (3) gaps in legal, regulatory, and enforcement regimes; and (4) the costs associated with financial institution compliance with global AML guidance and national laws. In the United States, the statutory foundation for domestic AML originated in 1970 with the Bank Secrecy Act (BSA; P.L. 91-508) and its major component, the Currency and Foreign Transaction Reporting Act. Amendments to the BSA and related provisions in the 1980s and 1990s expanded AML policy tools available to combat crime, particularly drug trafficking, and prevent criminals from laundering their illicitly derived profits. Key elements to the BSA/AML legal framework include requirements for customer identification, recordkeeping, reporting, and compliance programs intended to identify and prevent money laundering abuses. In general, banking regulators examine institutions for compliance with BSA/AML. When a regulator finds BSA violations or deficiencies in AML compliance programs, it may take informal or formal enforcement action, including possible civil fines. The BSA/AML policy framework is premised on banks and other covered financial entities filing a range of reports with the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN), when their clients either engage in suspicious financial transactions, large cash transactions, or certain other transactions. For example, a bank generally must file a Suspicious Activity Report (SAR) if, among other reasons, it conducts a transaction of $5,000 or more that the bank suspects involves money laundering or other criminal activity. A bank must file a Currency Transaction Report (CTR) if it conducts a currency (i.e., cash) transaction of $10,000 or more as to which it has the same suspicions. The accurate, timely, and complete reporting of such activity to FinCEN flags situations that may warrant further investigation for law enforcement. Whether this regulatory framework adequately hinders criminals from using the banking system to launder their criminal proceeds and whether it does so efficiently without unduly burdening banks are debated issues. One aspect of this debate is whether current reporting requirements are inefficient and overly costly to the banking industry. Some industry observers—including officials from the OCC—have indicated that they believe certain areas of the current framework could be reformed in a way that reduces compliance costs without unduly weakening the ability to prevent money laundering. In contrast, officials from other agencies involved in AML and law enforcement—including FinCEN and the FBI—have stressed the importance of the information gathered under the current reporting requirements in combating money laundering. Another area of concern involves beneficial owners —that is, the natural person(s) who own or control a legal entity, such as a corporation or limited liability company. When such entities are set up without physical operations or assets, they are often referred to as shell companies . Shell companies can be used to conceal beneficial ownership and facilitate anonymous financial transactions. In recent years, policymakers have become increasingly concerned regarding potential risks posed by shell companies whose beneficial ownership is not transparent. This is due in part to a series of leaks to the media regarding the use of shell companies to facilitate criminal activity (such as "the Panama Papers") and sustained multilateral criticism of current U.S. practices by the Financial Action Task Force, an international standard-setting body. In May 2018, a new FinCEN regulation came into effect that increased the requirements for banks to conduct customer due diligence (CDD) and ascertain the identity of beneficial owners in certain cases. Central to the CDD rule is a requirement for financial institutions to establish and maintain procedures to identify and verify beneficial owners of a legal entity opening a new account. If Congress decides that reporting requirements facing banks are not appropriately calibrated, it could pass legislation amending those requirements. For example, Congress could change the CTR or SAR reporting threshold or index the threshold levels to inflation. Certain bills introduced in the 115 th Congress would have increased financial transparency and reporting requirements for beneficial owners in other nonbank fields, such as real estate, but could potentially indirectly impact the banking industry as well. Cybersecurity is a major concern of banks, other financial services providers, and federal regulators. In many ways, it is an important extension of physical security. For example, banks are concerned about both physical and electronic theft of money and other assets, and they do not want their businesses shut down by weather events or electronic denial-of-service attacks. Maintaining the confidentiality, security, and integrity of physical records and electronic data held by banks is critical to sustaining the level of trust that allows businesses and consumers to rely on the banking industry to supply services on which they depend. The federal government has increasingly recognized the importance of cybersecurity in the financial services industry, as evidenced by the inclusion of financial services in the government's list of critical infrastructure sectors. The basic authority that federal regulators use to establish cybersecurity standards emanates from the organic legislation that established the agencies and delineated the scope of their authority and functions. As previously discussed, federal banking regulators are required to promulgate safety and soundness standards for all federally insured depository institutions to protect the stability of the nation's banking system. Some of these standards pertain to cybersecurity issues, including information security, data breaches, and destruction or theft of business records. In addition, certain laws (at both the state and federal levels) have provisions related to cybersecurity of financial services that are often performed by banks, including the Dodd-Frank Act, the Gramm-Leach-Bliley Act of 1999 (GLBA; P.L. 106-102 ), and the Sarbanes-Oxley Act of 2002 ( P.L. 107-204 ). For example, Section 501 of GLBA imposes obligations on financial institutions to "respect the privacy of ... [their] customers and to protect the security and confidentiality of those customers' nonpublic personal information." Federal banking regulators require the entities that they regulate to protect customer privacy of physical and electronic records as mandated by the privacy title of GLBA. Federal bank regulators also issue guidance in a variety of forms designed to help banks evaluate their risks and comply with cybersecurity regulations. Regulators bring adjudicatory enforcement actions on a case-by-case basis related to banks' violations of cybersecurity protocols. Banks often view these actions as signaling how an agency interprets aspects of its regulatory authority. For example, a number of recent consent orders issued by the FDIC have directed banks to perform assessments or audits of information technology programs and management to identify risks and ensure compliance with cybersecurity requirements. Thus, oversight of financial services and bank cybersecurity reflects a complex and sometimes overlapping array of state and federal laws, regulators, regulations, and guidance. However, whether this framework is effective and efficient, resulting in adequate protection against cyberattacks without imposing undue cost burdens on banks, is an open question. The occurrence of successful hacks of banks and other financial institutions, wherein huge amounts of individuals' personal information are stolen or compromised, highlights the importance of ensuring bank cybersecurity. For example, in 2014, JPMorgan Chase, the largest U.S. bank, experienced a data breach that exposed financial records of 76 million households. However, no consensus exists on how best to reduce the occurrence of such incidents. Financial products can be complex and potentially difficult for consumers to fully understand. Consumers seeking loans or financial services could be vulnerable to deceptive or unfair practices. To reduce the occurrence of bad outcomes, laws and regulations have been put in place to protect consumers. This section provides background on consumer financial protection and the Bureau of Consumer Financial Protection's (CFPB) authority. The section also analyzes related issues, including whether the CFPB has used its authorities and regulations of banking institutions appropriately; concerns relating to the lack of consumer access to banking services; and whether the Community Reinvestment Act as currently implemented is effectively and efficiently meeting its goal of ensuring banks provide credit to the areas in which they operate. Banks are subject to consumer compliance regulation, intended to ensure that banks are in compliance with relevant consumer-protection and fair-lending laws. Federal laws and regulations in this area take a variety of approaches and address different areas of concern. Certain laws provide disclosure requirements intended to ensure consumers adequately understand the costs and other features and terms of financial products. Other laws prohibit unfair, deceptive, or abusive acts and practices. Fair lending laws prohibit discrimination in credit transactions based upon certain borrower characteristics, including sex, race, religion, or age, among others. The financial crisis raised concerns among policymakers that regulators' mandates lacked sufficient focus on consumer protection. In response, the Dodd-Frank Act established the CFPB with the single mandate to implement and enforce federal consumer financial law, while ensuring consumers can access financial products and services. The CFPB also seeks to ensure the markets for consumer financial services and products are fair, transparent, and competitive. For banks with more than $10 billion in assets, the CFPB is the primary regulator for consumer compliance, whereas safety and soundness regulation continues to be performed by the prudential regulator. As a regulator of larger banks, the CFPB has rulemaking, supervisory, and enforcement authorities. A large bank, therefore, has different regulators for consumer protection and safety and soundness. For banks with $10 billion or less in assets, the rulemaking, supervisory, and enforcement authorities for consumer protection are divided between the CFPB and a prudential regulator. The CFPB may issue rules that apply to smaller banks, but the prudential regulators maintain primary supervisory and enforcement authority for consumer protection. The CFPB has limited supervisory and enforcement powers over small banks. Consumer protection and fair lending compliance continue to be important issues for banks for numerous reasons. Noncompliance can result in regulators taking enforcement actions that may involve substantial penalties. In addition, even in the absence of enforcement actions, an institution faces reputational risks if it comes to be perceived as dealing badly with customers. For example, the CFPB maintains a consumer complaints database that makes public consumer complaints against individual companies readily available, potentially affecting prospective customers' decisions on which companies to use for financial services. The recent public reaction to and enforcement actions pertaining to Wells Fargo's unauthorized opening of customer accounts show the importance of strong consumer protection compliance. Recently, banks and other nonbank financial institutions that provide financial products to consumers (e.g., mortgages, credit cards, and deposit accounts) have been affected by the implementation of new CFPB regulations. For example, banks and other lenders have begun to comply with major new mortgage rules such as the Ability-to-Repay and Qualified Mortgage Standards Rule (ATR/QM) and Truth in Lending Act/Real Estate Settlement Act Integrated Disclosure Rule (TRID). The ATR/QM encourages lenders to gather more information on prospective borrowers than they otherwise might have in order to reduce the likelihood that a borrower would receive an inappropriate loan. TRID requires lenders to provide borrowers with certain information about the mortgages for which they are applying. In addition to these and other new regulations, the CFPB also provides information on its supervisory activities related to banks, such as instances where its examiners found that certain financial institutions misrepresented service fees associated with deposit and checking accounts. Compliance with these new rules has increased banks' operational costs, which some argue potentially leads to higher costs for consumers in certain markets or a reduction in the availability of credit. Others stress that CFPB's regulatory, supervisory, and enforcement efforts reduce the likelihood of consumer harm in financial markets. Debates about how best to achieve the appropriate balance between consumer protection, credit access, and industry costs are unlikely to be resolved easily, and thus may continue to be an area of congressional interest. The banking sector provides valuable financial services for households that allow them to save, make payments, and access credit. Safe and affordable financial services allow households to avoid financial hardship, build assets, and achieve financial security. However, many U.S. households (often those with low incomes, lack of credit histories, or credit histories marked with missed debt payments) do not use banking services. According to the FDIC's National Survey of Unbanked and Underbanked Households, in 2017, 6.5% of households in the United States were unbanked (i.e., did not have an account at an insured institution) and 18.7% of households were underbanked (i.e., obtained financial products and services outside of the banking system in the past year). Lack of bank access leads some households to rely on alternative financial service providers and consumer credit products outside of the formal banking sector, such as payday or auto title loans. According to an FDIC estimate, 12.9% of households had unmet demand for mainstream small-dollar credit. Certain observers believe that financial outcomes for the unbanked and underbanked would be improved if banks—which may be more likely to be a stable source of relatively inexpensive financial services relative to certain alternatives—were more active in meeting this demand. For this reason, prudential regulators, like the OCC and the FDIC, are currently exploring ways to encourage banks to offer small-dollar credit products to consumers, and other policymakers and observers will likely continue to explore ways to make banking more accessible to a greater portion of the population. The Community Reinvestment Act of 1977 (CRA; P.L. 95-128 ) addresses how banking institutions meet the credit needs of the areas they serve, notably in low- and moderate-income (LMI) neighborhoods. The federal prudential banking regulators (the Fed, the OCC, and the FDIC) conduct examinations to evaluate how banks are fulfilling the objectives of the CRA. The regulators issue CRA credits, or points, where banks engage in qualifying activities—such as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entities—that occur within an assigned assessment area . These credits are then used to issue each bank a performance rating, from Outstanding to Substantial Noncompliance. The CRA requires regulators to take these ratings into account when banks request to merge with other banking institutions or otherwise expand their operations into new areas. Whether regulations as currently implemented are effectively and efficiently meeting the CRA's goals has been the subject of debate. The banking industry and other observers assert that CRA regulations can be altered in a way that would reduce regulatory burden while still meeting the law's goals. Recently, the OCC and Treasury have made proposals to address those concerns. However, consumer and community advocates argue that efforts to provide relief to banks may potentially be at the expense of communities that the CRA is intended to help. Treasury made a number of recommendations to the bank regulators for changes to CRA regulations in a memorandum it sent to those agencies in April 2018. Regarding the need for modernization, the memorandum recommends revisiting the approach for determining banks' assessment areas, given that geographically defined areas arguably may not fully reflect the community served by a bank because of technology developments. Treasury also recommends establishing clearer standards for CRA-eligible activities that provide flexibility and expand the types of loans, investments, and services that are eligible for CRA credit. Regarding aspects of CRA compliance that may be unnecessarily burdensome, Treasury recommends increasing the timeliness of the CRA performance examination process. Regarding improving the outcomes that the CRA was intended to encourage, such as increasing the availability of credit to LMI neighborhoods, Treasury recommendations include incorporating performance incentives that might result in more efficient lending activities. In September 2018, the OCC published an advance notice of proposed rulemaking (ANPR) seeking public comment on 31 questions pertaining to issues to consider and possible changes to CRA regulation. The OCC's ANPR does not propose specific changes, but its content and the questions posed suggest that the OCC is exploring the possibility of adopting a quantitative metric-based approach to CRA performance evaluation, changing how assessment areas are defined, expanding CRA-qualifying activities, and reducing the complexity, ambiguity, and burden of the regulations on the bank industry. The OCC received more than 1,300 comment letters in response to the ANPR that were alternatively supportive or critical of the various possible alterations to CRA regulation. Although some banks hold a very large amount of assets, are complex, and operate on a national or international scale, the vast majority of U.S. banks are relatively small, have simple business models, and operate within a local area. This section provides background on these simpler banks—often called community bank s —and analyzes issues related to them, including regulatory relief for community banks and the long-term decline in the number of community banks. Although there is no official definition of a community bank, policymakers and the public generally recognize that the vast majority of U.S. banks differ substantially from a relatively small number of very large and complex banking organizations in a number of ways. Community banks tend to hold a relatively small amount of assets (although asset size alone need not be a determining factor); be more concentrated in core bank businesses of making loans and taking deposits and less involved in other, more complex activities; and operate within a smaller geographic area, making them generally more likely to practice relationship lending wherein loan officers and other bank employees have a longer standing and perhaps more personal relationship with borrowers. Therefore, community banks may serve as particularly important credit sources for local communities and underserved groups of which large banks may have little familiarity. In addition, relative to large banks, community banks generally have fewer employees, less resources to dedicate to regulatory compliance, and individually pose less of a systemic risk to the broader financial system. Congress often faces policy issue questions related to community banks. Community bank advocates often assert the tailoring of regulations currently in place does not adequately balance the benefits and costs of the regulations when applied to community banks. Concerns have also been raised about the three-decade decline in the number and market presence of these institutions, and the predominant cause of that decline is a matter of debate. In recent decades, community banks, under almost any common definition, have seen their numbers decline and their collective share of banking industry assets fall in the United States. Overall, the number of FDIC-insured institutions fell from a peak of 18,083 in 1986 to 5,477 in 2018. The number of institutions with less than $1 billion in assets fell from 17,514 to 4,704 during that time period, and the share of industry assets held by those banks fell from 37% to 7%. Meanwhile, the number of banks with more than $10 billion in assets rose from 38 to 138, and the share of total banking industry assets held by those banks increased from 28% to 84%. The decrease in the number of community banks occurred mainly through three methods: mergers, failures, and lack of new banks. Most of the decline in the number of institutions in the past 30 years was due to mergers, which averaged more than 400 a year from 1990 to 2016. Failures were minimal from 1999 to 2007, but played a larger role in the decline during the late 1980s and following the 2007-2009 financial crisis and subsequent recession. As economic conditions have improved, failures have declined, but the number of n ew r eporters —new chartered institutions providing information to the FDIC for the first time—has been extraordinarily small in recent years. For example, in the 1990s, an average of 130 new banks reported data to the FDIC per year. Through September 30, five new banks reported data to the FDIC in 2018. Observers have cited several possible causes for this industry consolidation. Some observers argue the decline indicates that the regulatory burden on community banks is too onerous, driving smaller banks to merge to create or join larger institutions, an argument covered in more detail in the following section, " Regulatory Burden on Community Banks ." However, mergers—the largest factor in consolidation—could occur for a variety of reasons. For example, a bank that is struggling financially may look to merge with a stronger bank to stay in business. Alternatively, a community bank that has been outperforming its peers may be bought by a larger bank that wants to benefit from its success. In addition, other fundamental changes besides regulatory burden in the banking system could be driving consolidation, making it difficult to isolate the effects of regulation. Through much of the 20 th century, federal and state laws restricted banks' ability to open new branches and banking across state lines was restricted. Thus, many more banks were needed to serve every community. Branching and banking across state lines was not substantially deregulated at the federal level until 1997 through the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ( P.L. 103-328 ). When these restrictions were relaxed, it became easier for community banks to consolidate or for mid-size and large banks to spread operations to other markets. In addition, there may be economies of scale, not only in compliance, but in the business of banking in general. Furthermore, the economies of scale may be growing over time, which would also drive industry consolidation. For example, information technology has become more important in banking (e.g., cybersecurity and mobile banking), and certain information technology systems may be subject to economies of scale. Finally, the slow growth coming out of the most recent recession, and macroeconomic conditions more generally (such as low interest rates), may make it less appealing for new firms to enter the banking market. Community banks receive special regulatory consideration to minimize their regulatory burden. For example, many regulations—including a number of regulations implemented pursuant to the Dodd-Frank Act—include exemptions for community banks or are otherwise tailored to reduce compliance costs for community banks. Title I and Title II of the EGRRCP Act contained numerous provisions that provided new exemptions to community banks or raised the thresholds for existing exemptions, such as the Community Bank Leverage Ratio and Volcker Rule exemptions discussed above in the " Prudential Regulation " section. In addition, bank regulators are required to consider the effect of rules on community banks during the rulemaking process pursuant to provisions in the Regulatory Flexibility Act ( P.L. 96-354 ) and the Riegle Community Development and Regulatory Improvement Act ( P.L. 103-325 ). Supervision is also structured to pose less of a burden on small banks than larger banks, such as by requiring less-frequent bank examinations for certain small banks and less intensive reporting requirements. However, Congress often faces questions related to whether tailoring in general or tailoring provided in specific regulations is sufficient to ensure that an appropriate trade-off has been struck between the benefits and costs of regulations facing community banks. Advocates for further regulatory relief argue that certain realized benefits are likely to be relatively small, whereas certain realized costs are likely to be relatively large. One area where the benefits of regulation may be relatively small for community banks relative to large banks is regulations aimed at improving systemic stability, because community banks individually pose less of a risk to the financial system as a whole than a large, complex, interconnected bank. Many recent banking regulations were implemented at least in part in response to the systemic nature of the 2007-2009 crisis. Some community bank proponents argue that because small banks did not cause the crisis and pose less systemic risk, they need not be subject to new regulations made in response to the crisis. Opponents of these arguments note that systemic risk is only one of the goals of regulation, along with prudential regulation and consumer protection, and that community banks are exempted from many of the regulations aimed at systemic risk. They note that hundreds of small banks failed during and after the crisis, suggesting the prudential regulation in place prior to the crisis was not stringent enough. Another potential rationale for easing regulations on community banks would be if there are economies of scale to regulatory compliance costs, meaning that regulatory compliance costs may increase as bank size does but decrease as a percentage of overall costs or revenues. Put another way, as regulatory complexity increases, compliance may become relatively more costly for small institutions. Empirical evidence on whether compliance costs are subject to economies of scale is mixed, thus consider this illustrative example to show the logic behind the argument. Imagine a bank with $100 million in assets and 25 employees and a bank with $10 billion in assets and 1,250 employees each determine they must hire an extra employee to ensure compliance with new regulations. The relative burden is larger on the small institution that expands its workforce by 4% than on the large bank that expands by less than 0.1%. From a cost-benefit perspective, if regulatory compliance costs are subject to economies of scale, then the balance of costs and benefits of a particular regulation will differ depending on the size of the bank. For the same regulatory proposal, economies of scale could potentially result in costs outweighing benefits for smaller banks. Due to a lack of empirical evidence of the exact benefits and costs of each individual regulation at each individual bank (and even lack of consensus over which banks should qualify as community banks), debates over the appropriate level of tailoring of regulations is a debate over calibration involving qualitative assessments. Where should the lines be drawn? Should exemption thresholds be set high so that regulations apply only to the very largest, most complex banks? Should thresholds be set relatively low, so that only very small banks are exempt? At what point does a bank cease to have the characteristics associated with community banks? Often at issue in this debate are the so-called regional banks —banks that are larger and operate across a greater geographic market than the community banks but are also smaller and less complex than the largest, most complex organizations with hundreds of billions or trillions of dollars in assets. Should regulators provide regional banks the same exemptions as those provided to community banks? Policymakers, in the 116 th Congress, continue to face these and other questions concerning community banks. Along with the thousands of relatively small banks operating in the United States, there are a handful of banks with hundreds of billions of dollars of assets. The 2007-2009 financial crisis highlighted the problem of "too big to fail" (TBTF) financial institutions—the concept that the failure of a large financial firm could trigger financial instability, which in several cases prompted extraordinary federal assistance to prevent the failure of certain of these institutions. In response to the crisis, policymakers took a number of steps through the Dodd-Frank Act and the Basel III Accords to eliminate the TBTF problem, including subjecting the largest banks to enhanced prudential regulations, a new resolution regime to unwind these banks in the event of failure, and higher capital requirements. This section provides background on these large banks and examines issues related to them, including reductions in the application of enhanced prudential regulations facing certain large banks made pursuant to P.L. 115-174 and changes to capital requirements proposed by regulators that would reduce the amount of capital certain large banks would have to hold. As regulators implement these statutory changes and their proposed rules move forward, Congress faces questions about whether relaxing these regulations appropriately eases overly stringent requirements or unnecessarily increases the likelihood that large banks take on excessive risks. Some bank holding companies (BHCs) have hundreds of billions or trillions of dollars in assets and are deeply interconnected with other financial institutions. A bank may be so large that its leadership and market participants may believe that the government would save it if it became distressed. This belief could arise from the determination that the institution is so important to the country's financial system—and that its failure would be so costly to the economy and society—that the government would feel compelled to avoid that outcome. An institution of this size and complexity is said to be TBTF. In addition to fairness issues, economic theory suggests that expectations that a firm will not be allowed to fail creates moral hazard —if the creditors and counterparties of a TBTF firm believe that the government will protect them from losses, they have less incentive to monitor the firm's riskiness because they are shielded from the negative consequences of those risks. As a result, TBTF institutions may have incentives to be excessively risky, gain unfair advantages in the market for funding, and expose taxpayers to losses. Several market forces likely drive banks and other financial institutions to grow in size and complexity, thereby potentially increasing efficiency and improving financial and economic outcomes. For example, marginal costs can be reduced through economies of scale; risk can be diversified by spreading exposures over multiple business lines and geographic markets; and a greater array of financial products could be offered to customers allowing a bank to potentially attract new customers or strengthen relationships with existing ones. These market forces and the relaxation of certain interstate banking and branching regulations described in the " Reduction in Community Banks " section may have driven some banks to become very large and complex in the years preceding the crisis. At the end of 1997, two insured depository institutions held more than $250 billion in assets, and together accounted for about 9.3% of total industry assets. By the end of 2007, six banks held more than $250 billion in assets, accounting for 40.9% of industry assets. The trend has generally continued, and as of the third quarter of 2018, nine banks held more than $250 billion in assets, accounting for 49.5% of industry assets. Many assert that the worsening of the financial crisis in fall 2008 was a demonstration of TBTF-related problems. Large institutions had taken on risks that resulted in large losses, causing the institutions to come under threat of failure. In some cases, the U.S. government took actions to stabilize the financial system and individual institutions. Wachovia and Washington Mutual were large institutions that were acquired by other institutions to avoid their failure during the crisis. Bank of America and Citigroup received extraordinary assistance through the Troubled Asset Relief Program (TARP) to address financial difficulties. Other large (and small) banks participated in emergency government programs offered by the Treasury (TARP), the Federal Reserve, and the FDIC. In response, the Dodd-Frank Act attempted to end TBTF through (1) a new regulatory regime to reduce the likelihood that large banks would fail; (2) a new resolution regime to make it easier to safely wind down large bank holding companies that are at risk of failing; and (3) new restrictions on regulators' use of emergency authority to prevent "bail outs" of failing large banks. In addition, the Federal Reserve imposed additional capital requirements on the largest banks that largely aligned with proposed standards set out by the Basel III Accords, with some exceptions. To make it less likely that large banks would fail, certain large banks are now subject to an enhanced prudential regulatory regime administered by the Federal Reserve. Under this regime, large banks are subject to more stringent safety and soundness standards than other banks. They must comply with higher capital and liquidity requirements, undergo stress tests, produce living wills and capital plans, and comply with counterparty limits and risk management requirements. To make it easier to wind down complex BHCs with nonbank subsidiaries, the Dodd-Frank Act created the Orderly Liquidation Authority (OLA), a resolution regime administered by the FDIC that is similar to how the FDIC resolves bank subsidiaries. This replaced the bankruptcy process, focused on the rights of creditors, with an administrative process, focused on financial stability, for winding down such firms. To date, OLA has never been used. The Dodd-Frank Act initially applied enhanced prudential regulation requirements to all BHCs with more than $50 billion in assets, although more stringent standards were limited to banks with more than $250 billion in assets or $10 billion in foreign exposure, and the most stringent standards were limited to U.S. globally systemically important banks (G-SIBs), the eight most complex U.S. banks. Subsequent to the enactment of Dodd-Frank, critics of the $50 billion asset threshold argued that many banks above that size are not systemically important and that Congress should raise the threshold. In particular, critics distinguished between regional banks (which tend to be at the lower end of the asset range and, some claim, have a traditional banking business model comparable to community banks) and Wall Street banks ( a term applied to the largest, most complex organizations that tend to have significant nonbank financial activities). Opponents of raising the threshold disputed this characterization, arguing that some regional banks are involved in sophisticated activities, such as being swap dealers, and have large off-balance-sheet exposures. In response to concerns that the enhanced prudential regulation threshold was set too low, P.L. 115-174 exempted banks with between $50 billion and $100 billion in assets from enhanced prudential regulation, leaving them to be regulated in general like any other bank. Under the proposed rule implementing the P.L. 115-174 changes, the Fed has increased the tiering of enhanced regulation for banks with more than $100 billion in assets. The proposed rule would create four categories of banks based on size and complexity, and impose increasingly stringent requirements on each category. From most to least stringent, Category I would currently include the eight G-SIBs, Category II would include one bank, Category III would include four banks, and Category IV would include 11 banks. Compared with current policy, banks in all categories would face reduced regulatory requirements under this rule, other proposed rules, and forthcoming rules required by Section 402 of P.L. 115-174 , if finalized. In addition, P.L. 115-174 created new size-based exemptions from various regulations, increasing the tendency to subject larger banks to more stringent requirements than smaller banks. These changes include exemptions from the Volcker Rule and risk-weighted capital requirements for banks with less than $10 billion in assets (meeting certain criteria). Proponents of the changes assert they provide necessary and targeted regulatory relief. Opponents argue they needlessly pare back important Dodd-Frank protections to the benefit of large and profitable banks. As discussed in the " Capital Requirements " section, all banks must hold enough capital to meet certain capital ratio requirements. Broadly, those requirements take two forms—risk-weighted requirements and unweighted leverage requirements. In addition, a small subset of very large and very complex banks also face additional capital ratio requirements implemented by the U.S. federal bank regulators. The Federal Reserve has made two proposals to simplify and relax certain aspects of these additional requirements, and these proposals are subject to debate. All banks must hold additional high-quality capital on top of the minimum required levels—called the capital conservation buffer (CCB)—to avoid limitations on their capital distributions, such as dividend payments. In addition, certain large banks are subject to the Federal Reserve's stress tests, the results of which can lead to restrictions on the bank's capital distributions. Stress tests are intended to ensure that banks hold enough capital to withstand a hypothetical market stress scenario, but arguably have the effect of acting as additional capital requirements with which banks must comply. Advanced approaches banks must maintain a fixed minimum supplementary leverage ratio (SLR), an unweighted capital requirement that is more stringent than the leverage ratio facing smaller banks because it incorporates off-balance sheet exposures. A Congressional Research Service (CRS) analysis of large holding companies' regulatory filings indicates that, currently, 19 large and complex U.S. bank or thrift holding companies are classified as advanced approaches banks. G-SIBs must meet fixed enhanced SLR (eSLR) requirements, which sets the SLR higher for these banks. In addition, the G-SIBs are subject to an additional risk-weighted capital surcharge (on top of other risk-weighted capital requirements that all banks must meet) of between 1% and 4.5% based on the systemic importance of the institution. Whether these requirements are appropriately calibrated is a debated issue. Proponents of recalibrating some of these capital requirements argue that those requirements set at a fixed number—including the CCB and eSLR—are inefficient, because they do not reflect varying levels of risk posed by individual banks. Recalibration proponents also argue that compiling with these requirements in addition to stress test requirements is unnecessarily burdensome for banks. Opponents of proposals to relax current capital requirements facing large and profitable banks assert that doing so needlessly pares back important safeguards against bank failures and systemic instability. In response to concerns that fixed requirements do not adequately account for risk differences between institutions, the Fed has issued two proposals for public comment that would link individual large banks' requirements with other risk measures. One proposal would make bank CCB requirements a function of their stress tests results, and the other proposal would link large banks' eSLR requirements with individual G-SIB systemic importance scores. The Fed estimates that the new CCB requirement would generally reduce the amount of capital large banks would have to hold, but that some G-SIBs would see their required capital levels increase. The Fed estimates that the new eSLR requirement would generally reduce the amount of capital held by G-SIB parent companies by $400 million and the amount held by insured depository subsidiaries by $121 billion. To legally operate as a bank and perform the relevant activities, an institution generally must have a charter granted by either the OCC at the federal level or a state-level authority. In addition, to engage in certain activities, the institution must have federal deposit insurance granted by the FDIC. Currently, these requirements raise a number of policy questions, including whether companies established primarily as financial technology companies should be able to receive a national bank charter, as has been offered by the OCC; and whether the application process and determinations made by the FDIC as they relate to institutions seeking a specific type of state charter, called an industrial loan company (ILC) charter, is overly restrictive. An institution that makes loans and takes deposits—the core activities of traditional commercial banking—must have a government issued charter. Numerous types of charters exist, including national bank charters; state bank charters; federal savings association charters, and state savings association charters (saving associations are also referred to as thrifts ). Each charter type determines what activities are permissible for the institution, what activities are restricted, and which agency will be the institution's primary federal regulator (see Table 1 ). One of the main rationales for this system is that it gives institutions with different business models and ownership arrangements the ability to choose a regulatory regime appropriately suited to the institution's business needs and risks. The differences between institution business models and the attendant regulations are numerous, varied, and beyond the scope of this report. The issues examined in this section arise from each charter's granting an institution the right to engage in certain banking related activities, and thus generating the potential benefits and risks of those activities. Broadly, these issues relate to questions over whether companies that differ from traditional banks should be allowed to engage in traditional banking activities given the types and magnitudes of benefits and risks the companies might present. Recent advances in technology, including the proliferation of available data and internet access, have altered the way financial activities are performed in many ways. These innovations in financial technology, or fintech, have created the opportunity for certain activities that have traditionally been the business of banks to instead be performed by technology-focused, nonbank companies. Lending and payment processing are prominent examples. This development has raised questions over how these fintech companies should be regulated, and the appropriate federal and state roles in that regulation. One possible, though contested, proposal for addressing a number of these questions would be to make an OCC national bank charter available to certain fintech companies. Many nonbank fintech companies performing bank-like activities are regulated largely at the state level. They may have to obtain lending licenses or register as money transmitters in every state they operate and may be subject to the consumer protection laws of that state, such as interest rate limits. Proponents of fintech companies argue that subjecting certain technology companies to 50 different state level regulatory regimes is unnecessarily burdensome and hinders companies that hope to achieve nationwide operations quickly using the internet. In addition, a degree of uncertainty surrounding the applicability of certain laws and regulations to certain fintech firms and activities has arisen. For example, whether federal preemption of state interest rate limits apply to loans made through a marketplace lender —that is, online-only lenders that exclusively use automated, algorithmic underwriting—but originated by a bank faces legal uncertainty due to certain court decisions, including Madden v Midlands . One possible avenue to ease the state-by-state regulatory burdens and resolve the uncertainties facing some fintech firms would be to allow those firms that perform bank-like activities to apply for and (provided they meet necessary requirements) to grant them national bank charters. First proposed in 2016 by then-Comptroller of the Currency Thomas Curry, and following subsequent examination of the issue and review of public comments, the OCC announced in July 2018 that it would consider "applications for special purpose bank charters from financial technology (fintech) companies that are engaged in the business of banking but do not take deposits." OCC argues that companies with such a charter would be explicitly subject to all laws and regulations (including those that preempt state law, a contentious issue addressed below) applicable to national banks. The OCC stated that fintech firms granted the charter "will be subject to the same high standards of safety and soundness and fairness that all federally chartered banks must meet," and also that the OCC "may need to account for differences in business models and activities, risks, and the inapplicability of certain laws resulting from the uninsured status of the bank." Thus, the argument goes, establishing a fintech charter would mean a new set of innovative companies would no longer face regulatory uncertainty and could safely and efficiently provide beneficial financial services, perhaps to populations and market-niches that banks with traditional cost structures do not find cost-effective to serve. Until the OCC actually grants such charters and fintech firms operate under the national bank regime for some amount of time, how well this policy fosters potential innovations and benefits while guarding against risks is the subject of debate. Proponents of the idea generally view the charter as a mechanism for freeing companies from what they assert is the unnecessarily onerous regulatory burden of being subject to numerous state regulatory regimes. They further argue that this would be achieved without overly relaxing regulations, as the companies would become subject to the OCC's national bank regulatory regime and its rulemaking, supervisory, and enforcement authorities. Opponents generally assert both that the OCC does not have the authority to charter these types of companies, as discussed below, and that doing so would inappropriately allow marketplace lenders to circumvent important state-level consumer protections. The OCC's assertion that it has the authority to grant such charters has been challenged. Shortly after the initial 2016 announcements that the OCC was examining the possibility of granting the charters, the Conference of State Bank Supervisors and the New York State Department of Financial Services sued the OCC to prevent it from issuing the charters on the grounds that it lacked the authority to do so. A federal district court dismissed the case after concluding that because the OCC had not yet issued charters to nonbanks, the plaintiffs (1) lacked standing to challenge the OCC's purported decision to move forward with chartering nonbanks, and (2) had alleged claims that were not ripe for adjudication. Subsequent to the OCC's July 2018 announcement, state regulators have again filed lawsuits. Industrial loan companies (ILCs) hold a particular type of charter offered by some states that generally allows ILCs to engage in certain banking activities. Depending on the state, those activities can include deposit-taking, but only if they are granted deposit insurance by the FDIC. Thus, ILCs that take deposits are state regulated with the FDIC acting as the primary federal regulator. Importantly, a parent company that owns an ILC that meets certain criteria is not necessarily considered a BHC for legal and regulatory purposes. This means ILC charters create an avenue for commercial firms (i.e., companies not primarily focused on the financial industry, such as manufacturers, retailers, or possibly technology companies) to own a bank. Nonfinancial parent companies of ILCs generally are not subject to Fed supervision and other regulations pursuant to the Bank Holding Company Act of 1956 (P.L. 84-511). A commercial firm may want to own a bank for a number of economic reasons. For example, an ILC can provide financing to the parent company's customers and clients and thus increase sales for the parent. In recent decades, household-name manufacturers have owned ILCs, including but not limited to General Motors, Toyota, Harley Davidson, and General Electric. However, while they can generate profits and potentially increase credit availability, ILCs pose a number of potential risks. The United States has historically adopted policies to generally separate commerce and banking, because allowing a single company to be involved in both activities could potentially result in a number of bad outcomes. A mixed organization's banking subsidiary could make decisions based on the interests of the larger organization, such as making overly risky loans to customers of a commerce subsidiary or providing funding to save a failing commerce subsidiary. Such conflicts of interest could threaten the safety and soundness of the bank. Relatedly, some have argued that having a federally insured bank within a commercial organization is an inappropriate expansion of federal banking safety nets (such as deposit insurance). Certain observers, including community banks, have concerns over whether purely commercial or purely banking organizations would be able to compete with combined organizations that could potentially use economies of scale and funding advantages to exercise market power. These arguments played a prominent role in the public debate that was sparked when Walmart and Home Depot made unsuccessful efforts to secure an ILC charter between 2005 and 2008. Amid this debate, the FDIC imposed a moratorium in 2006 on the acceptance, approval, or denial of ILC applications for deposit insurance while the agency reexamined its policies related to these companies. That moratorium ended in January 2008. Subsequently, concerns over ILCs led Congress to mandate another moratorium (this one lasting three years, ending in July 2013) on granting new ILCs deposit insurance in the Dodd-Frank Act. No consensus has been reached on the magnitude of these risks and validity of the concerns surrounding deposit-taking ILCs. Recently, two financial technology companies, Square and SoFi, have applied for ILC charters and renewed debates over ILCs. Even though the moratoriums on granting ILCs deposit insurance have expired, the FDIC has not approved any new ILC applications since the 2013 expiration. However, since becoming FDIC chairman in June 2018, Jelena McWilliams has made statements indicating that under her leadership the FDIC will again consider ILC applications. Given the interest in and debate surrounding this charter type, policymakers will likely examine questions over the extent to which ILCs create innovative sources of credit and financial services subject to appropriate safeguards or inadvisably allow commercial organizations to act as banks with federal safety nets while exempting them from certain bank regulation and supervision. In addition to regulation issues, market and economic conditions and trends continually affect the banking industry. This section analyzes such trends that may affect banks, including migration of financial activity from banks into nonbanks or the "shadow banking" system; increasing capabilities and market presence of financial technology or fintech; and a higher interest rate environment following a long period of extraordinarily low rates. Credit intermediation is a core banking activity and involves transforming short-term, liquid, safe liabilities into relatively long-term, illiquid, higher-risk assets. In the context of traditional banking, credit intermediation is performed by taking deposits from savers and using them to fund loans to borrowers. Nonbank institutions can also perform similar credit intermediation to banks—sometimes called shadow banking —using certain instruments such as money market mutual funds, short-term debt instruments, and securitized pools of loans. When illiquid assets are funded by liquid liabilities, an otherwise-solvent bank or nonbank might experience difficulty meeting short-term obligations without having to sell assets, possibly at "fire sale" prices. If depositors or other funding providers feel their money is not safe with an institution, many of them may withdraw their funds at the same time. Such a "run" could cause an institution to fail. Long-established government programs mitigate liquidity- and run-risk in the banking industry. The Federal Reserve is authorized to act as a "lender of last resort" for a bank experiencing liquidity problems, and the FDIC insures depositors against losses. Banks are also subject to prudential regulation—as discussed in the " Prudential Regulation " section. However, nonbank intermediation is performed without the government safety nets available to banks or the prudential regulation required of them. The lack of an explicit government safety net in shadow banking means that taxpayers are less explicitly or directly exposed to risk, but it also means that shadow banking may be more vulnerable to a panic that could trigger a financial crisis. Some argue that the increased regulatory burden placed on banks in response to the financial crisis—such as the changes in bank regulation mandated by Dodd-Frank or agreed to in Basel III—could result in a decreased role for banks in credit intermediation and an increased role for relatively lightly regulated nonbanks. Many contend the financial crisis demonstrated how risks to deposit-like financial instruments in the shadow banking sector—such as money market mutual funds and repurchase agreements—can create or exacerbate systemic distress. Money market mutual funds are deposit-like instruments that are managed with the goal of never losing principal and that investors can convert to cash on demand. Institutions can also access deposit-like funding by borrowing through short-term funding markets—such as by issuing commercial paper and entering repurchase agreements. These instruments can be continually rolled over as long as funding providers have confidence in the borrowers' solvency. During the crisis, all these instruments—which investors had previously viewed as safe and unlikely to suffer losses—experienced run-like events as funding providers withdrew from markets. Moreover, nonbanks can take on exposure to long-term loans through investing in mortgage-backed securities (MBS) or other asset-backed securities (ABS). During the crisis, as firms faced liquidity problems, the value of these assets decreased quickly, possibly in part as a result of fire sales. Since the crisis, many regulatory changes have been made related to certain money market, commercial paper, and repurchase agreement markets and practices. For example, in the United States, certain money market mutual funds now must have a floating net asset value . Among other benefits, this may signal to fund investors that a loss of principal is possible and thus reduce the likelihood that investors would "run" at the first sign of possible small losses. However, some observers are still concerned that shadow banking poses risks, because the funding of relatively long-term assets with relatively short-term liabilities will inherently introduce run-risk absent certain safeguards. As discussed above, f intech usually refers to technologies with the potential to alter the way certain financial services are performed. Banks are affected by technological developments in two ways: (1) they face choices over how much to invest in emerging technologies and to what extent they want to alter their business models in adopting technologies, and (2) they potentially face new competition from new technology-focused companies. Such technologies include online marketplace lending, crowdfunding, blockchain and distributed ledgers, and robo-advising, among many others. Certain financial innovations may create opportunities to improve social and economic outcomes, but there is also potential to create risks or unexpected financial losses. Potential benefits from fintech are greater efficiency in financial markets that creates lower prices and increased customer and small business access to financial services. These can be achieved if innovative technology replaces traditional processes that are outdated or inefficient. For example, automation may be able to replace employees, and digital technology can replace physical systems and infrastructure. Cost savings from removing inefficiencies may lead to reduced prices, making certain services affordable to new customers. Some customers who previously did not have access to services—due to such things as the lack of information about creditworthiness or geographic remoteness—could also potentially gain access. Increased accessibility may be especially beneficial to traditionally underserved groups, such as low-income, minority, and rural populations. Fintech could also create or increase risks. Many fintech products have only a brief history of operation, so it can be difficult to predict outcomes and assess risk. It is possible certain technologies may not in the end function as efficiently and accurately as intended. Also, the stated aim of a new technology is often to bring a product directly to consumers and eliminate a "middle-man." However, that middle-man could be an experienced financial institution or professional that can advise consumers on financial products and their risks. In these ways, fintech could increase the likelihood that consumers engage in a financial activity and take on risks that they do not fully understand. Policymakers debate whether (and which) innovations can be integrated into the financial system without additional regulatory or policy action. Technology in finance largely involves reducing the costs or time involved in providing existing products and services, and the existing regulatory structure was developed to address risks from these financial products and activities. Existing regulation may be able to accommodate new technologies while adequately protecting against risks. However, there are two other possibilities. One is that some regulations may be stifling beneficial innovation. Another is that existing regulation does not adequately address risks created by new technologies. Some observers argue that regulation could potentially impede the development and introduction of beneficial innovation. For example, companies incur costs to comply with regulations. In addition, companies are sometimes unsure how regulators will treat the innovation once it is brought to market. A potential solution being used in other countries is to establish a regulatory "sandbox" or "greenhouse" wherein companies that meet certain requirements work with regulators as products are brought to market under a less onerous regulatory framework. In the United States, the CFPB has recently introduced a sandbox wherein companies can experiment with disclosure forms. Some are concerned that existing regulations may not adequately address certain risks posed by new technologies. Regulatory arbitrage—conducting business in a way that circumvents unfavorable regulations—may be a concern in this area. Fintech potentially could provide an opportunity for companies to claim they are not subject to certain regulations because of a superficial difference between how they operate compared with traditional banks. Another group of issues posed by fintech relates to cybersecurity (for general issues related to cybersecurity, see the " Cybersecurity " section above). As financial activity increasingly uses digital technology, sensitive data are generated. Data can be used to accurately assess risks and ensure customers receive the best products and services. However, data can be stolen and used inappropriately, and there are concerns over privacy issues. This raises questions over ownership and control of the data—including the rights of consumers and the responsibilities of companies in accessing and using data—and whether companies that use and collect data face appropriate cybersecurity requirements. The Federal Reserve's monetary policy response to the financial crisis, the ensuing recession, and subsequent slow economic growth was to keep interest rates unusually low for an extraordinarily long time. It accomplished this in part using unprecedented monetary policy tools such as quantitative easing —large-scale asset purchases that significantly increased the size of the Federal Reserve's balance sheet. Recently, as economic conditions improved, the Federal Reserve took steps to normalize monetary policy such as raising its target interest rate and reducing the size of its balance sheet. A rising interest rate environment—especially following an extended period of unusually low rates achieved with unprecedented monetary policy tools—is an issue for banks because they are exposed to interest rate risk . A portion of bank assets have fixed interest rates with long terms until maturity, such as mortgages, and the rates of return on these assets do not increase as current market rates do. However, many bank liabilities are short term, such as deposits, and can be repriced quickly. So although certain interest revenue being collected by banks is slow to rise, the interest costs paid out by banks can rise quickly. In addition to putting stress on net income, rising interest rates can cause the market value of fixed-rate assets to fall. Finally, banks incur an opportunity cost when resources are tied up in long-term assets with low interest rates rather than being used to make new loans at higher interest rates. The magnitude of interest rate risks should not be overstated, as rising rates can potentially increase bank profitability if they result in a greater difference between long-term rates banks receive and short-term rates they pay—referred to as net interest margin . However, thus far into the Federal Reserve interest rate normalization process, this has not materialized. During 2018, the difference between long-term rates and short-term rates has generally decreased (known as a flattening of the yield curve ). Whatever changes may occur to various interest rates in the coming months and years, banks and regulators typically recognize the importance of managing interest rate risk, carefully examine the composition of bank balance sheets, and plan for different interest rate change scenarios. While banks are well-practiced at interest rate risk management through normal economic and monetary policy cycles, managing bank risk through a period of interest rate growth could be more challenging because rates have been so low for so long and achieved through unprecedented monetary policy tools. Because rates have been low for so long, many loans made in different interest rate environments that preceded the crisis have matured. Meanwhile, all new loans made in the past 10 years were made in a low interest rate environment. This presents challenges to banks seeking to hold a mix of loans with different rates. In addition, because the Federal Reserve has used new monetary policy tools and grown its balance sheet to unprecedented levels, accurately controlling the pace of interest rate growth may be challenging.
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Regulation of the banking industry has undergone substantial changes over the past decade. In response to the 2007-2009 financial crisis, many new bank regulations were implemented pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act; P.L. 111-203) or under the existing authorities of bank regulators to address apparent weaknesses in the regulatory regime. While some observers view those changes as necessary and effective, others argued that certain regulations were unjustifiably burdensome. To address those concerns, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (P.L. 115-174) relaxed certain regulations. Opponents of that legislation argue it unnecessarily pared back important safeguards, but proponents of deregulation argue additional pare backs are needed. Meanwhile, a variety of economic and technological trends continue to affect banks. As a result, the 116th Congress faces many issues related to banking, including the following: Safety and Soundness. Banks are subject to regulations designed to reduce the likelihood of bank failures. Examples include requirements to hold a certain amount of capital (which enables a bank to absorb losses without failing) and the so-called Volcker Rule (a ban on banks' proprietary trading). In addition, anti-money laundering requirements aim to reduce the likelihood banks will execute transactions involving criminal proceeds. Banks are also required to take steps to avoid becoming victims of cyberattacks. The extent to which these regulations (i) are effective, and (ii) appropriately balance benefits and costs is a matter of debate. Consumer Protection, Fair Lending, and Access to Banking. Certain laws are designed to protect consumers and ensure that lenders use fair lending practices. The Consumer Financial Protection Bureau has authorities to regulate for consumer protection. No consensus exists on whether current regulations strike an appropriate balance between protecting consumers while ensuring access to credit and justifiable compliance costs. In addition, whether Community Reinvestment Act regulations as currently implemented effectively and efficiently encourage banks to provide services in their areas of operation is an open question. Large Banks and "Too Big To Fail." Regulators also regulate for systemic risks, such as those associated with very large and complex financial institutions that may contribute to systemic instability. Dodd-Frank Act provisions include enhanced prudential regulation for certain large banks and changes to resolution processes in the event one fails. In addition, bank regulators imposed additional capital requirements on certain large, complex banks. Subsequently, some argued that certain of these additional regulations were too broadly applied and overly stringent. In response, Congress reduced the applicability of the Dodd-Frank measures and regulators have proposed changes to the capital rules. Whether relaxing these rules will provide needed relief to these banks or unnecessarily pare back important safeguards is a debated issue. Community Banks. The number of small or "community" banks has declined substantially in recent decades. No consensus exists on the degree to which regulatory burden, market forces, and the removal of regulatory barriers to interstate branching and banking are causing the decline. What Companies Should Be Eligible for Bank Charters. To operate legally as a bank, an institution must hold a charter granted by a state or federal government. Traditionally, these are held by companies generally focused on and led by people with experience in finance. However, recently companies with a focus on technology are interested in having legal status as a bank, either through a charter from the Office of the Comptroller of the Currency or a state-level industrial loan company charter. Policymakers disagree over whether allowing these companies to operate as banks would create appropriately regulated providers of financial services or inappropriately extend government-backed bank safety nets and disadvantage existing banks. Recent Market and Economic Trends. Changing economic forces also pose issues for the banking industry. Some observers argue that increases in regulation could drive certain financial activities into a relatively lightly regulated "shadow banking" sector. Innovative financial technology may alter the way certain financial services are delivered. If interest rates rise, it could create opportunities and risks. Such trends could have implications for how the financial system performs and influence debates over appropriate banking regulations.
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U.S. Code, Title 10, Section 5063, United States Marine Corps: Composition and Functions, dated October 1, 1986, states the following: The Marine Corps will be organized, trained and equipped to provide an amphibious and land operations capability to seize advanced naval bases and to conduct naval land campaigns. In this regard, the Marines are required by law to have the necessary equipment to conduct amphibious operations and land operations. The ACV and MPC were considered integral systems by the Department of Defense (DOD) and Marine Corps to meet this legal requirement, as well as providing critical capabilities to execute the nation's military strategy. On January 6, 2011, after spending approximately $3 billion in developmental funding, the Marine Corps—with "encouragement" from DOD—cancelled the Expeditionary Fighting Vehicle (EFV) program. The EFV was intended to replace the 40-year-old Amphibious Assault Vehicle (AAV), which currently transports Marines from ships to shore under hostile conditions. The Marine Corps cancelled the EFV due to excessive cost growth and poor performance in operational testing. Recognizing the need to replace the AAV, the Pentagon pledged to move quickly to develop a "more affordable and sustainable" vehicle to take the place of the EFV. The Amphibious Combat Vehicle (ACV) is intended to replace the AAV, incorporating some EFV capabilities but in a more practical and cost-efficient manner. In concert with the ACV, the Marines were developing the Marine Personnel Carrier (MPC) to serve as a survivable and mobile platform to transport Marines when ashore. At present, the Marines do not have a wheeled armored fighting vehicle that can operate as a dedicated infantry carrier with Marine maneuver forces inland. The MPC was not intended to be amphibious like an AAV, EFV, or the ACV but instead would be required to have a swim capability for inland waterways such as rivers, lakes, and other water obstacles such as shore-to-shore operations in the littorals. Because of a perceived amphibious "redundancy," some have questioned the need for both the ACV and MPC. In June 2013, citing budgetary pressures, the Marines reportedly put the MPC program "on ice" and suggested that it might not be resurrected for about 10 years. Although some have questioned why the Marines cannot simply "adopt" a U.S. Army personnel carrier, Marine requirements for a personnel carrier reflect the need for this vehicle to be compatible with amphibious assault craft, as well as to have an enhanced amphibious capability, which is not necessarily an Army requirement. With the Marines involved in decades-long land conflicts in Iraq and Afghanistan and proliferating anti-access technologies such as guided missiles, some analysts questioned whether the Marines would ever again be called on to conduct a large-scale amphibious assault operation. In response to these questions and the perceived need to examine the post-Iraq and Afghanistan Marine Corps, the Department of the Navy and DOD studied the requirement to conduct large-scale amphibious operations and in early 2012 released a strategic vision for how amphibious operations will be conducted in the future. The primary assertion of this study is that the Marine Corps' and Navy's amphibious capabilities serve a central role in the defense of the global interests of a maritime nation. The need to maintain an amphibious assault capability is viewed by Marine Corps leadership as establishing the requirement for the ACV and MPC (as discussed in greater detail below). Congress is responsible for authorizing and appropriating funds for all weapon systems programs, including the ACV. In its oversight role, Congress could be concerned about how the ACV enables the Marines to conduct not only amphibious operations but also operations ashore. Another possible congressional concern is to what extent a robust amphibious assault capability is a necessary component of U.S. national security. Cost is another issue of interest to Congress. At present, the Marines use the AAV-7A1 series amphibious assault vehicle to move Marines from ship to shore. The Marines have used the AAV since 1971 and expect to continue to use it until replaced by the ACV or a similar vehicle. Over the years, the Marines have claimed the AAV has become increasingly difficult to operate, maintain, and sustain. As weapons technology and threat capabilities have evolved since the early 1970s, the AAV—despite upgrades—is viewed as having capabilities shortfalls in the areas of water and land mobility performance, lethality, protection, and network capability. The AAV's two-mile ship-to-shore range is viewed by many as a significant survivability issue not only for the vehicle itself but also for naval amphibious forces. Although the AAV has some armor protection and can operate inland to a limited extent, it is not intended for use as an infantry combat vehicle. The Marines do have the LAV-25, Light Armored Vehicle-25, an eight-wheeled armored vehicle that carries a crew of three and six additional marines. The LAV-25 is armed with a 25 mm chain gun and a 7.62 mm machine gun but is not fully amphibious, as it cannot cross a surf zone and would get to the beach via some type of connector such as the Landing Craft, Air Cushioned (LCAC). The LAV-25 has been in service since 1983. According to the Marine Program Executive Office (PEO) Land Systems, the LAV is not employed as an armored personnel carrier and usually carries a four-person Marine scout/reconnaissance team in addition to its crew. In this regard, the MPC was viewed as necessary by Marine leadership for the transport and enhanced armor protection of Marine infantry forces. The Marines' 2011 Request for Information (RFI) to industry provides an overview of the operational requirements for the ACV. These requirements include the following: The proposed vehicle must be able to self-deploy from amphibious shipping and deliver a reinforced Marine infantry squad (17 marines) from a launch distance at or beyond 12 miles with a speed of not less than 8 knots in seas with 1-foot significant wave height and must be able to operate in seas up to 3-foot significant wave height. The vehicle must be able to maneuver with the mechanized task force for sustained operations ashore in all types of terrain. The vehicle's road and cross-country speed as well as its range should be greater than or equal to the M-1A1. The vehicle's protection characteristics should be able to protect against direct and indirect fire and mines and improvised explosive device (IED) threats. The vehicle should be able to accommodate command and control (C2) systems that permit it to operate both at sea and on land. The vehicle, at a minimum, should have a stabilized machine gun in order to engage enemy infantry and light vehicles. The Marine Corps' 2011 Request for Information (RFI) to industry provided an overview of the operational requirements for the MPC. These requirements included the following: The vehicle must accommodate nine marines and two crew members and have a "robust tactical swim capability (shore-to-shore [not designed to embark from an amphibious ship]) and be capable of operating at 6 knots in a fully developed sea." The vehicle must be able to operate on land with M-1A1s in mechanized task forces across the Marine Corps' mission profile. The vehicle shall provide protection for the occupants from the blasts, fragments, and incapacitating effects of attack from kinetic threats, indirect fire, and improvised explosive devices and mines. The vehicle shall be capable of firing existing Marine anti-structure and anti-armor missiles and should be able to accommodate existing command and control (C2) systems. Defense officials have noted the Marine Corps is "not currently organized, trained and equipped to face a peer adversary in the year 2025" and enemies with advanced air and shore defense will make amphibious operations even riskier. To counter this, the Navy is developing the Expeditionary Advance Base Operations (EABO) operational concept to address these concerns. EABO is described as follows: Expeditionary Advance Base Operations is a naval operational concept that anticipates the requirements of the next paradigm of US Joint expeditionary operations. The concept is adversary based, cost informed and advantage focused. EABO calls for an alternative, difficult to target forward basing infrastructure that will enable US naval and joint forces to create a more resilient forward based posture to persist, partner and operate within range of adversary long range precision fires. The alternative forward posture enabled by Expeditionary Advance Bases (EABs) is designed to mitigate the growing threat posed by the abundant quantity, expanded range and enhanced precision of potential adversary weaponry—particularly ballistic and cruise missiles designed to attack critical joint fixed forward infrastructure and large platforms. EABs provide a dispersed and largely mobile forward basing infrastructure that enables a persistent alternative force capability set that is similarly designed to be difficult to target and inherently resilient. The resilient, reduced signature infrastructure of EABs, combined with naval forces designed and structured to persist and operate within the arc of adversary anti-access/aerial denial (A2AD) capabilities enables naval commanders to conduct Expeditionary Advance Base Operations to support Joint Force Maritime Component Commander (JFMCC), and Fleet Commanders in the fight for sea control, by exploiting the opportunities afforded by key maritime terrain, particularly in close and confined seas. EABO advances, sustains and maintains the naval and joint sensor, shooter and sustainment capabilities of dispersed forces to leverage the decisive massed capabilities of the larger joint force with enhanced situational awareness, augmented fires and logistical support. The EABO Concept enables US naval forces to exercise 21 st Century naval operational art, meet new enemy A2AD threats with new capabilities and operate and thrive in and around close and confined seas. In terms of Marine Corps amphibious assault operations, the adoption of EABO could reportedly result in "an entirely different approach to amphibious assaults as well as new weapon systems." Noting that "missiles can now hit ships and landing craft while they are hundreds of miles from shore, making it far too dangerous for Marines to storm a beach with current capabilities," Marine officials are reportedly exploring ways to create temporary "bubbles" where Marines can get ashore. In response to these challenges, current and planned weapons systems might need to be modified to accommodate EABO operational concepts. As previously noted, in June 2013, citing budgetary pressures, the Marines reportedly put the MPC program "on ice" and suggested it might not be resurrected for about 10 years. At the time of the decision, the Marines' acquisition priorities were refocused to the ACV as well as the Joint Light Tactical Vehicle (JLTV). Although the Marines refocused budgetary resources to the ACV, difficulties in developing an affordable high water speed capability for the ACV continued to confront Marine leadership. In what was described as a "drastic shift," the Marines decided in March 2014 to "resurrect" the MPC and designate it as ACV Increment 1.1 and initially acquire about 200 vehicles. The Marines also plan to develop ACV Increment 1.2, a tracked version, and to acquire about 470 vehicles and fund an ongoing high water speed study. Although ACV Increment 1.1 will have a swim capability, a connector will be required to get the vehicles from ship to shore. Plans called for ACV Increment 1.1 to enter the acquisition cycle at Milestone B (Engineering and Manufacturing Development) in FY2016, award prototype contracts leading to a down select to one vendor in FY2018, and enter low-rate initial production. On April 23, 2014, the Marines released an RFI for ACV Increment 1.1. Some of the required capabilities included the following: ... operate in a significant wave height of two feet and sufficient reserve buoyancy to enable safe operations; a high level of survivability and force protection; operate in four to six feet plunging surf with ship-to-shore operations and launch from amphibious ships as an objective; land mobility, operate on 30 percent improved surfaces and 70 percent unimproved surfaces; ability to integrate a .50 calibre remote weapon station (RWS) with growth potential to a dual mount 40 mm/.50 calibre RWS or a 30 mm cannon RWS; carrying capacity to include three crew and 10 embarked troops as the threshold, 13 embarked troops as the objective, carry mission essential equipment and vehicle ammunition; and the ability to integrate a command, control and communications suite provided as government furnished equipment ... The RFI included a requirement for industry to deliver 16 prototype vehicles nine months after contract award in April 2016 at a rate of 4 vehicles per month. The Marines estimated ACV Increment 1.1 would cost about $5 million to $6 million per vehicle, about $10 million less than what the previous ACV version was expected to cost. On November 5, 2014, the Marines reportedly released a draft RFP for ACV Increment 1.1. The Marines were looking for information from industry regarding program milestones, delivery schedules, and where in the program cost savings could be achieved. Plans were for two companies to build 16 prototype vehicles each for testing. Companies who competed for the two contracts included BAE Systems, General Dynamics Land Systems (GDLS), Lockheed Martin, and Scientific Applications International Corporation (SAIC). Under the provisions of the RFP, the ACV 1.1 was envisioned as an eight-wheeled vehicle capable of carrying 10 Marines and a crew of 3 that would cost between $4 million to $7.5 million per copy—a change from the RFI estimate of $5 million to $6 million per vehicle. In terms of mobility, the ACV 1.1 would need to be able to travel at least 3 nautical miles from ship to shore, negotiate waves up to at least 2 feet, travel 5 to 6 knots in calm seas, and be able to keep up with the M-1 Abrams tank once ashore. Proposals were due in April 2016 and the Marines reportedly planned to award two EMD contracts for 16 vehicles each to be delivered in November 2016. In 2018, the Marines would then down select to one vendor and start full production. The Marines reportedly plan to acquire 204 ACV 1.1s, to be allocated as follows: 1 st Marine Expeditionary Force, Camp Pendleton, CA— 67 ; 2 nd Marine Expeditionary Force, Camp Lejeune, NC— 46 ; 3 rd Marine Expeditionary Force, Okinawa, Japan— 21 ; Assault Amphibian School, Camp Pendleton, CA— 25 ; Exercise Support Division, Marine Corps Air Ground Combat Center, Twenty Nine Palms, CA— 25 ; and Program Manager, Quantico, VA, and Amphibious Vehicle Test Branch, Camp Pendleton, CA— 20 . In April 2016 testimony to the Senate Armed Services Committee, the Deputy Commandant for Combat Development and Integration testified that the Marines' Acquisition Objective for the ACV 1.1 remained at 204 vehicles, which would provide lift for two infantry battalions. Full Operational Capability (FOC) for ACV 1.1 is planned for FY2020. On November 24, 2015, the Marine Corps awarded BAE Systems and SAIC contracts to develop ACV 1.1 prototypes for evaluation. BAE's contract was for $103.8 million and SAIC's for $121.5 million, and each company is to build 16 prototypes. The Marines expect to down select to a single vendor in 2018. Initial operational capability (IOC) was expected by the end of 2020, and all ACV 1.1 vehicles are planned to be fielded by summer 2023. Plans are to equip six battalions with ACV 1.1s and 392 existing upgraded AAVs. Both BAE and SAIC reportedly have a long history related to amphibious vehicles, as BAE built the Marines' original AAV and SAIC has built hundreds of Terrex 1 vehicles used by Singapore, and both companies had Marine Corps contracts to modernize AAVs. ACV 1.1 is intended to have some amphibious capability but would rely on ship-to-shore connectors. ACV 1.2 is intended to have greater amphibious capability, including greater water speed and the ability to self-deploy from amphibious ships. BAE planned to team with Italian manufacturer Iveco (which owns Chrysler and Ferrari). BAE's prototype would accommodate 13 Marines and travel 11.5 miles at about 7 miles per hour (mph) in surf and 65 mph on land. BAE's version would incorporate a V hull design intended to protect passengers from underside blasts and have external fuel tanks for increased safety. BAE intends to produce its prototypes at its York, PA, facility. SAIC planned to team with Singapore Technology Kinetics to develop its prototype based on an existing design called Terrex. SAIC's version is said to travel 7 mph in water and incorporates a V hull design as well as blast-mitigating seats. It would carry a crew of 3 and can accommodate 11 Marines. SAIC's version plans for a Common Remote Weapons System (CROWS) (.50 calibre machine gun and a 30 mm cannon), which could be operated from inside the vehicle while buttoned up, therefore not exposing crewmen to hostile fire. On December 7, 2015, it was reported that GDLS would protest the award of the ACV 1.1 contract to BAE and SAIC, claiming the Marines asked for particular capabilities and then evaluated vendors by a different set of standards. On March 15, 2016, GAO denied GDLS's protest, noting that "the Marine Corps' evaluation was reasonable and consistent with the evaluation scheme identified in the solicitation." The Marines reportedly stated that the protest put the ACV 1.1 program about 45 days behind schedule but anticipated the ACV 1.1 would still be fielded on time. BAE and SAIC reportedly delivered their ACV 1.1 prototypes, with BAE delivering its first prototype in December 2016 and SAIC delivering its prototype in February 2017. This early delivery could potentially result in an unspecified incentive fee award for both companies. EMD testing began the week of March 13 and was scheduled to last eight months. In early December 2017, the Marines reportedly sent the ACV 1.1 down select request for proposals to BAE and SAIC. Plans called for operational testing to start in January 2018, with the Marines anticipating announcing a contract winner in June 2018 for the delivery of 204 ACV 1.1s over a four-year period. In accordance with the provisions of the FY2014 National Defence Authorization Act ( P.L. 113-66 ) Section 251, GAO submitted its annual report to Congress on the ACV program in April 2018. GAO reviewed program cost estimates, updated schedules, and program assessments of test results and production readiness, and compared ACV acquisition efforts to DOD guidance and GAO-identified best practices. GAO found the following: The first version of the Amphibious Combat Vehicle (ACV 1.1) is on track to meet development cost goals with no additional anticipated delays for major acquisition milestones. With regard to costs, the development phase of ACV 1.1 is on pace to not exceed cost goals that were established at the start of development, based on a recent Navy estimate, the ACV program office, and reporting from the contractors. GAO recommended that the Marine Corps (1) not enter the second year of low rate production for ACV 1.1 until after the contractor has achieved an overall Manufacturing Readiness Level (MRL) of 8 and (2) not enter full-rate production until achieving an overall MRL of 9. DOD partially concurred with this recommendation but noted that it was "reasonable to proceed at lower MRL levels if steps are taken to mitigate risks." On June 19, 2018, the Marine Corps selected BAE Systems to produce the ACV. Reportedly, the initial contract—valued at $198 million—will be for low-rate production of 30 vehicles to be delivered by the autumn of 2019. Eventually, 204 vehicles are to be delivered under the ACV 1.1 phase of the project. BAE will also produce the ACV 1.2 variant and, all told, the entire ACV 1.1 and 1.2 project is expected to deliver 700 vehicles, and, if all options are exercised, the total contract will reportedly be worth $1.2 billion. In December 2018, the Navy reportedly awarded BAE Systems a $140 million contract modification to build 30 Low Rate Initial Production (LRIP) ACVs as part of Lot 2, with the first vehicles expected to be delivered in the summer of 2020. Lot 1 is reportedly still scheduled to start delivery in the summer of 2019. In DOT&E's December 2018 FY2018 Annual Report, it was noted During the operational evaluation (OA), the ACV-equipped unit demonstrated the ability to maneuver to an objective, conduct immediate action drills, and provide suppressive fires in support of dismounted infantry maneuver in a desert environment. The ACV-equipped unit was able to maneuver in the littorals; embark aboard a landing craft air cushioned (LCAC), transit the open ocean and surf zone, and debark from the LCAC. The ACV demonstrated water mobility and the ability to self-deploy from the beach, cross the surf zone, enter the ocean, swim, and return to the beach. Based on data from the OA, reliability is below the program reliability growth curve (58 hours Mean Time Between Operational Mission Failures [MTBOMF]). BAE vehicles demonstrated 24.9 hours MTBOMF. There were no systemic problems identified that indicate a major redesign is required. The ACV section was successful in 15 of 16 missions and demonstrated the capability to negotiate terrain in the desert and littorals, operate with tanks and light armored vehicles, and maneuver to achieve tactical advantage over the opposing threat force. ACV crews, supported infantry, and the opposing force noted that the vehicles performed better than the legacy vehicle in a wide variety of areas. In terms of recommendations, DOT&E noted the Program Manager, Advanced Amphibious Assault should do the following: Modify the infantry troop commander's station to make it easier to move between the hatch and seat. Assess the capability of all existing Marine Corps recovery assets to recover the ACV. Investigate options for preventing damage to steering/suspension when encountering battlefield debris, such as concertina wire. According to reports, the Marines envisioned that the successor to ACV 1.1—the ACV 1.2—would have a threshold requirement of 12 miles from ship-to-shore. If this threshold can be achieved, it could help to reduce the vulnerability of U.S. naval vessels supporting Marine amphibious operations to enemy shore fire. On April 10, 2019, during testimony to the Subcommittee on Seapower of the Senate Armed Services Committee, Navy and Marine Corps leadership noted During the fall of 2018, ACV 1.1 prototypes demonstrated satisfactory water mobility performance in high surf conditions, and in doing so met the full water mobility transition requirement for ACV 1.2 capability. Subsequently, the Milestone Decision Authority Assistant Secretary of the Navy for Research, Development and Acquisition (ASN (RD&A)) approved the consolidation of increments one and two into a single program to enable continuous production of ACVs to completely replace the AAV. The next key acquisition event is the Full Rate Production decision scheduled for the third quarter of FY 2020 following Initial Operational Test & Evaluation. ACV remains on schedule to achieve Initial Operational Capability in the fourth quarter of FY 2020. With the consolidation of ACV variants into a single variant, there will likely be a number of programmatic changes and potential ramifications for the ACV and ACV 2.0 programs. Reportedly, the Marines plan to develop an ACV 2.0, capable of carrying 10 to 13 Marines plus crew, capable of high water speeds and deployment from ships far from the coast. ACV 2.0 is planned to be capable of operating on land alongside tanks and light armored vehicles. According to the Marines ACV 2.0 serves as a conceptual placeholder for a future Decision Point (~ 2025, or sooner) at which time knowledge gained in the fielding and employment of the first phase of ACV (1.1 and 1.2), the state of the naval connector strategy, and science & technology work towards a high water speed capable self-deploying vehicle will support an informed decision. The FY2020 presidential budget request includes RDT&E and Procurement funding requests in the Base Budget, as well as FY2020 requested quantities. The Marines did not request ACV Overseas Contingency operations (OCO) funding in FY2020. According to DOD, the FY2020 ACV budget request will fund The ACV 1.1 Full Rate Production (FRP) Lot 3 of 56 vehicles, plus procurement of related items such as production support, systems engineering, program management, Engineering Change Orders (ECOs), Government Furnished Equipment (GFE), and integrated logistics support. Research and Development efforts include the procurement of ACV 1.2 MRV test articles, associated GFE, and initiation of a Vehicle Protective System trade study and integration efforts. While from an overall programmatic perspective, the consolidation of the ACV 1.1 and ACV 1.2 variants could be viewed as a favourable programmatic outcome, there are likely ramifications that might be of interest to policymakers. Potential issues include the following: Will the consolidation of ACV 1.1 and ACV 1.2 result in an overall cost savings? Will this consolidation permit the acquisition of additional ACVs because of potential cost savings? With the consolidation and the stated intent to replace AAVs, what is the revised timeline for the replacement of AAVs and will this result in cost savings from not having to upgrade and maintain AAVs longer than previously intended? How will the consolidation of ACV 1.1 and ACV 1.2 affect the ACV 2.0 program? If the Navy and Marine Corps decide to adopt Expeditionary Advance Base Operations (EABO) as an operational concept, it could possibly have implications for the ACV program, including the following: At the weapon systems level, would EABO require any changes to the vehicles themselves, such as enhanced survivability, lethality, or Command, Control, Communications, Computer, Intelligence, Surveillance, and Reconnaissance (C4ISR) features? If changes are required to facilitate EABO, how would this affect the program's overall acquisition timeline and cost? If EABO does not require any technical changes in the ACV program, would the adoption of EABO modify the Marines' current procurement quantities of ACVs? If EABO requires different procurement quantities for the different ACV versions (more or fewer), how might this affect program timelines and program costs?
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On January 6, 2011, after spending approximately $3 billion in developmental funding, the Marine Corps cancelled the Expeditionary Fighting Vehicle (EFV) program due to poor reliability demonstrated during operational testing and excessive cost growth. Because the EFV was intended to replace the 40-year-old Amphibious Assault Vehicle (AAV), the Pentagon pledged to move quickly to develop a "more affordable and sustainable" vehicle to replace the EFV. The Amphibious Combat Vehicle (ACV) is intended to replace the AAV, incorporating some EFV capabilities but in a more practical and cost-efficient manner. In concert with the ACV, the Marines were developing the Marine Personnel Carrier (MPC) to serve as a survivable and mobile platform to transport Marines when ashore. The MPC was not intended to be amphibious like an AAV, EFV, or the ACV but instead would be required to have a swim capability for inland waterways such as rivers, lakes, and other water obstacles such as shore-to-shore operations in the littorals. Both vehicles were intended to play central roles in future Marine amphibious operations. On June 14, 2013, Marine leadership put the MPC program "on ice" due to budgetary pressures but suggested the program might be resurrected some 10 years down the road when budgetary resources might be more favorable. In what was described as a "drastic shift," the Marines decided to "resurrect" the MPC in March 2014. The Marines designated the MPC as ACV Increment 1.1 and planned to acquire about 200 vehicles. The Marines also plan to develop ACV Increment 1.2, a tracked, fully amphibious version, and at the time planned to acquire about 470 vehicles and fund an ongoing high water speed study. Although ACV Increment 1.1 is to have a swim capability, another mode of transport (ship or aircraft) would be required to get the vehicles from ship to shore. The Marines are reportedly exploring the possibility of developing a high water speed ACV 2.0, which could accompany tanks and light armored vehicles into combat. On November 5, 2014, the Marines released a draft Request for Proposal (RFP) for ACV Increment 1.1. On November 24, 2015, the Marine Corps awarded BAE Systems and SAIC contracts to develop ACV 1.1 prototypes for evaluation. BAE's contract was for $103.8 million and SAIC's for $121.5 million, and each company was to build 16 prototypes to be tested over the next two years. Both BAE and SAIC delivered their prototypes early, and Engineering and Manufacturing Development (EMD) testing began mid-March 2017. In early December 2017, the Marines reportedly sent the ACV 1.1 down select request for proposals to BAE and Science Applications International Corporation (SAIC). On June 19, 2018, the Marine Corps selected BAE Systems to produce the ACV. The initial contract—valued at $198 million—was for low-rate production of 30 vehicles to be delivered by the autumn of 2019. On April 10, 2019, during testimony to the Senate Armed Services Committee, Navy and Marine Corps leadership announced that during the fall of 2018, ACV 1.1 prototypes demonstrated satisfactory water mobility performance in high surf conditions and, in doing so, met the full water mobility transition requirement for ACV 1.2 capability. As a result, ACV 1.1 and ACV 1.2 were to be consolidated into a single variant—the ACV—which is intended to replace all AAVs. Potential issues for Congress include the potential ramifications of the consolidation of the ACV 1.1 and ACV 1.2 programs and how the possible adoption of the Expeditionary Advance Base Operations (EABO) operational concept could affect the ACV program.
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Essentially all of the outstanding debt of the federal government is subject to a statutory limit, which is set forth as a dollar limitation in 31 U.S.C. 3101(b). From time to time, Congress considers and passes legislation to adjust or suspend this limit. Legislation adjusting the debt limit takes the form of an amendment to 31 U.S.C. 3101(b), usually striking the current dollar limitation and inserting a new one. In recent years, such legislation has taken the form of suspending the debt limit through a date certain with an increase to the dollar limit made administratively at the end of the suspension period. At the beginning of the 116 th Congress, the House adopted a standing rule that would provide for legislation suspending the statutory debt limit to be considered as passed by the House, without a separate vote, when the House adopts the budget resolution for a fiscal year. This House rule is similar to a previous one related to the debt limit (commonly referred to as the "Gephardt rule," named after its original sponsor, former Representative Richard Gephardt), which was first adopted in 1979 but was repealed at the beginning of the 112 th Congress in 2011. The House may also consider debt limit legislation without resorting to the new debt limit rule (and also did so under the former Gephardt rule) either as freestanding legislation, as part of another measure, or as part of a budget reconciliation bill. The Senate does not have (and has never had) a comparable procedure. If it chooses under the new rule to consider such debt limit legislation, it would do so under its regular legislative process. This report first explains the current House debt limit rule, particularly in relation to the former Gephardt rule. Then, it describes the legislative history of the former rule and reviews how the former rule operated before it was repealed at the beginning of the 112 th Congress. House Rule XXVIII requires that the House clerk, when the House adopts the budget resolution for a fiscal year, automatically engross and transmit to the Senate a joint resolution suspending the public debt limit through the end of that year. In other words, such legislation suspending the debt limit would be passed by the House without a separate vote on the debt limit legislation. Instead of a separate vote, the rule stipulates that the vote on the budget resolution is to be considered as the vote on the debt legislation. The new House debt limit rule differs from the former rule in two respects. First, under the new rule, the debt limit legislation is passed and sent to the Senate when the House adopts the budget resolution, not when the House and Senate agree to the budget resolution. Second, the debt legislation would suspend the debt limit, not explicitly set a new debt limit. Under the former rule, the debt limit legislation would provide for a specific new debt limit, indicating the amount by which the debt limit would be increased. In contrast, as a suspension of the debt limit, the new rule would provide for legislation that accommodates the variability of federal collections and past obligations but retain the ability of Congress to revisit the effects of such revenues and existing obligations. The current rule, as well as the former rule, does not affect the House Ways and Means Committee's exclusive jurisdiction over debt limit legislation. The full text of the current debt limit rule is provided in the Appendix . The Gephardt rule, initially codified as Rule XLIX of the Standing Rules of the House of Representatives, was established by P.L. 96-78 (93 Stat. 589-591), an act to provide for a temporary increase in the public debt limit. The House adopted the legislation ( H.R. 5369 ) by a vote of 219-198 on September 26, 1979. During consideration of the measure, Representative Gephardt explained that the purpose of the new House rule was to place the consideration of the public debt limit within the context of the overall budget policies contained in the annual budget resolution. In addition, it was intended to reduce the amount of time spent and the number of votes in the House and in committees on the issue of raising the public debt limit. One of the aggregate amounts required to be included in the annual budget resolution is the appropriate level of the public debt. The budget resolution, however, does not become law. Therefore, the enactment of subsequent legislation is necessary in order to change the statutory limit on the public debt. The Gephardt rule enables the House to combine the finalization of the budget resolution and the origination of debt limit legislation into a single step. Representative Gephardt stated that the new automatic engrossment process puts the consideration of the appropriate level for the debt ceiling where it legitimately and logically belongs. That is in the context of when we vote for the spending that creates the need to change the debt ceiling. In its original form, the rule required the engrossment of a joint resolution changing the temporary public debt limit. In 1983, the separate temporary and permanent statutory limits on the public debt were combined into one permanent statutory limit ( P.L. 98-34 ). Subsequently, the House amended the Gephardt rule to reflect this change by agreeing to H.Res. 241 (98 th Congress) by voice vote on June 23, 1983. Under the modified rule, the automatically engrossed joint resolution would contain a change to the permanent statutory limit. In addition to this modification, the rules change also provided that where a budget resolution contains more than one public debt limit figure (for the current and the next fiscal year), only one joint resolution be engrossed, containing the debt limit figure for the current fiscal year with a time limitation, and the debt limit figure for the following fiscal year as the permanent limit. During consideration of H.Res. 241 , Representative Butler C. Derrick explained the limitation of a single joint resolution by stating the following: The Committee on Rules ... believes that it is unnecessary and confusing to have ... a single concurrent resolution on the budget trigger the engrossment and passage of two separate joint resolutions to increase or decrease the public debt [limit]. At the beginning of the 106 th Congress (1999-2000), the House recodified the rule as House Rule XXIII. Certain language was deleted and modified from the existing rule, but the revisions were intended to continue the automatic engrossment process "without substantive change." The House repealed the rule at the beginning of the 107 th Congress (2001-2002). On the opening day of the 108 th Congress (2003-2004), however, the House reinstated this automatic engrossing process as a new rule, Rule XXVII. The reinstated rule contained the same language as Rule XXIII of the 106 th Congress. The rule was redesignated (without change) as Rule XXVIII during the 110 th Congress upon the enactment of the Honest Leadership and Open Government Act of 2007 ( S. 1 , P.L. 110-81 , September 14, 2007, see Section 301(a)). Finally, as noted above, the House repealed the previous rule at the beginning of the 112 th Congress (2011-2012). More recently, the House restored and revised the rule at the beginning of the 116 th Congress. Table 1 provides information on the joint resolutions changing the public debt limit that were engrossed and deemed passed by the House pursuant to the Gephardt rule during calendar years 1980-2010. The rule, however, did not operate in all of these years. In 11 of the 31 years between 1980 and 2010, the rule was either suspended (1988, 1990-1991, 1994-1997, and 1999-2000) or repealed (2001-2002) by the House. In most cases, the House suspended the rule because legislation changing the statutory limit was not necessary. At the time, the existing public debt limit was expected to be sufficient. In three cases, the House passed or was expected to pass separate legislation to increase the statutory limit. As noted above, the rule was repealed at the beginning of the 107 th Congress and therefore did not apply in 2001 and 2002. During the remaining 20 years, when the rule was in effect, the House originated 20 joint resolutions under this procedure. The first seven of these 20 joint resolutions were generated under the Gephardt rule in its original form. As mentioned above, the rule was modified in 1983. It generally remained in this form through 2010. The subsequent 13 joint resolutions were generated under this modified language. In four years (calendar years 1998, 2004, 2006, and 2010), while the rule was in effect, the House and Senate did not agree to a conference report on the budget resolution, and therefore the automatic engrossment process under the Gephardt rule was not used. As Table 1 shows, although budget resolutions adopted during this period contained debt limit amounts for between three and 11 different fiscal years—as the time frame of each budget resolution dictated—the joint resolutions automatically engrossed under the Gephardt rule contained debt limit amounts for only one or two fiscal years, depending on the requirements of the rule at the time. The 1983 modification, as noted above, provided that the automatically engrossed joint resolution could include multiple debt limit increases—one temporary and another permanent. The first three of the 11 joint resolutions automatically engrossed pursuant to this modified version of the rule contained two different public debt limits, and the other eight contained a single public debt limit. The Senate passed 16 of the 20 joint resolutions automatically engrossed pursuant to the Gephardt rule, passing 10 without amendment and six with amendments. The 10 joint resolutions passed without amendment were sent to the President and signed into law. The six joint resolutions amended by the Senate required a vote of the House before being sent to the President. Five of these ultimately became law. Of the remaining four joint resolutions, the Senate began consideration on one but came to no resolution on it, and it took no action on three. Between 1980 and 2010, a total of 47 public debt limit changes were signed into law as independent measures or as part of other legislation. The Gephardt rule originated less than a third of these changes. That is, over two-thirds of the 47 public debt limit changes enacted into law during this period originated by procedures other than the House rule, each requiring the House to vote on such legislation. However, the rule effectively allowed the House to avoid a separate, direct vote on 10 (or 21%) of the 47 measures changing the debt limit that were ultimately enacted into law. RULE XXVIII STATUTORY LIMIT ON THE PUBLIC DEBT 1. Upon adoption by the House of a concurrent resolution on the budget under section 301 or 304 of the Congressional Budget Act of 1974, the Clerk shall prepare an engrossment of a joint resolution suspending the statutory limit on the public debt in the form prescribed in clause 2. Upon engrossment of the joint resolution, the vote by which the concurrent resolution on the budget was adopted by the House shall also be considered as a vote on passage of the joint resolution in the House, and the joint resolution shall be considered as passed by the House and duly certified and examined. The engrossed copy shall be signed by the Clerk and transmitted to the Senate for further legislative action. 2. The matter after the resolving clause in a joint resolution described in clause 1 shall be as follows: 'Section 3101(b) of title 31, United States Code, shall not apply for the period beginning on the date of enactment and ending on September 30, .' with the blank being filled with the budget year for the concurrent resolution. 3. Nothing in this rule shall be construed as limiting or otherwise affecting— (a) the power of the House or the Senate to consider and pass bills or joint resolutions, without regard to the procedures under clause 1, that would change the statutory limit on the public debt; or (b) the rights of Members, Delegates, the Resident Commissioner, or committees with respect to the introduction, consideration, and reporting of such bills or joint resolutions. 4. In this rule the term 'statutory limit on the public debt' means the maximum face amount of obligations issued under authority of chapter 31 of title 31, United States Code, and obligations guaranteed as to principal and interest by the United States (except such guaranteed obligations as may be held by the Secretary of the Treasury), as determined under section 3101(b) of such title after the application of section 3101(a) of such title, that may be outstanding at any one time.
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Essentially all of the outstanding debt of the federal government is subject to a statutory limit, which is set forth as a dollar limitation in 31 U.S.C. 3101(b). From time to time, Congress considers and passes legislation to adjust or suspend this limit. At the beginning of the 116th Congress, the House adopted a standing rule that would provide for legislation suspending the statutory debt limit to be considered as passed by the House, without a separate vote, when the House adopts the budget resolution for a fiscal year. This House rule is similar to a previous one related to the debt limit (commonly referred to as the "Gephardt rule," named after its original sponsor, former Representative Richard Gephardt), which was first adopted in 1979 but was repealed at the beginning of the 112th Congress in 2011. The House may also consider debt limit legislation without resorting to the new debt limit rule (and also did so under the former Gephardt rule) either as freestanding legislation, as part of another measure, or as part of a budget reconciliation bill. The Senate does not have (and has never had) a comparable procedure. If it chooses under the new rule to consider such debt-limit legislation, it would do so under its regular legislative process. This report first explains the current House debt limit rule, particularly in relation to the former Gephardt rule. Then, it describes the legislative history of the former rule and reviews how the former rule operated before it was repealed at the beginning of the 112th Congress. Under the former Gephardt rule, in 11 of the 31 years between 1980 and 2010, the rule was either suspended (1988, 1990-1991, 1994-1997, and 1999-2000) or repealed (2001-2002) by the House. In most years in which the rule was suspended, legislation changing the statutory limit was not necessary—that is, at the time, the existing public debt limit was expected to be sufficient. During the years in which the rule applied (i.e., in the remaining 20 of the 31 years between 1980 and 2010), the rule led to the automatic engrossment of 20 House joint resolutions increasing the statutory limit on the public debt. In effect, under the rule, in these cases, the House was able to initiate legislation increasing the level of the public debt limit without a separate, direct vote on the legislation. Of these 20 joint resolutions, 15 became law. In 10 of these 15 cases, the Senate passed the measure without change, allowing it to be sent to the President for his signature without any further action by the House. In the remaining 5 cases, the Senate amended the rule-initiated legislation, requiring the House to vote on the amended legislation before it could be sent to the President. During this period, the House also originated and considered debt limit legislation without resorting to the Gephardt rule either as freestanding legislation, as part of another measure, or as part of a budget reconciliation bill. Of the 47 public debt limit changes enacted into law during the period 1980-2010, 32 were enacted without resorting to the Gephardt rule, each requiring the House to vote on such legislation. In total, between 1980 and 2010, the rule effectively allowed the House to avoid a separate, direct vote on 10 of the 47 measures changing the debt limit that were ultimately enacted into law. This report updates the previous one (dated July 27, 2015) with a description of the changes to the former rule.
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The term child nutrition programs refers to several U.S. Department of Agriculture Food and Nutrition Service (USDA-FNS) programs that provide food to children in institutional settings. The largest are the National School Lunch Program (NSLP) and School Breakfast Program (SBP), which subsidize free, reduced-price, and full-price meals in participating schools. Also operating in schools, the Fresh Fruit and Vegetable Program provides funding for fruit and vegetable snacks in participating elementary schools, and the Special Milk Program provides support for milk in schools that do not participate in NSLP or SBP. Other child nutrition programs include the Child and Adult Care Food Program, which provides meals and snacks in child care and after-school settings, and the Summer Food Service Program, which provides food during the summer months. The child nutrition programs were last reauthorized by the Healthy, Hunger-Free Kids Act of 2010 (HHFKA, P.L. 111-296 ). On September 30, 2015, some of the authorities created or extended by the HHFKA expired. However, these expirations had a minimal impact on program operations, as the child nutrition programs have continued with funding provided by annual appropriations acts. In the 114 th Congress, lawmakers began but did not complete child nutrition reauthorization, which refers to the process of reauthorizing and potentially making changes to multiple permanent statutes—the Richard B. Russell National School Lunch Act, the Child Nutrition Act, and sometimes Section 32 of the Act of August 24, 1935. Both committees of jurisdiction—the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Education and the Workforce—reported reauthorization legislation ( S. 3136 and H.R. 5003 , respectively). This legislation died at the end of the 114 th Congress, as is the case for any bill that has not yet passed both chambers and been sent to the President at the end of a Congress. There were no significant child nutrition reauthorization efforts in the 115 th Congress; however, 2018 farm bill proposals and the final enacted bill included a few provisions related to child nutrition programs. The implementation of the HHFKA, child nutrition reauthorization efforts in the 114 th Congress, and the child nutrition-related topics raised during 2018 farm bill negotiations have raised issues that may be relevant for Congress in future reauthorization efforts or other policymaking opportunities. These issues often relate to the content and type of foods served in schools: for example, the nutritional quality of foods and whether foods are domestically sourced. Other issues relate to access, including alternatives to on-site consumption in summer meals and implementation of the Community Eligibility Provision, an option to provide free meals to all students in certain schools. Stakeholders in these issues commonly include school food authorities (SFAs; school food service departments that generally operate at the school district level), hunger and nutrition-focused advocacy organizations, and food industry organizations, among others. This report provides an overview of these and other current issues in the child nutrition programs. It does not cover every issue, but rather provides a high-level review of some recent issues raised by Congress and/or program stakeholders, drawing examples from legislative proposals in the 114 th and 115 th Congresses . References to CRS reports with more detailed information or analysis on specific issues are provided where applicable, including the following: For an overview of the structure and functions of the child nutrition programs, see CRS Report R43783, School Meals Programs and Other USDA Child Nutrition Programs: A Primer . For more information on the child nutrition reauthorization proposals in the 114 th Congress, see CRS Report R44373, Tracking the Next Child Nutrition Reauthorization: An Overview . For a summary of the HHFKA, see CRS Report R41354, Child Nutrition and WIC Reauthorization: P.L. 111-296 . School meals must meet certain requirements to be eligible for federal reimbursement, including nutritional requirements. These nutrition standards were last updated following the enactment of the HHFKA, which required USDA to update the standards for school meals and create new nutrition standards for "competitive" foods (e.g., foods sold in vending machines, a la carte lines, and snack bars) within a specified timeframe. Specifically, the law required USDA to issue proposed regulations for competitive foods nutrition standards within one year after enactment and for school meals nutrition standards within 18 months after enactment. The law also provided increased federal subsidies (6 cents per lunch) for schools meeting the new requirements and funding for technical assistance. The nutrition standards in the HHFKA were championed by a variety of organizations and stakeholders, including nutrition and public health advocacy organizations, food and beverage companies, school nutrition officials, retired military leaders, and then-First Lady Michelle Obama. The precise nutritional requirements were largely written in the subsequent regulations, not the HHFKA. USDA-FNS published the final rule for school meals in January 2012 and the final rule for competitive foods in July 2016. As required by law, the nutrition standards were based on the Dietary Guidelines for Americans and recommendations from the Institute of Medicine (now the Health and Medicine Division of the National Academies). For school meals, the updated standards increased the amount of fruits, vegetables, and whole grains in school lunches and breakfasts. They also instituted limits on calories, sodium, whole grains, and proteins in meals and restricted milk to low-fat (unflavored) and fat-free (flavored or unflavored) varieties. Other requirements included a provision that senior high school students must select a half-serving of fruits or vegetables with a reimbursable meal. Similarly, the nutrition standards for competitive foods limited calories, sodium, and fat in foods sold outside of meals, among other requirements. The standards applied only to non-meal foods and beverages sold during the school day (defined as midnight until 30 minutes after dismissal) and include some exceptions for fundraisers. The meal standards began phasing in during school year (SY) 2012-2013, and the competitive foods standards took effect in SY2014-2015. However, sodium limits and certain whole grain requirements for school meals were scheduled to phase in over multiple school years. Some schools experienced challenges implementing the changes, reporting difficulty obtaining whole grain and low-sodium products, issues with student acceptance of foods, reduced participation, increased costs, and increased food waste. These accounts were shared in news stories and by the School Nutrition Association (SNA), a national, nonprofit professional and advocacy organization representing school nutrition professionals. Studies by the U.S. Government Accountability Office and USDA confirmed that many of these issues were present in SY2012-2013 and SY2013-2014, the first two years of implementation. SNA advocated for certain changes to the standards, while other groups called for maintaining the standards, arguing that they were necessary for children's health and that implementation challenges were easing with time. In January 2014, USDA removed weekly limits on grains and protein. Then, in the FY2015, FY2016, and FY2017 appropriations laws, Congress enacted provisions that loosened the milk, whole grain, and/or sodium requirements from SY2015-2016 through SY2017-2018. USDA implemented similar changes for SY2018-2019 in an interim final rule. In December 2018, USDA published a final rule that indefinitely changes these three aspects of the standards starting in SY2019-2020. Specifically, the rule allows all SFAs to offer flavored, low-fat (1%) milk as part of school meals and as beverages sold in schools, and requires unflavored milk to be offered alongside flavored milk in school meals; requires SFAs to adhere to a 50% whole grain-rich requirement (the original regulations required 100% whole grain-rich starting in SY2014-2015); states may make exemptions to allow SFAs to offer nonwhole grain-rich products; and maintains Target 1 sodium limits from SY2019-2020 through SY2023-2024, implements Target 2 limits starting in SY2024-2025 and thereafter, and eliminates Target 3 limits (the strictest target). Table 2 provides a timeline from the 2012 final rule to the 2018 final rule, showing the ways in which milk, whole grain, and sodium requirements have been modified over time. Apart from these changes, the nutrition standards for school meals remain largely intact. The changes to the milk requirements also affect other beverages sold in schools; otherwise, the nutrition standards for competitive foods have not been changed substantially. Legislative proposals related to the nutrition standards were considered in the 115 th Congress. For example, the House-passed version of 2018 farm bill (one version of H.R. 2 ) would have required USDA to review and revise the nutrition standards for school meals and competitive foods. According to the bill, the revisions would have had to ensure that the standards, particularly those related to milk, "(1) are based on research based on school-age children; (2) do not add costs in addition to the reimbursements required to carry out the school lunch program … and (3) maintain healthy meals for students." This provision was not included in the enacted bill. Child nutrition reauthorization proposals in the House and Senate during the 114 th Congress also would have altered the nutrition standards. The House committee's proposal ( H.R. 5003 ) would have required USDA to review the school meal standards at least once every three years and revise them as necessary, following certain criteria. In addition, under the proposal, fundraisers by student groups/organizations would no longer have had to meet the competitive food standards and any foods served as part of a federally reimbursable meal would have been allowed to be sold a la carte. The Senate committee's proposal ( S. 3136 ) would have required USDA to revise the whole grain and sodium requirements for school meals within 90 days after enactment. Although not included in the proposal itself, negotiations between the Senate committee, the White House, USDA, and the School Nutrition Association resulted in an agreement that these revisions, if enacted, would have reduced the 100% whole grain-rich requirement to 80% and delayed the Target 2 sodium requirement for two years. Under current law, fruit and vegetable snacks served in FFVP must be fresh. According to USDA guidance, fresh refers to foods "in their natural state and without additives." In recent years, some have advocated for the inclusion of frozen, dried, canned, and other types of fruits and vegetables in the program, while others have advocated for continuing to maintain only fresh products. Stakeholders on both sides include agricultural producers and processors. The 2014 farm bill (Section 4214 of P.L. 113-79 ) funded a pilot project that incorporated canned, dried, and frozen (CDF) fruits and vegetables in FFVP in a limited number of states. USDA selected schools in four states (Alaska, Delaware, Kansas, and Maine) that reported difficulty obtaining, storing, and/or preparing fresh fruits and vegetables. According to the final (2017) evaluation, 56% of the pilot schools chose to incorporate CDF fruits and vegetables during an average week of the demonstration. Schools most often introduced dried and canned fruits, which resulted in decreased vegetable offerings and increased fruit offerings in the FFVP. However, there was no significant impact on students' vegetable consumption, while fruit consumption declined on FFVP snack days (likely because students consumed a smaller quantity of fruit when it was dried or canned). There was also no significant impact on student participation. Student satisfaction with FFVP decreased slightly during the pilot, parents' responses to the pilot were mixed, and school administrators (who opted into the pilot) generally favored the changes. Legislative proposals to change FFVP offerings on a more permanent basis have also been considered. For example, in the 115 th Congress, the House version of H.R. 2 would have allowed CDF and puréed forms of fruits and vegetables in FFVP and removed "fresh" from the program name. This provision was not included in the enacted bill. In the 114 th Congress, child nutrition reauthorization legislation in the House ( H.R. 5003 ) included a similar proposal to allow participating schools to serve "all forms" of fruits and vegetables as well as tree nuts. The Senate committee's proposal ( S. 3136 ) would have provided temporary hardship exemptions for schools with limited storage and preparation facilities or limited access to fresh fruits and vegetables that would have allowed them to serve CDF fruits and vegetables in FFVP. Such schools would have to transition to 100% fresh products over time. Schools participating in the National School Lunch Program (NSLP) and/or School Breakfast Program (SBP) must comply with federal requirements related to sourcing foods domestically. These requirements are outlined in the school meals programs' authorizing laws and clarified in USDA guidance. Under the Buy American requirements, schools participating in the NSLP and/or SBP in the 48 contiguous states must purchase "domestic commodities or products … to the maximum extent practicable." Statute defines "domestic commodities or products" as those that are both produced and processed substantially in the United States. Accompanying conference report language elaborated that "processed substantially" means the product is processed in the United States and contains over 51% domestically grown ingredients, and this definition is also included in USDA guidance (discussed below). USDA regulations essentially restate the statutory requirement. USDA has issued guidance on how SFAs and state agencies should implement the Buy American requirements. The most recent guidance (as of the date of this report) was published in a June 2017 memorandum. According to USDA-FNS guidance, the Buy American requirements apply to any foods purchased with funds from the nonprofit school food service account, whether or not they are federal funds (children's paid lunch fees, for example, also go into the nonprofit school food service account). The guidance encourages SFAs to integrate Buy American into their procurement processes; for example, by monitoring the USDA catalog for appropriate products and placing Buy American language in solicitations, contracts, and other procurement documents. The guidance explains that SFAs are permitted to make exceptions to the Buy American requirements on a limited basis when a product "is not produced or manufactured in the U.S. in sufficient and reasonably available quantities of a satisfactory quality" or when "competitive bids reveal the costs of a U.S. product are significantly higher than the non-domestic product." SFAs must interpret when this is the case and document any exceptions they make. SFAs may also request a waiver from the requirements for a product that does not meet these criteria. State agencies must review SFAs' compliance with the Buy American requirements, including any exceptions an SFA has made, and take corrective action when necessary. The enacted 2018 farm bill (Section 4207 of P.L. 115-334 ) included a provision requiring USDA to "enforce full compliance" with the Buy American requirements and "ensure that States and school food authorities fully understand their responsibilities" within 180 days of enactment. In addition, the bill requires USDA to submit a report to Congress by the 180-day deadline on actions taken and plans to comply with the provision. The provision clarifies the definition of domestic products for the purposes of USDA's enforcement, stating that domestic products are those that are "processed in the United States and substantially contain … meats, vegetables, fruits, and other agricultural commodities" produced in the United States, the District of Columbia, Puerto Rico, or any territory or possession of the United States, or "fish harvested" in the Exclusive Economic Zone or by a U.S.-flagged vessel. The provision in the enacted bill amended a related provision in the Senate-passed version of the farm bill. Proponents of stricter requirements have cited economic and food safety reasons for domestic sourcing and expressed particular concern over sourcing from China. Others have argued for maintaining or increasing schools' discretion in food procurement, arguing that high-quality domestic options are not always available or cost-effective. Under current law, summer meals are generally provided in "congregate" or group settings where children come to eat while supervised. These meals are provided through the Summer Food Service Program (SFSP) and the National School Lunch Program's Summer Seamless Option (SSO). In recent years, policymakers have weighed different proposals and tested alternatives to congregate meals in SFSP and SSO. Some of these alternatives focus on rural areas, which may face particular barriers to onsite consumption of summer meals. According to a May 2018 study by the U.S. Government Accountability Office, states commonly reported that reaching children in rural areas was "very" or "extremely" challenging in SFSP. The 2010 Agriculture Appropriations Act (Section 749(g) of P.L. 111-80 ) provided $85 million in discretionary funding for "demonstration projects to develop and test methods of providing access to food for children in urban and rural areas during the summer months." One of these is the Summer Electronic Benefit Transfer for Children (SEBTC or Summer EBT) project, which began in summer 2011 and has continued each summer since (as of the date of this report) in a limited number of states and Indian Tribal Organizations. The project provides electronic food benefits to households with children eligible for free or reduced-price school meals. Depending on the site and year, either $30 or $60 per month is provided on an electronic benefits transfer (EBT) card for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) or Supplemental Nutrition Assistance Program (SNAP). Participants in jurisdictions providing benefits through SNAP can redeem benefits for SNAP-eligible foods at any SNAP-authorized retailer, while participants in the WIC EBT jurisdictions are limited to the smaller set of WIC-eligible foods at WIC-authorized retailers. An evaluation of Summer EBT was conducted from FY2011 through FY2013. The study, which used a random assignment design, found a significant decline in the prevalence of very low food security among participants (9.5% of control group children experienced very low food security compared to 6.4% in the Summer EBT group). It also showed improvements in children's consumption of fruits, vegetables, and whole grains. Both the WIC and SNAP models showed increased consumption, but increases were greater at sites operating the WIC model. Congress has provided subsequent funding for Summer EBT projects (see Table 3 ). Most recently, the third FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) provided $28 million for the Summer EBT demonstration. Awardees for summer 2017 were Connecticut, Delaware, Michigan, Missouri, Nevada, Oregon, Virginia, and the Chickasaw and Cherokee nations. For summer 2018, USDA also awarded grants to Tennessee and Texas. Many of these jurisdictions participated in Summer EBT in previous summers as well. In October 2018, USDA-FNS announced a new strategy for determining grant recipients in FY2019, stating that the agency will prioritize new states that have not participated before, statewide projects, and projects that can operate in the summers of 2019 through 2021. There were proposals in the 114 th and 115 th Congresses to expand Summer EBT. For example, the Senate committee's child nutrition reauthorization proposal in the 114 th Congress ( S. 3136 ) would have allowed a portion of SFSP's mandatory funding to cover Summer EBT and authorized up to $50 million in discretionary funding for the program. In addition, in its FY2017 budget proposal, the Obama Administration recommended expansion of Summer EBT nationwide with a phase-in over 10 years. Freestanding bills in the 114 th and 115 th Congresses had similar objectives. Funding from the 2010 Agriculture Appropriations Act (Section 749(g) of P.L. 111-80 ) was also used for other demonstration projects. One of these, the Enhanced Summer Food Service Program (eSFSP), took place during the summers of 2010 through 2012 in eight states. It included four initiatives: (1) incentives for SFSP sites to lengthen operations to 40 or more days, (2) funding to add recreational or educational activities at meal sites, (3) meal delivery for children in rural areas, and (4) food backpacks that children could take home on weekends and holidays. Evaluations of eSFSP were published from 2011 to 2014. Summer meal participation rates rose during the demonstration periods for all four initiatives. In addition, children in the meal delivery and backpack demonstrations had consistent rates of food insecurity from summer to fall (this was not measured for the other initiatives). However, the results from these evaluations should be interpreted with caution due to a small sample size, the lack of a comparison group, and potential confounding factors. Another demonstration project, also operating under authority provided by the 2010 Agriculture Appropriations Act, provided exemptions from the congregate feeding requirement to SFSP and SSO outdoor meal sites experiencing excessive heat each summer since 2015 (as of the date of this report). Exempted sites must continue to serve children in congregate settings on days when heat is not excessive, and provide meals in another form (e.g., a take-home form) on days of excessive heat. USDA also offers exemptions on a case-by-case basis for other extreme weather conditions. This demonstration has not been evaluated. There were other proposals and hearings related to congregate feeding in SFSP in recent years. For example, in the 114 th Congress, committee-reported child nutrition reauthorization proposals in the Senate and the House ( S. 3136 and H.R. 5003 , respectively) would have enabled some rural meal sites to provide SFSP meals for consumption offsite. Specifically, both proposals would have allowed offsite consumption for children (1) in rural areas ( H.R. 5003 to a more limited extent than S. 3136 ) and (2) in nonrural areas in which more than 80% of students are certified as eligible for free or reduced-price meals. The bills would have also permitted congregate feeding sites to provide meals to be consumed offsite episodically under certain conditions such as extreme weather or public safety concerns. The HHFKA created the Community Eligibility Provision (CEP), an option to provide free meals (lunches and breakfasts) to all students in schools with high proportions of students who automatically qualify for free or reduced-price lunches. CEP became available to schools nationwide starting in SY2014-2015, and participation has increased since then. As of SY2016-2017, more than 20,700 schools participated in CEP, according to data from the Food Research and Action Center (FRAC), a nonprofit advocacy organization. This is roughly 22% of NSLP schools. Several groups have expressed support for CEP during its implementation, arguing that the provision improves access to meals, reduces stigma associated with receiving free or reduced-price meals, and reduces schools' administrative costs. Others have sought to change the option. For example, in the 114 th Congress, the House's committee-reported child nutrition reauthorization bill ( H.R. 5003 ) would have restricted schools' eligibility for CEP, which the committee majority argued was "to better target resources to those students in need, while also ensuring all students who are eligible for assistance continue to receive assistance." One secondary effect of CEP is that it has created data issues for other nonnutrition federal and state programs. Many programs, most notably the federal Title I-A program (the primary source of federal funding for elementary and secondary schools), use free and reduced-price lunch data to determine eligibility and/or funding allocations. These data come from school meal applications, which are no longer collected under CEP's automatic eligibility determination process. For more information on this issue, see CRS Report R44568, Overview of ESEA Title I-A and the School Meals' Community Eligibility Provision . Students may qualify for free meals, or they may have to pay for reduced-price or full-price meals. In recent years, the issue of students owing and not paying their meal costs, and schools' responses to such situations, has received increased attention. In many cases, schools serve students a regular meal, charging the unpaid meal cost and creating a debt that they may try to collect later from the family. In other cases, schools respond with what some have called "lunch shaming" practices—most commonly, taking or throwing away a student's selected hot foods and providing an alternative cold meal or, less commonly, barring children from participation in school events until debt is repaid or having children wear a visual indicator of meal debt (e.g., a stamp or sticker). Lunch shaming instances have largely been reported in news articles from different states, and there are limited national data available on the prevalence of such practices (available data are discussed in the text box below). Many school districts report that unpaid meal costs create a financial burden on their meal programs (see text box below for more detail). In addition to federal funds, student payments for full and reduced-price meals are a primary source of revenue for school food programs. Schools have an interest in collecting this revenue to help fund operations. Also, according to federal regulations, if schools are unable to recover unpaid meal funds, the money becomes "bad debt" and the school or school district must use other nonfederal funding sources to cover the costs. Starting in 2010, Congress and USDA have taken actions to address the issue of unpaid meal costs. Section 143 of the HHFKA required USDA to examine states' and school districts' policies and practices regarding unpaid meal charges. As part of the review, the law required USDA to "prepare a report on the feasibility of establishing national standards for meal charges and the provision of alternate meals" and, if applicable, make recommendations related to the implementation of the standards. The law also permitted USDA to take follow-up actions based on the findings from the report. USDA's subsequent Report to Congress in June 2016 ultimately did not recommend national standards, but instead recommended "clarifying and updating policy guidance on specific national policies impacting unpaid meal charges and facilitating the development and distribution of best practices to support decision making by States and localities." USDA-FNS followed up with a memorandum requiring SFAs to institute and communicate, by July 1, 2017, a written meal charge policy, which was to include instructions on how to address situations in which a child does not pay for a meal. USDA-FNS also provided clarification through webinars, other memoranda, and a best practice guide. In the Report to Congress, USDA stated that its recommendation was based on findings from a study published by USDA-FNS in March 2014 and a Request for Information (RFI) on "Unpaid Meal Charges" published by USDA-FNS in October 2014. The findings from both the study and the RFI—which garnered 462 comments—showed that meal charge policies were largely determined at the school and school district levels rather than the state level. The responses to the RFI also indicated that such policies ranged in formality, with varying degrees of review (e.g., some required school board approval while others did not) and enforcement. In the RFI comments, school and district officials generally expressed a preference for local control of meal charge policies, while national advocacy groups generally favored national standards. The topics of lunch shaming and unpaid meal costs also surfaced in the 115 th Congress. For example, a provision in the FY2018 appropriations law stated that funds appropriated in the law could not be used in ways that result in discrimination against children eligible for free or reduced-price meals, including the practices of segregating children and overtly identifying children by special tokens or tickets (note that this does not pertain to children paying for full-price meals). Legislative proposals in the 115 th Congress included the Anti-Lunch Shaming Act of 2017 ( H.R. 2401 / S. 1064 ), which sought to establish national standards for how schools treat children unable to pay for a meal. Unpaid meal costs and lunch shaming have also been active topics at the state level. In recent years, a number of states have enacted legislation aimed at addressing these issues. For example, in 2018, Illinois passed legislation that requires schools to serve a regular (reimbursable) meal to students who do not pay and allows school districts to request an offset from the state for debts exceeding $500. The HHFKA created new requirements related to schools' pricing of paid lunches (sometimes referred to as "paid lunch equity" requirements). Specifically, the law required all NSLP-participating SFAs to review their average price of paid lunches and, if necessary, gradually increase prices based on a formula. The law also gave SFAs the option to meet the requirements with specified nonfederal funding sources instead of raising prices. According to the Senate committee report on the HHFKA, the requirements were intended "to ensure that children receiving free and reduced price lunches receive the full value of federal funds." Prior to the paid lunch equity requirements, a USDA study found that federal subsidies for free and reduced-price lunches were cross-subsidizing other aspects of the meals programs, likely including paid lunches. This can occur because federal reimbursements for free, reduced-price, and paid lunches are all mixed into the same SFA-run "nonprofit school food service account" (NSFSA). Some observers argue, however, that raising prices may reduce participation in paid lunches. Under the paid lunch equity formula, the price per paid lunch must eventually match or exceed the difference between the federal reimbursements for free and paid lunches. If this is not the case, schools must increase prices over time until they make up the difference. For example, the federal reimbursement was $3.37 for free lunches and $0.37 for paid lunches SY2018-2019 for some schools. Under the requirements, if schools were not charging at least $3.00 per paid lunch, they would be required to increase the price of a paid lunch gradually, based on a formula, until they closed the gap (see Figure 1 ). Schools cannot be required to raise the price by more than 10 cents annually, but they may choose to do so. The HHFKA also included related requirements for revenue from "nonprogram" (i.e., competitive) foods. The law required that any revenue from nonprogram foods accrue to the SFA-run NSFSA. In practice, this prevents revenue from competitive foods from being used for other school purposes outside of food service. The law also required that, broadly speaking, revenue from nonprogram foods equal or exceed the costs of obtaining nonprogram foods (see the regulations for a specific formula). In June 2011, USDA-FNS published an interim final rule implementing the requirements starting in SY2011-2012, offering some flexibility for that first year. USDA subsequently provided certain exemptions through agency guidance for SY2013-2014 through SY2017-2018 for SFAs "in strong financial standing," as determined by state agencies based on different criteria. For SY2018-2019, the enacted FY2018 appropriation (Section 775 of P.L. 115-141 ) expanded the exemptions, requiring only SFAs with a negative balance in the NSFSA as of January 31, 2018, potentially to have to raise prices for paid meals. Other legislative proposals related to the paid lunch equity requirements were considered in recent Congresses. For example, the House committee's child nutrition reauthorization proposal in the 114 th Congress would have eliminated the requirements. The Senate committee's proposal would have replaced the requirements with a broader "non-federal revenue target," which could have come from household payments for full-price lunches or other state and local contributions. CACFP: Child and Adult Care Food Program CDF: Canned, dried, or frozen CEP: Community Eligibility Provision eSFSP: Enhanced Summer Food Service Program FFVP: Fresh Fruit and Vegetable Program HHFKA: Healthy, Hunger-Free Kids Act NSFSA: Nonprofit school food service account NSLP: National School Lunch Program SBP: School Breakfast Program SFA: School food authority SFSP : Summer Food Service Program SMP: Special Milk Program SSO: Summer Seamless Option Summer EBT or SEBTC : Summer Electronic Benefit Transfer for Children SY: school year USDA-FNS: U.S. Department of Agriculture Food and Nutrition Service
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The term child nutrition programs refers to several U.S. Department of Agriculture Food and Nutrition Service (USDA-FNS) programs that provide food for children in institutional settings. These include the school meals programs—the National School Lunch Program and School Breakfast Program—as well as the Child and Adult Care Food Program, Summer Food Service Program, Special Milk Program, and Fresh Fruit and Vegetable Program. The most recent child nutrition reauthorization, the Healthy, Hunger-Free Kids Act of 2010 (HHFKA; P.L. 111-296), made a number of changes to the child nutrition programs. In some cases, these changes spurred debate during the law's implementation, particularly in regard to updated nutrition standards for school meals and snacks. On September 30, 2015, some of the authorities created by the HHFKA expired. Efforts to reauthorize the child nutrition programs in the 114th Congress, while not completed, considered several related issues and prompted further discussion about the programs. There were no substantial reauthorization attempts in the 115th Congress. Current issues discussed in this report include the following: Nutrition standards for school meals and snacks. The HHFKA required USDA to update the nutrition standards for school meals and other foods sold in schools. USDA issued final rules on these standards in 2012 and 2016, respectively. Some schools had difficulty implementing the nutrition standards, and USDA and Congress have taken actions to change certain parts of the standards related to whole grains, sodium, and milk. Offerings in the Fresh Fruit and Vegetable Program (FFVP). There have been debates recently over whether the FFVP should include processed and preserved fruits and vegetables, including canned, dried, and frozen items. Currently, statute permits only fresh offerings. "Buy American" requirements for school meals. The school meals programs' authorizing laws require schools to source foods domestically, with some exceptions, under Buy American requirements. Efforts both to tighten and loosen these requirements have been made in recent years. The enacted 2018 farm bill (P.L. 115-334) instructed USDA to "enforce full compliance" with the Buy American requirements and report to Congress within 180 days of enactment. Congregate feeding in summer meals. Under current law, children must consume summer meals on-site. This is known as the "congregate feeding" requirement. Starting in 2010, Congress funded demonstration projects, including the Summer Electronic Benefit Transfer (EBT) demonstration, to test alternatives to congregate feeding in summer meals. Congress has increased funding for Summer EBT in recent appropriations cycles and there have been discussions about whether to continue or expand the program. Implementation of the Community Eligibility Provision (CEP). The HHFKA created CEP, an option for qualifying schools, groups of schools, and school districts to offer free meals to all students. Because income-based applications for school meals are no longer required in schools adopting CEP, its implementation has created data issues for federal and state programs relying on free and reduced-price lunch eligibility data. Unpaid meal costs and "lunch shaming." The issue of students not paying for meals and schools' handling of these situations has received increasing attention. Some schools have adopted what some term as "lunch shaming" practices, including throwing away a student's selected hot meal and providing a cold meal alternative when a student does not pay. Congress and USDA have taken actions recently to reduce instances of student nonpayment and stigmatization. Paid lunch pricing. One result of new requirements in the HHFKA was price increases for paid (full price) lunches in many schools. Attempts have been made—some successfully—to loosen these "paid lunch equity" requirements in recent years.
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U.S. foreign aid is the largest component of the international affairs budget, for decades viewed by many as an essential instrument of U.S. foreign policy. Each year, the foreign aid budget is the subject of congressional debate over the size, composition, and purpose of the program. The focus of U.S. foreign aid policy has been transformed since the terrorist attacks of September 11, 2001. Global development, a major objective of foreign aid, has been cited as a third pillar of U.S. national security, along with defense and diplomacy, in the national security strategies of the George W. Bush and Barack Obama Administrations. Although the Trump Administration's National Security Strategy does not explicitly address the status of development vis-à-vis diplomacy and defense, it does note the historic importance of aid in achieving foreign policy goals and supporting U.S. national interests. This report addresses a number of the more frequently asked questions regarding the U.S. foreign aid program; its objectives, costs, and organization; the role of Congress; and how it compares to those of other aid donors. It attempts not only to present a current snapshot of American foreign assistance, but also to illustrate the extent to which this instrument of U.S. foreign policy has evolved over time. Data presented in the report are the most current, consistent, and reliable figures available, generally updated through FY2017. Dollar amounts come from a variety of sources, including the U.S. Agency for International Development (USAID) Foreign Aid Explorer database (Explorer) and annual State, Foreign Operations, and Related Programs (SFOPS) appropriations acts. As new data are obtained or additional issues and questions arise, the report will be revised. Foreign aid abbreviations used in this report are listed in Appendix B . In its broadest sense, U.S. foreign aid is defined under the Foreign Assistance Act of 1961 (FAA), the primary legislative basis of foreign aid programs, as any tangible or intangible item provided by the United States Government [including "by means of gift, loan, sale, credit, or guaranty"] to a foreign country or international organization under this or any other Act, including but not limited to any training, service, or technical advice, any item of real, personal, or mixed property, any agricultural commodity, United States dollars, and any currencies of any foreign country which are owned by the United States Government.... (§634(b)) For many decades, nearly all assistance annually requested by the executive branch and debated and authorized by Congress was ultimately encompassed in the foreign operations appropriations and the international food aid title of the agriculture appropriations. In the U.S. federal budget, these traditional foreign aid accounts have been subsumed under the 150 (international affairs) budget function. By the 1990s, however, it became increasingly apparent that the scope of U.S. foreign aid was not fully accounted for by the total of the foreign operations and international food aid appropriations. Many U.S. departments and agencies had adopted their own assistance programs, funded out of their own budgets and commonly in the form of professional exchanges with counterpart agencies abroad—the Environmental Protection Agency, for example, providing water quality expertise to other governments. These aid efforts, conducted outside the purview of the traditional foreign aid authorizing and appropriations committees, grew more substantial and varied in the mid-1990s. The Department of Defense (DOD) Nunn-Lugar effort provided billions in aid to secure and eliminate nuclear and other weapons, as did Department of Energy activities to control and protect nuclear materials—both aimed largely at the former Soviet Union. Growing participation by DOD in health and humanitarian efforts and expansion of health programs in developing countries by the National Institutes of Health and Centers for Disease Control and Prevention, especially in response to the HIV/AIDS epidemic, followed. During the past 15 years, DOD-funded and implemented aid programs in Iraq and Afghanistan to train and equip foreign forces and win hearts and minds through development efforts were often considerably larger than the traditional military and development assistance programs provided under the foreign operations appropriations. The recent decline in DOD activities in these countries has sharply decreased nontraditional aid funding. In FY2011, nontraditional sources of assistance, at $17.3 billion, represented 35% of total aid obligations. By FY2017, nontraditional aid, at $9.7 billion, represented 19% of total aid, still a significant proportion. While the executive branch has continued to request and Congress to debate most foreign aid within the parameters of the foreign operations legislation, both entities have sought to ascertain a fuller picture of assistance programs through improved data collection and reporting. Significant discrepancies remain between data available for traditional versus nontraditional types of aid and, therefore, the level of analysis applied to each. (See text box , "A Note on Numbers and Sources," below.) Nevertheless, to the extent possible, this report tries to capture the broadest definition of aid throughout. Foreign assistance is predicated on several rationales and supports a great many objectives. The importance and emphasis of various rationales and objectives have changed over time. Throughout the past 70 years, there have been three key rationales for foreign assistance National Security has been the predominant theme of U.S. assistance programs. From rebuilding Europe after World War II under the Marshall Plan (1948-1951) and through the Cold War, U.S. aid programs were viewed by policymakers as a way to prevent the incursion of communist influence and secure U.S. base rights or other support in the anti-Soviet struggle. After the Cold War ended, the focus of foreign aid shifted from global anti-communism to disparate regional issues, such as Middle East peace initiatives, the transition to democracy of eastern Europe and republics of the former Soviet Union, and international illicit drug production and trafficking in the Andes. Without an overarching security rationale, foreign aid budgets decreased in the 1990s. However, since the September 11, 2001, terrorist attacks in the United States, policymakers frequently have cast foreign assistance as a tool in U.S. counterterrorism strategy, increasing aid to partner states in counterterrorism efforts and funding the substantial reconstruction programs in Afghanistan and Iraq. As noted, global development has been featured as a key element in U.S. national security strategy in both Bush and Obama Administration policy statements. Commercial Interests. Foreign assistance has long been defended as a way to either promote U.S. exports by creating new customers for U.S. products or by improving the global economic environment in which U.S. companies compete. Humanitarian Concerns. Humanitarian concerns drive both short-term assistance in response to crisis and disaster as well as long-term development assistance aimed at reducing poverty, hunger, and other forms of human suffering brought on by more systemic problems. Providing assistance for humanitarian reasons has generally been the aid rationale most broadly supported by the American public and policymakers alike. The objectives of aid generally fit within these rationales. Aid objectives include promoting economic growth and reducing poverty, improving governance, addressing population growth, expanding access to basic education and health care, protecting the environment, promoting stability in conflictive regions, protecting human rights, promoting trade, curbing weapons proliferation, strengthening allies, and addressing drug production and trafficking. The expectation has been that, by meeting these and other aid objectives, the United States will achieve its national security goals as well as ensure a positive global economic environment for American products, and demonstrate benevolent and respectable global leadership. Different types of foreign aid typically support different objectives. But there is also considerable overlap among categories of aid. Multilateral aid serves many of the same objectives as bilateral development assistance, although through different channels. Military assistance, economic security aid—including rule of law and police training—and development assistance programs may support the same U.S. political objectives in the Middle East, Afghanistan, and Pakistan. Military assistance and alternative development programs are integrated elements of American counternarcotics efforts in Latin America and elsewhere. Depending on how they are designed, individual assistance projects can also serve multiple purposes. A health project ostensibly directed at alleviating the effects of HIV/AIDS by feeding orphan children may also stimulate grassroots democracy and civil society through support of indigenous NGOs while additionally meeting U.S. humanitarian objectives. Microcredit programs that support small business development may help develop local economies while at the same time enabling client entrepreneurs to provide food and education to their children. Water and sanitation improvements both mitigate health threats and stimulate economic growth by saving time previously devoted to water collection, raising school attendance for girls, and facilitating tourism, among other effects. In 2006, in an effort to rationalize the assistance program more clearly, the State Department developed a framework that organizes U.S. foreign aid around five strategic objectives, each of which includes a number of program elements, also known as sectors. The five objectives are Peace and Security; Investing in People; Governing Justly and Democratically; Economic Growth; and Humanitarian Assistance. Generally, these objectives and their sectors do not correspond to any one particular budget account in appropriations bills. Annually, the Department of State and USAID develop their foreign operations budget request within this framework, allowing for an objective and program-oriented viewpoint for those who seek it. An effort by the State Department to obtain reporting from all departments and agencies of the U.S. government on aid levels categorized by objective and sector is ongoing. USAID's Explorer website (explorer.usaid.gov) currently provides a more complete picture from all parts of the U.S. government (see Table 1 ). The 2006 framework introduced by the Department of State organizes assistance by foreign policy strategic objective and sector. But there are many other ways to categorize foreign aid, one of which is to sort out and classify foreign aid accounts in the U.S. budget according to the types of activities they are expected to support, using broad categories such as military, bilateral development, multilateral development, humanitarian assistance, political/strategic, and nonmilitary security activities (see Figure 1 ). This methodology reflects the organization of aid accounts within the SFOPS appropriations but can easily be applied to the international food aid title of the Agriculture appropriations as well as to the DOD and other government agency assistance programs with funding outside traditional foreign aid budget accounts. In FY2017, these many aid accounts provided $49.9 billion in obligated assistance. For FY2017, U.S. government departments and agencies obligated about $16.2 billion in bilateral development assistance, or 33% of total foreign aid, primarily through the Development Assistance (DA) and Global Health (Global Health-USAID and Global Health-State) accounts and the administrative accounts that allow USAID to operate (Operating Expenses, Capital Investment Fund, and Office of the Inspector General). Other bilateral development assistance accounts support the development efforts of distinct institutions, such as the Peace Corps, Inter-American Foundation (IAF), U.S.-African Development Foundation, Trade and Development Agency, Millennium Challenge Corporation (MCC), and National Endowment for Democracy (NED). Development assistance programs aim to foster sustainable broad-based economic progress and social stability in developing countries. This aid is managed largely by USAID and is used for long-term projects in a wide range of areas. Many programs share the objective in the State Department framework of "promoting economic growth and prosperity." Agriculture programs focus on reducing poverty and hunger, trade-promotion opportunities for farmers, and sound environmental practices for sustainable agriculture. Private sector development programs include support for business associations and microfinance services. Programs for managing natural resources and protecting the global environment focus on conserving biological diversity; improving the management of land, water, and forests; encouraging clean and efficient energy production and use; and reducing the threat of global climate change. Programs supporting the objective of "governing justly and democratically" include support for promoting rule of law and human rights, good governance, political competition, and civil society. Programs with the objective of "investing in people" include support for basic, secondary, and higher education; improving government ability to provide social services; water and sanitation; and health care. By far the largest portion of bilateral development assistance is devoted to global health. These programs include treatment of HIV/AIDS and other infectious diseases, maternal and child health, family planning and reproductive health programs, and strengthening the government health systems that provide care. Most funding for HIV/AIDS, malaria, and tuberculosis is directed through the State Department's Office of the Global AIDS Coordinator to other agencies, including USAID and the Centers for Disease Control and Prevention. The latter agency and the National Institutes for Health also conduct programs funded by Labor-Health and Human Services (HHS) appropriations. In addition to providing emergency food aid in crisis situations, a portion (about 25% in FY2017) of the Food for Peace (FFP) Title II international food aid program (also referred to as P.L. 480, named after the 1954 law that authorized it)—funded under the Agriculture appropriations—provides nonemergency food commodities to private voluntary organizations (PVOs) or multilateral organizations, such as the World Food Program, for development-oriented purposes. FFP funds are also used to support the "farmer-to-farmer" program, which sends hundreds of U.S. volunteers as technical advisors to train farm and food-related groups throughout the world. In addition, the McGovern-Dole International Food for Education and Child Nutrition Program, a program begun in 2002, provides commodities, technical assistance, and financing for school feeding and child nutrition programs. A share of U.S. foreign assistance—4% in FY2017 ($2.1 billion)—is combined with contributions from other donor nations to finance multilateral development projects. Multilateral aid is funded largely through the International Organizations and Programs (IO&P) account and individual accounts for each of the Multilateral Development Banks (MDBs) and global environmental funds. For FY2017, the U.S. government obligated $2.1 billion for development activities managed by international organizations and financial institutions, including contributions to the United Nations Children's Fund (UNICEF); the United Nations Development Program (UNDP); and MDBs, such as the World Bank. The U.S. share of donor contributions to each of the MDB concessional (subsidized) and nonconcessional (market rate) loan windows varies widely. For the largest MDB, the World Bank, the United States has contributed about 20.5% to the nonconcessional lending window (the International Development Associations [IDA]) and about 17.3% to the nonconcessional lending window (the International Bank for Reconstruction and Development [IBRD]). In determining the U.S. share of donor contributions to the various multilateral institutions, the U.S. faces the challenge of finding the right balance between the benefits of burden sharing and the constraints of sharing control when determining multilateral priorities. For FY2017, obligations for humanitarian assistance programs amounted to $8.9 billion, 18% of total assistance. Unlike development assistance programs, which are often viewed as long-term efforts that may have the effect of preventing future crises from emerging, humanitarian assistance programs are devoted largely to the immediate alleviation of human suffering in emergencies, both natural and man-made, as well as problems resulting from conflict associated with failed or failing states. The largest portion of humanitarian assistance is managed through the International Disaster Assistance (IDA) account by USAID, which provides relief and rehabilitation efforts to victims of man-made and natural disasters, such as the economic and social dislocations caused by the 2014/2015 Ebola epidemic, and the ongoing crises in Syria, South Sudan, Yemen, and Venezuela. A portion of IDA is used for food assistance through the Emergency Food Security Program. Additional humanitarian assistance goes to programs administered by the State Department and funded under the Migration and Refugee Assistance (MRA) and the Emergency Refugee and Migration Assistance (ERMA) accounts, aimed at addressing the needs of refugees and internally displaced persons. These accounts support a number of refugee relief organizations, including the U.N. High Commission for Refugees and the International Committee of the Red Cross. The Department of Defense provides disaster relief under the Overseas Humanitarian, Disaster, and Civic Assistance (OHDACA) account of the DOD appropriations. (For further information on humanitarian programs, see CRS In Focus IF10568, Overview of the Global Humanitarian and Displacement Crisis , by Rhoda Margesson.) The bulk of FFP Title II Agriculture appropriations—$1.3 billion in obligations, about 75% of total Food for Peace Act in FY2017—are used by USAID, mostly to purchase U.S. agricultural commodities, for emergency needs, supplementing both refugee and disaster programs. (For more information on food aid programs, see CRS Report R45422, U.S. International Food Assistance: An Overview , by Alyssa R. Casey.) A few accounts promote special U.S. political and strategic interests. Programs funded through the Economic Support Fund (ESF) account generally aim to promote political and economic stability, often through activities indistinguishable from those provided under regular development programs. However, ESF is also used for direct budget support to foreign governments and to support sovereign loan guarantees. For FY2017, USAID and the State Department obligated $4.8 billion, nearly 10% of total assistance, through this account. For many years, following the 1979 Camp David accords, most ESF funds went to support the Middle East Peace Process—in FY1997, for example, 87% of ESF went to Israel, Egypt, the West Bank and Jordan. Those proportions have declined significantly in recent decades. In FY2007, 22% of ESF funding went to these countries and, in FY2017, 25%. Since the September 2001 terrorist attacks, ESF has largely supported countries of importance in the U.S. global counterterrorism strategy. In FY2007, for example, activities is Afghanistan and Pakistan received 17% of ESF funding (25% in FY2017). Over the years, other accounts have been established to meet specific political or security interests and then were dissolved once the need was met. One example is the Assistance to Eastern Europe and Central Asia (AEECA) account, established in FY2009 to combine two aid programs that met particular strategic political interests arising from the demise of the Soviet empire. The SEED (Support for East European Democracy Act of 1989) and the FREEDOM Support Act (Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992) programs were designed to help Central Europe and the newly independent states of the former Soviet Union (FSA) achieve democratic systems and free market economies. With funding decreasing as countries in the region graduated from U.S. assistance, Congress discontinued use of the AEECA account in the FY2013 appropriations. Increasing requests and appropriations for countries in the former Soviet Union threatened by Russia, however, led to its re-emergence in the FY2017 and succeeding SFOPS appropriations. In the recent past, several DOD-funded nontraditional aid programs directed at Afghanistan also supported development efforts. The Afghanistan Infrastructure Fund and the Business Task Force wound down as the U.S. military presence in that country declined; the Commander's Emergency Response Program (CERP) still exists. The latter two programs had earlier iterations as well in Iraq. Several U.S. government agencies support programs to address global concerns that are considered threats to U.S. security and well-being, such as terrorism, illicit narcotics, crime, and weapons proliferation. In the past two decades, policymakers have given greater weight to these programs. In FY2017, they amounted to $2.9 billion, 6% of total assistance Since the mid-1990s, three U.S. agencies—State, DOD, and Energy—have provided funding, technical assistance, and equipment to counter the proliferation of chemical, biological, radiological, and nuclear weapons. Originally aimed at the former Soviet Union under the rubric cooperative threat reduction (CTR), these programs seek to ensure that these weapons are secured and their spread to rogue nations or terrorist groups prevented. In addition to nonproliferation efforts, the Nonproliferation, Anti-Terrorism, Demining and Related Programs (NADR) account, managed by the State Department, encompasses civilian anti-terrorism efforts such as detecting and dismantling terrorist financial networks, establishing watch-list systems at border controls, and building developing country anti-terrorism capacities. NADR also funds humanitarian demining programs. The State Department is the main implementer of counternarcotics programs. The State-managed International Narcotics Control and Law Enforcement (INCLE) account supports counternarcotics activities, most notably in Afghanistan, Pakistan, Peru, and Colombia. It also helps develop the judicial systems—assisting judges, lawyers, and legal institutions—of many developing countries, especially in Afghanistan. DOD and USAID also support counternarcotics activities, the former largely by providing training and equipment, the latter by offering alternative crop and employment programs. The United States provides military assistance to U.S. friends and allies to help them acquire U.S. military equipment and training. At $14.5 billion, military assistance accounted for about 29% of total U.S. foreign aid in FY2017. The Department of State administers three programs, with corresponding appropriations accounts that are then implemented by DOD. Foreign Military Financing (FMF) is a grant program that enables governments to receive equipment and associated training from the U.S. government or to access equipment directly through U.S. commercial channels. Most FMF grants support the security needs of Israel, Egypt, Jordan, Pakistan, and Iraq. The International Military Education and Training program (IMET) offers military training on a grant basis to foreign military officers and personnel. Peacekeeping funds (PKO) are used to support voluntary non-U.N. peacekeeping operations as well as training for an African crisis response force. Since 2002, DOD appropriations have supported FMF-like programs, training and equipping security forces in Afghanistan and Iraq. These programs and the accounts that fund them are called the Afghanistan Security Forces Fund (ASFF) and, through FY2012, the Iraq Security Forces Fund (ISFF). Beginning in FY2015, similar support was provided Iraq under the Iraq Train and Equip Fund. The DOD-funded programs in Afghanistan and Iraq accounted for more than half of total military assistance in FY2017. How and in what form assistance reaches an aid recipient can vary widely, depending on the type of aid program, the objective of the assistance, and the agency responsible for providing the aid. Federal agencies may implement foreign assistance programs using funds appropriated directly to them or funds transferred to them from another agency. For example, significant funding appropriated through State Department and Department of Agriculture accounts is used for programs implemented by USAID (see Figure 2 ). The funding data in this section reflect the agency that implemented the aid, not necessarily the agency to which funds were originally appropriated. For 50 years, USAID has implemented the bulk of the U.S. bilateral economic development and humanitarian assistance. It directly implements the Development Assistance, International Disaster Assistance, and Transition Initiatives accounts, as well as a USAID-designated portion of the Global Health account. Jointly with the State Department, USAID co-manages ESF, AEECA, and Democracy Fund programs, which frequently support development activities as a means of promoting U.S. political and strategic goals. Based on historical averages, according to USAID, the agency implements more than 90% of ESF, 70% of AEECA, 40% of the Democracy Fund, and about 60% of the Global HIV/AIDS funding appropriated to the State Department. USAID also implements all Food for Peace Act Title II food assistance funded through agriculture appropriations. USAID obligated an estimated $20.55 billion to implement foreign assistance programs and activities in FY2017. The agency's staff in 2018 totaled 9,747 , of which about 67% were working overseas, overseeing the implementation of hundreds of projects undertaken by thousands of private sector contractors, consultants, and nongovernmental organizations. DOD implements all SFOPS-funded military assistance programs—FMF, IMET, PKO, and PCCF—in conjunction with the policy guidance of the Department of State. The Defense Security Cooperation Agency is the primary DOD body responsible for these programs. DOD also carries out an array of state-building activities, funded through defense appropriations legislation, which are usually in the context of training exercises and military operations. These sorts of activities, once the exclusive jurisdiction of civilian aid agencies, include development assistance to Iraq and Afghanistan through the Commander's Emergency Response Program (CERP), the Iraq Relief and Reconstruction Fund, and the Afghanistan Infrastructure Fund, and elsewhere through the Defense Health Program, counterdrug activities, and humanitarian and disaster relief. Training and equipping of Iraqi and Afghan police and military, though similar in nature to some traditional security assistance programs, has been funded and implemented primarily through DOD appropriations, though implementing the Iraq police training program was a State Department responsibility from 2012 until it was phased out in 2013. In FY2017, the Department of Defense implemented an estimated $14.50 billion in foreign assistance programs. The Department of State manages and co-manages a wide range of assistance programs. It is the lead U.S. civilian agency on security and refugee related assistance, and has sole responsibility for implementing the International Narcotics and Law Enforcement (INCLE) and Nonproliferation, Antiterror, and Demining (NADR) accounts, the two Migration and Refugee accounts (MRA and ERMA), and the International Organizations and Programs (IO&P) account. State is also home to the Office of the Global AIDS Coordinator (OGAC), which manages the State Department's portion of Global Health funding in support of HIV/AIDS programs, though many of these funds are transferred to and implemented by USAID, the National Institutes of Health, and the Centers for Disease Control and Prevention. In conjunction with USAID, the State Department manages the Economic Support Fund, AEECA assistance to the former communist states, and Democracy Fund accounts. For these accounts, the State Department largely sets the overall policy and direction of funds, while USAID implements the preponderance of programs. In addition, the State Department, through its Bureau of Political-Military Affairs, has policy authority over the Foreign Military Financing (FMF), International Military Education and Training (IMET), and Peacekeeping Operations (PKO) accounts, and, while it was active, the Pakistan Counterinsurgency Capability Fund (PCCF). These programs are implemented by the Department of Defense. Police training programs have traditionally been the responsibility of the International Narcotics and Law Enforcement (INL) Office in the State Department, though programs in Iraq and Afghanistan were implemented and paid for by the Department of Defense for several years. State is also the organizational home to the Office of U.S. Foreign Assistance Resources (formerly the Office of the Director of Foreign Assistance), known as "F," which was created in 2006 to coordinate U.S. foreign assistance programs. The office establishes standard program structures and definitions, as well as performance indicators, and collects and reports data on State Department and USAID aid programs. The State Department implemented about $7.66 billion in foreign assistance funding in FY2017, though it has policy authority over a much broader range of assistance funds. The U.S. Department of Health and Human Services implements a range of global health programs through its various component institutions. As an implementing partner in the President's Emergency Plan for Aids Relief (PEPFAR), a large portion of HHS foreign assistance activity is related to HIV prevention and treatment, including technical support and preventing mother to child transmission of HIV/AIDS. The Centers for Disease Control and Prevention participates in a broad range of global disease control activity, including rapid outbreak response, global research and surveillance, information technology assistance, and field epidemiology and laboratory training. The National Institutes of Health (NIH) also conduct international health research that is reported as assistance. In FY2017, HHS institutions implemented $2.66 billion in foreign assistance activities. The Department of the Treasury's Under Secretary for International Affairs administers U.S. contributions to and participation in the World Bank and other multilateral development institutions. In this case, the agency manages the distribution of funds to the institutions, but does not implement programs. Presidentially appointed U.S. executive directors at each of the banks represent the United States' point of view. Treasury also deals with foreign debt reduction issues and programs, including U.S. participation in the Highly Indebted Poor Countries (HIPC) initiative, and manages a technical assistance program offering temporary financial advisors to countries implementing major economic reforms and combating terrorist finance activity. For FY2017, the Department of the Treasury managed foreign assistance valued at about $1.85 billion. Created in February 2004, the Millennium Challenge Corporation (MCC) seeks to concentrate significantly higher amounts of U.S. resources in a few low- and lower-middle-income countries that have demonstrated a strong commitment to political, economic, and social reforms relative to other developing countries. A significant feature of the MCC effort is that recipient countries formulate, propose, and implement mutually agreed multi-year U.S.-funded project plans known as compacts. Compacts in the 27 recipient countries selected to date have emphasized construction of infrastructure. The MCC is a U.S. government corporation, headed by a chief executive officer who reports to a board of directors chaired by the Secretary of State. The Corporation maintains a relatively small staff of about 300. The MCC obligated about $1.01 billion in FY2017. A number of other government agencies play a role in implementing foreign aid programs. The Peace Corps, an autonomous agency with FY2017 obligations of $445 million, supports about 7,300 volunteers in 65 countries. Peace Corps volunteers work in a wide range of educational, health, and community development projects. The Trade and Development Agency (TDA), which obligated $58 million in FY2017, finances trade missions and feasibility studies for private sector projects likely to generate U.S. exports. The Overseas Private Investment Corporation (OPIC) provides political risk insurance to U.S. companies investing in developing countries and finances projects through loans and guarantees. Its insurance activities have been self-sustaining, but credit reform rules require a relatively small appropriation to back up U.S. guarantees and for administrative expenses. The Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), signed into law in October 2018 ( P.L. 115-254 ), authorized consolidation of OPIC and USAID's Development Credit Authority into a new U.S. International Development Finance Corporation (IDFC), which is expected to become operational in fall 2019. For FY2017, as for most prior years, OPIC receipts exceeded appropriations, resulting in a net gain to the Treasury. The Inter-American Foundation and the African Development Foundation, obligating $25.8 million and $20.2 million, respectively, in FY2017, finance small-scale enterprise and grassroots self-help activities aimed at assisting poor people. Most U.S. assistance is now provided as a grant (gift) rather than a loan, so as not to increase the heavy debt burden carried by many developing countries. However, the forms a grant may take are diverse. The most common type of U.S. development aid is project-based assistance (77% in FY2017), in which aid is channeled through an implementing partner to complete a project. Aid is also provided in the form of core contribution to international organizations such as the United Nations, technical assistance, and direct budget support (cash transfer) to governments. A portion of aid money is also spent on administrative costs ( Figure 3 ). Within these categories, aid may take many forms, as described below. Although it is the exception rather than the rule, some countries receive aid in the form of a cash grant to the government. Dollars provided in this way support a government's balance-of-payments situation, enabling it to purchase more U.S. goods, service its debt, or devote more domestic revenues to developmental or other purposes. Cash transfers have been made as a reward to countries that have supported the United States' counterterrorism operations (Turkey and Jordan in FY2004), to provide political and strategic support (both Egypt and Israel annually for decades after the 1979 Camp David Peace Accord), and in exchange for undertaking difficult political and economic reforms. Assistance may be provided in the form of food commodities, weapons systems, or equipment such as generators or computers. Food aid may be provided directly to meet humanitarian needs or to encourage attendance at a maternal/child health care program. Weapons supplied under the military assistance program may include training in their use. Equipment and commodities provided under development assistance are usually integrated with other forms of aid to meet objectives in a particular social or economic sector. For instance, textbooks have been provided in both Afghanistan and Iraq as part of a broader effort to reform the educational sector and train teachers. Computers may be offered in conjunction with training and expertise to fledgling microcredit institutions. Since PEPFAR was first authorized in 2004, antiretroviral drugs (ARVs) provided to individuals living with HIV/AIDS have been a significant component of commodity-based assistance. Although once a significant portion of U.S. assistance programs, construction of economic infrastructure—roads, irrigation systems, electric power facilities, etc.—was rarely provided after the 1970s. Because of the substantial expense of these projects, they were to be found only in large assistance programs, such as that for Egypt in the 1980s and 1990s, where the United States constructed major urban water and sanitation systems. The aid programs in Iraq and Afghanistan supported the building of schools, health clinics, roads, power plants, and irrigation systems. In Iraq alone, more than $10 billion went to economic infrastructure. Economic infrastructure is now also supported by U.S. assistance in a wider range of developing countries through the Millennium Challenge Corporation. In this case, recipient countries design their own assistance programs, most of which, to date, include an infrastructure component. Transfer of knowledge and skills is a significant part of most assistance programs. The International Military Education and Training Program (IMET) provides training to officers of the military forces of allied and friendly nations. Tens of thousands of citizens of aid recipient countries receive short-term technical training or longer-term degree training annually under USAID programs. More than one-quarter of Peace Corps volunteers are English, math, and science teachers. Other aid programs provide law enforcement personnel with anti-narcotics or anti-terrorism training. Many assistance programs provide expert advice to government and private sector organizations. The Department of the Treasury, USAID, and U.S.-funded multilateral banks all place specialists in host government ministries to make recommendations on policy reforms in a wide variety of sectors. USAID has often placed experts in private sector business and civic organizations to help strengthen them in their formative years or while indigenous staff are being trained. While most of these experts are U.S. nationals, in Russia, USAID funded the development of locally staffed political and economic think tanks to offer policy options to that government. USAID, the Inter-American Foundation, and the African Development Foundation often provide aid in the form of small grants directly to local organizations to foster economic and social development and to encourage civic engagement in their communities. Grants are sometimes provided to microcredit organizations, such village-level women's savings groups, which in turn provide loans to microentrepreneurs. Small grants may also address specific community needs. Recent IAF grants, for example, have supported organizations that help resettle Salvadoran migrants deported from the United States and youth programs in Central America aimed at gang prevention. Under the Foreign Assistance Act of 1961, the President may determine the terms and conditions under which most forms of assistance are provided. In general, the financial condition of a country—its ability to meet repayment obligations—has been an important criterion of the decision to provide a loan or grant. Some programs, such as humanitarian and disaster relief programs, were designed from the beginning to be entirely grant activities. During the past two decades, nearly all foreign aid—military as well as economic—has been provided in grant form. While loans represented 32% of total military and economic assistance between 1962 and 1988, this figure declined substantially beginning in the mid-1980s, until by FY2001, loans represented less than 1% of total aid appropriations. The de-emphasis on loan programs came largely in response to the debt problems of developing countries. Both Congress and the executive branch have generally supported the view that foreign aid should not add to the already existing debt burden carried by these countries. In the FY2019 budget request, the Trump Administration encouraged the use of loans over grants when providing military assistance (Foreign Military Financing), but Congress did not include language in support of that proposal in the enacted FY2019 appropriation ( P.L. 116-6 ). Although a small proportion of total current aid, there are significant USAID-managed programs that guarantee loans, meaning the U.S. government agrees to pay a portion of the amount owed in the case of a default on a loan. A Development Credit Authority (DCA) loan guarantee, in which risk is shared with a private sector bank, can be used to increase access to finance in support of any development sector. The DCA is to be transferred from USAID in 2019 to the new IDFC, established by the BUILD Act of 2018 ( P.L. 115-254 ), to enhance U.S. development finance capacity. Under the Israeli Loan Guarantee Program, the United States has guaranteed repayment of loans made by commercial sources to support the costs of immigrants settling in Israel from other countries and may issue guarantees to support economic recovery. USAID has also provided loan guarantees in recent years to improve the terms or amounts of financing from international capital markets for Ukraine and Jordan. In these cases, assistance funds representing a fraction of the guarantee amount are provided to cover possible default. Between 1946 and 2016, the United States loaned $112.7 billion in foreign economic and military aid to foreign governments, and while most foreign aid is now provided through grants, $9.18 billion in loans to foreign governments remained outstanding at the end of FY2016. For nearly three decades, Section 620q of the Foreign Assistance Act (the Brooke amendment) has prohibited new assistance to the government of any country that falls more than one year past due in servicing its debt obligations to the United States, though the President may waive application of this prohibition if he determines it is in the national interest. The United States has also forgiven debts owed by foreign governments and encouraged, with mixed success, other foreign aid donors and international financial institutions to do likewise. In some cases, the decision to forgive foreign aid debts has been based largely on economic grounds as another means to support development efforts by heavily indebted, but reform-minded, countries. The United States has been one of the strongest supporters of the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). These initiatives, which began in the late 1990s, include participation of the World Bank, the International Monetary Fund, and other international financial institutions in a comprehensive debt workout framework for the world's poorest and most debt-strapped nations. The largest and most hotly debated debt forgiveness actions have been implemented for much broader foreign policy reasons with a more strategic purpose. Poland, during its transition from a communist system and centrally planned economy (1990—$2.46 billion); Egypt, for making peace with Israel and helping maintain the Arab coalition during the Persian Gulf War (1990—$7 billion); and Jordan, after signing a peace accord with Israel (1994—$700 million), are examples. Similarly, the United States forgave about $4.1 billion in outstanding Saddam Hussein-era Iraqi debt in November 2004 and helped negotiate an 80% reduction in Iraq's debt to creditor nations later that month. Most development and humanitarian assistance activities are not directly implemented by U.S. government personnel but by private sector entities, such as individual personal service contractors, consulting firms, universities, private voluntary organizations (PVOs), or public international organizations (PIOs). Generally speaking, U.S. government foreign service and civil servants determine the direction and priorities of the aid program, allocate funds while keeping within legislative requirements, ensure that appropriate projects are in place to meet aid objectives, select implementers, and monitor the implementation of those projects for effectiveness and financial accountability. Both USAID and the State Department have promoted the use of public-private partnerships, in which private entities such as corporations and foundations are contributing partners, not paid implementers, in situations where business interests and development objectives coincide. In FY2017, the United States provided some form of bilateral foreign assistance to more than 150 countries. Aid is concentrated heavily in certain countries, reflecting the priorities and interests of United States foreign policy at the time. Table 2 identifies the top 15 recipients of U.S. foreign assistance for FY1997, FY2007 and FY2017. As shown in the table above, there are both similarities and sharp differences among country aid recipients for the three periods. The most consistent thread connecting the top aid recipients over the past two decades has been continuing U.S. strategic interests in the Middle East, with large programs maintained for Israel and Egypt and, for Iraq, following the 2003 invasion. Two key countries in the U.S. counterterrorism strategy, Afghanistan and Pakistan, made their first appearances on the list in FY2002 and continued to be among the top recipients in FY2017. In FY1997, one sub-Saharan African country appeared among leading aid recipients; in FY2017, 7 of the 15 are sub-Saharan African. Many are focus countries under the PEPFAR initiative to address the HIV/AIDS epidemic; South Sudan receives support as a newly independent country with multiple humanitarian and development needs. In FY1997, three countries from Eastern Europe and the former Soviet Union made the list, as many from the region had for much of the 1990s, representing the effort to transform the former communist nations to democratic societies and market-oriented economies. None of those countries appear in the FY2017 list. In FY1997, four Latin American countries make the list; no countries from the region appear in FY2017. On a regional basis, the Middle East/North Africa (MENA) region has received the largest share of U.S. foreign assistance for many decades. Although economic aid to the region's top two recipients, Israel and Egypt, began to decline in the late 1990s, the dominant share of bilateral U.S. assistance consumed by the MENA region was maintained in FY2005 by the war in Iraq. Despite the continued importance of the region, its share slipped substantially by FY2017 as the effort to train and equip Iraqi forces diminished. Since September 11, 2001, South and Central Asia has emerged as a significant target of U.S. assistance, rising from a roughly 3% share 20 years ago to 16% in FY2007 and 15% in FY2017, largely because of aid to Afghanistan and Pakistan. Similarly, the share represented by African nations has increased from 10% and 19%, respectively, in FY1997 and FY2007, to 25% in FY2017, largely due to the HIV/AIDS initiative that funnels resources mostly to African countries and to a range of other efforts to address the region's development challenges. Meanwhile, the share of aid to Europe/Eurasia, which greatly surpassed that of Africa in FY1997, has declined significantly in the past decade, to about 4% in FY2017, with the graduation of many East European aid recipients and the termination of programs in Russia. The Ukraine was responsible for about one third of aid to that region in FY2017. East Asia/Pacific has remained at a low level during the past two decades, while Latin America's share has risen and fallen based on U.S. interest in Colombia and a few Central American countries as aid has shifted to regions of more pressing strategic interest (see Figure 4 ). There are several methods commonly used for measuring the amount of federal spending on foreign assistance. Amounts can be expressed in terms of budget authority (funds appropriated by Congress), obligations (amounts contractually committed), outlays or disbursements (money actually spent). Assistance levels are also sometimes measured as a percentage of the total federal budget, as a percentage of total discretionary budget authority (excluding mandatory and entitlement programs), or as a percentage of the gross domestic product (GDP) (for an indication of the national wealth allocated to foreign aid). By nearly all of these measures, foreign aid resources fell gradually on average over several decades since the historical high levels of the late 1940s and early 1950s ( Appendix A ). This downward trend was sporadically interrupted, largely due to major foreign policy initiatives such as the Alliance for Progress for Latin America beginning in 1961, the infusion of funds to implement the Camp David Middle East Peace Accords in 1979, and an increase in military assistance to Egypt, Turkey, Greece and others in the mid-1980s. The lowest point in U.S. foreign aid spending since World War II came in 1997, when foreign assistance obligations fell to just above $20 billion (in 2017 dollar terms). ( Figure 5 ) While foreign aid consistently represented just over 1% of U.S. annual gross domestic product in the decade following World War II, it fell gradually to between 0.2% and 0.4% for most years in the past three decades. Foreign assistance spending has comprised, on average, around 3% of discretionary budget authority and just over 1% of total budget authority each year since 1977, though the percentages have sometimes varied considerably from year to year. Foreign aid dropped from 5% of discretionary budget authority in 1979 to 2.4% in 2001, before rising sharply in conjunction with U.S. activities in Afghanistan and Iraq starting in 2003. As a portion of total budget authority, foreign assistance reached 2.5% in 1979, but has hovered below 1.5% since 1987. In 2017, foreign assistance was estimated to account for 4.1% of discretionary budget authority and 1.2% of total budget authority ( Figure 6 ; Appendix A ). As previously discussed, since the September 11, 2001, terrorist attacks, foreign aid funding has been closely tied to U.S. counterterrorism strategy, particularly in Iraq, Afghanistan, and Pakistan. Bush and Obama Administration global health initiatives, the creation of the Millennium Challenge Corporation, and growth in counter-narcotics activities have driven funding increases as well. The Budget Control Act of 2011, and the drawdown of U.S. military forces in Iraq, and to some degree Afghanistan, led to a notable dip in aid obligations in FY2013, but aid levels have risen again with efforts to address the crisis in Syria, counter-ISIL activities, and humanitarian aid. The use of the Overseas Contingency Operations (OCO, discussed below) designation has enabled this growth despite the BCA limitations. Figure 7 shows how trends in foreign aid funding in recent decades can be attributed to specific foreign policy events and presidential initiatives. The Obama Administration's FY2012 international affairs budget proposed that the overseas contingency operations (OCO) designation, which had been applied since 2009 to war-related Defense appropriations, including to DOD assistance programs such as ISFF, ASFF and CERP, be extended to include "extraordinary, but temporary, costs of the Department of State and USAID in the front line states of Iraq, Afghanistan and Pakistan." Congress not only adopted the OCO designation in the FY2012 SFOPS appropriations legislation, but expanded it to include funding for additional accounts and countries. In every fiscal year since, a portion of certain foreign assistance accounts—primarily ESF, FMF, IDA, MRA and INCLE—has been appropriated with the OCO designation. The OCO designation is significant because the Budget Control Act of 2011 (BCA), which set annual caps on discretionary funding from FY2013 through FY2021, specified that funds designated as OCO do not count toward the discretionary spending limits established by the act. OCO designation makes it possible to prevent war-related funding from crowding out core international affairs activities within the budget allocation. The OCO approach is reminiscent of the use of supplemental international affairs appropriations for the first decade after the September 11, 2001, terrorist attacks. Congress appropriated significant emergency supplemental funds for foreign operations and Defense assistance programs every year from FY2002 through FY2010 for activities in Iraq, Afghanistan, and elsewhere, which were not counted toward subcommittee budget allocations. Since the OCO designation was first applied to foreign operations in FY2012, supplemental appropriations for foreign aid have declined significantly. In the FY2019 and FY2020 budget requests, the Trump Administration did not request OCO funding within the international affairs budget, but did request OCO funding for the Department of Defense, including for DOD aid accounts. Congress used the OCO designation for both DOD and State/USAID accounts in the FY2019 appropriation, P.L. 116-6 , but a smaller portion of aid was designated as OCO compared to FY2018. It remains to be seen whether this is the beginning of a downward trend in OCO use for foreign aid. Congress historically sought to enhance the domestic benefits of foreign aid by requiring that most U.S. foreign aid be used to procure U.S. goods and services. The conditioning of aid on the procurement of goods and services from the donor-country is sometimes called "tied aid," and while quite common for much of the history of modern foreign assistance, has become increasingly disfavored in the international community. Studies have shown that tying aid increases the costs of goods and services by 15%-30% on average, and up to 40% for food aid, reducing the overall effectiveness of aid flows. The United States joined other donor nations in committing to reduce tied aid in the Paris Declaration on Aid Effectiveness in March 2005, and the portion of tied aid from all donors fell from 70% of total bilateral development assistance in 1985 to an average of 12% in 2016. However, an estimated 32% of U.S. bilateral development assistance was tied in 2016, the highest percentage among major donors, perhaps reflecting the perception of policymakers that maintaining public and political support for foreign aid programs requires ensuring direct economic benefit to the United States. About 67% of U.S. foreign assistance funds in FY2017 were obligated to U.S.-based entities. A considerable amount of U.S. foreign assistance funds remain in the United States, through domestic procurement or the use of U.S. implementers, but the portion differs by program and is hard to identify with any accuracy. For some types of aid, the legislative requirements or program design make it relatively easy to determine how much aid is spent on U.S. goods or services, while for others, this is more difficult to determine. USAID. Most USAID funding (Development Assistance, Global Health, Economic Support Fund) is implemented through contracts, grants, and cooperative agreements with implementing partners. While many implementing partner organizations are based in the United States and employ U.S. citizens, there is little information available about what portion of the funds used for program implementation are used for goods and services provided by American firms. Procurement reform efforts initiated by USAID in 2010 have aimed to increase procurement and implementation by host country entities as a means to enhance country ownership, build local capacity, and improve sustainability of aid programs. Food assistance commodities, until recently, were purchased wholly in the United States, and generally required by law to be shipped by U.S. carriers, suggesting that the vast majority of food aid expenditures are made in the United States. Starting in FY2009, a small portion of food assistance was authorized to be purchased locally and regionally to meet urgent food needs more quickly. Successive Administrations and several Members of Congress have proposed greater flexibility in the food aid program, potentially increasing aid efficiency but reducing the portion of funds flowing to U.S. farmers and shippers. To date, these proposals have been largely unsuccessful. Foreign Military Financing , with the exception of certain assistance allocated to Israel, is used exclusively to procure U.S. military equipment and training. Millennium Challenge Corporation. The MCC bases its procurement regulations on those established by the World Bank, which calls for an open and competitive process, with no preference given to donor country suppliers. Between FY2011 and FY2017, the MCC awarded roughly 15% of the value of compact contracts to U.S. firms. Multilateral development aid. Multilateral aid funds are mixed with funds from other nations and the bulk of the program is financed with borrowed funds rather than direct government contributions. Information on the U.S. share of procurement financed by MDBs is unavailable. In addition to the direct benefits derived from aid dollars used for American goods and services, many argue that the foreign aid program brings significant indirect financial benefits to the United States. For example, analysts maintain that provision of military equipment through the military assistance program and food commodities through the Food for Peace program helps to develop future, strictly commercial, markets for those products. More broadly, as countries develop economically, they are in a position to purchase more goods from abroad and the United States benefits as a trade partner. Since an increasing majority of global consumers are outside of the United States, some business leaders assert that establishing strong economic and trade ties in the developing world, using foreign assistance as a tool, is key to U.S. economic and job growth. Since World War II, with the exception of several years between 1989 and 2001, during which Japan ranked first among aid donors, the United States has led the developed countries in net disbursements of economic aid, or "Official Development Assistance (ODA)" as defined by the Organization for Economic Cooperation and Development's (OECD) Development Assistance Committee (DAC). In 2017, the most recent year for which data are available, the United States disbursed $34.12 billion in ODA, or about 24% of the $144.71 billion in total net ODA disbursements by DAC donors that year. Germany ranked second at $24.16 billion, the United Kingdom followed at $18.59 billion, Japan ranked fourth at $11.85 billion, and France rounded out the top donors with $11.03 billion in 2017 (see Figure 8 ). While the top five donors have not varied for more than a decade, there have been shifts lower down the ranking. For example, Turkey has become a much more prominent ODA donor in recent years (ranked 6 th in 2017, with $9.08 billion in ODA, compared to 21 st in 2006), reflecting large amounts of humanitarian aid to assist Syrian refugees. Even as it leads in dollar amounts of aid flows to developing countries, the United States often ranks low when aid is calculated as a percentage of gross national income (GNI). This calculation is often cited in the context of international donor forums, as a level of 0.7% GNI was established as a target for donors in the 2000 U.N. Millennium Development Goals. In 2017, the United States ranked at the bottom among major donors at 0.18% of GNI, slightly lower than Portugal and Spain (0.18% and 0.19%, respectively). The United Arab Emirates, which has significantly increased its reported ODA in recent years, ranked first among top donors at 1.03% of GNI, followed by Sweden at 1.02% and Luxembourg at 1.00%. There has also been an increase in ODA from non-DAC countries. Between 2000 and 2014, China spent $81.1 billion in ODA, more than tripling its ODA commitments during this period. While reported Chinese ODA is still relatively small compared to that of major donor countries, policymakers are paying increasing attention to growing Chinese investments in developing countries that do not meet the ODA definition. China has touted its "Belt and Road" initiative as an effort to boost development and connectivity across as many as 125 countries to create "strategic propellers" for its own development. However, China has provided little official aggregate information on the initiative, including on the number of projects, countries involved, the terms of financing, and metrics for success. Numerous congressional authorizing committees and appropriations subcommittees maintain responsibility for U.S. foreign assistance. Several committees have responsibility for authorizing legislation establishing programs and policy and for conducting oversight of foreign aid programs. In the Senate, the Committee on Foreign Relations, and in the House, the Committee on Foreign Affairs, have primary jurisdiction over bilateral development assistance, political/strategic and other economic security assistance, military assistance, and international organizations. Food aid, primarily the responsibility of the Agriculture Committees in both bodies, is periodically shared with the Foreign Affairs Committee in the House. U.S. contributions to multilateral development banks are within the jurisdiction of the Senate Foreign Relations Committee and the House Financial Services Committee. The large nontraditional aid programs funded by DOD, such as Nunn-Lugar Cooperative Threat Reduction programs and the military aid programs in Afghanistan and Iraq, come under the jurisdiction of the Armed Services Committees. Some global health assistance, such as research and other activities done by the Centers for Disease Control and Prevention, may fall under the jurisdiction of the House Energy and Commerce and Senate HELP committees. Traditionally, most foreign aid appropriations fall under the jurisdiction of the SFOPS Subcommittees, with food assistance appropriated by the Agriculture Subcommittees. As noted earlier, however, certain military, global health, and other activities that have been reported as foreign aid have been appropriated through other subcommittees in recent years, including the Defense and the Labor, Health and Human Services, Education and Related Agencies subcommittees. (For current information on SFOPS Appropriations legislation, see CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations , by Susan B. Epstein, Marian L. Lawson, and Cory R. Gill.) The most significant permanent foreign aid authorization laws are the Foreign Assistance Act of 1961, covering most bilateral economic and security assistance programs (P.L. 87-195; 22 U.S.C. 2151); the Arms Export Control Act (1976), authorizing military sales and financing (P.L. 90-629; 22 U.S.C. 2751); the Agricultural Trade Development and Assistance Act of 1954 (P.L. 480), covering food aid (P.L. 83-480; 7 U.S.C. 1691); and the Bretton Woods Agreement Act (1945), authorizing U.S. participation in multilateral development banks (P.L. 79-171; 22 U.S.C. 286). In the past, Congress usually scheduled debates every two years on omnibus foreign aid legislation that amended these permanent authorization measures. Congress has not enacted into law a comprehensive foreign assistance authorization measure since 1985, although foreign aid authorizing bills have passed the House or Senate, or both, on numerous occasions. Foreign aid bills have frequently stalled at some point in the debate because of controversial issues, a tight legislative calendar, or executive-legislative foreign policy disputes. In contrast, DOD assistance is authorized in annual National Defense Authorization legislation. In lieu of approving a broad State Department/USAID authorization bill, Congress has on occasion authorized major foreign assistance initiatives for specific regions, countries, or aid sectors in stand-alone legislation or within an appropriation bill. Among these are the SEED Act of 1989 ( P.L. 101-179 ; 22 U.S.C. 5401); the FREEDOM Support Act of 1992 ( P.L. 102-511 ; 22 U.S.C. 5801); the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( P.L. 108-25 ; 22 U.S.C. 7601); the Tom Lantos and Henry J. Hyde United States Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008 ( P.L. 110-293 ); the Millennium Challenge Act of 2003 (Division D, Title VI of P.L. 108-199 ); the Enhanced Partnership With Pakistan Act of 2009 ( P.L. 111-73 ; 22 U.S.C. 8401); the Global Food Security Act of 2016 ( P.L. 114-195 ; 22 U.S.C. 9306), and the BUILD Act ( P.L. 115-254 ). In the absence of regular enactment of foreign aid authorization bills, appropriation measures considered annually within the SFOPS spending bill have assumed greater significance for Congress in influencing U.S. foreign aid policy. Not only do appropriations bills set spending levels each year for nearly every foreign assistance account, SFOPS appropriations also incorporate new policy initiatives that would otherwise be debated and enacted as part of authorizing legislation. Appendix A. Data Table Appendix B. Common Foreign Assistance Abbreviations
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Foreign assistance is the largest component of the international affairs budget and is viewed by many as an essential instrument of U.S. foreign policy. On the basis of national security, commercial, and humanitarian rationales, U.S. assistance flows through many federal agencies and supports myriad objectives. These include promoting economic growth, reducing poverty, improving governance, expanding access to health care and education, promoting stability in conflict regions, countering terrorism, promoting human rights, strengthening allies, and curbing illicit drug production and trafficking. Since the terrorist attacks of September 11, 2001, foreign aid has increasingly been associated with national security policy. At the same time, many Americans and some Members of Congress view foreign aid as an expense that the United States cannot afford given current budget deficits. In FY2017, U.S. foreign assistance, defined broadly, totaled an estimated $49.87 billion, or 1.2% of total federal budget authority. About 44% of this assistance was for bilateral economic development programs, including political/strategic economic assistance; 35% for military aid and nonmilitary security assistance; 18% for humanitarian activities; and 4% to support the work of multilateral institutions. Assistance can take the form of cash transfers, equipment and commodities, infrastructure, or technical assistance, and, in recent decades, is provided almost exclusively on a grant rather than loan basis. Most U.S. aid is implemented by nongovernmental organizations rather than foreign governments. The United States is the largest foreign aid donor in the world, accounting for about 24% of total official development assistance from major donor governments in 2017 (the latest year for which these data are available). Key foreign assistance trends in the past decade include growth in development aid, particularly global health programs; increased security assistance directed toward U.S. allies in the anti-terrorism effort; and high levels of humanitarian assistance to address a range of crises. Adjusted for inflation, annual foreign assistance funding over the past decade was the highest it has been since the Marshall Plan in the years immediately following World War II. In FY2017, Afghanistan, Iraq, Israel, Jordan, and Egypt received the largest amounts of U.S. aid, reflecting long-standing aid commitments to Israel and Egypt, the strategic significance of Afghanistan and Iraq, and the strategic and humanitarian importance of Jordan as the crisis in neighboring Syria continues. The Near East region received 27% of aid allocated by country or region in FY2017, followed by Africa, at 25%, and South and Central Asia, at 15%. This was a significant shift from a decade prior, when Africa received 19% of aid and the Near East 34%, reflecting significant increases in HIV/AIDS-related programs concentrated in Africa between FY2007 and FY2017 and the drawdown of U.S. military forces in Iraq and Afghanistan. Military assistance to Iraq began to decline starting in FY2011, but growing concern about the Islamic State in Iraq and Syria (ISIS) has reversed this trend. This report provides an overview of the U.S. foreign assistance program by answering frequently asked questions on the subject. It is intended to provide a broad view of foreign assistance over time, and will be updated periodically. For more current information on foreign aid funding levels, see CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations, by Susan B. Epstein, Marian L. Lawson, and Cory R. Gill.
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The low-income housing tax credit (LIHTC) was created by the Tax Reform Act of 1986 ( P.L. 99-514 ) to provide an incentive for the development and rehabilitation of affordable rental housing. These federal housing tax credits are awarded to developers of qualified projects via a competitive application process administered by state housing finance authorities (HFAs). Developers either use the credits or sell them to investors to raise capital for real estate projects, which, in turn, reduces the debt or equity contribu tion that would otherwise be required of developers. With lower financing costs, tax credit properties can potentially expand the supply of affordable rental housing. The LIHTC is estimated to cost the government an average of $9.9 billion annually. Two types of LIHTCs are available depending on the nature of the construction project. The so-called 9% credit is generally reserved for new construction, while the so-called 4% credit is typically used for rehabilitation projects and new construction that is financed with tax-exempt bonds. Each year, for 10 years, a tax credit equal to roughly 4% or 9% of a project's qualified basis (cost of construction) is claimed. The applicable credit rates have historically not actually been 4% and 9%. Instead, the credit rates have fluctuated in response to market interest movements so that the program has delivered a subsidy equal to 30% of the present value of a project's qualified basis in the case of the 4% credit, and 70% in the case of the 9% credit. For both the 4% and 9% credit it is the subsidy levels (30% or 70%) that are explicitly specified in the Internal Revenue Code (IRC), not the credit rates. Since 1986, the 4% rate has ranged between 3.15% and 3.97%, and the 9% credit between 7.35% and 9.27%. Since 2008, however, there has been a floor under the 9% credit below which the new construction credit rate cannot fall. A simplified example may help in understanding how the LIHTC program is intended to encourage affordable housing development. Consider a new affordable housing apartment complex with a qualified basis of $1 million. Since the project involves new construction it will qualify for the 9% credit and generate a stream of tax credits equal to $90,000 (9% × $1 million) per year for 10 years, or $900,000 in total. Under the appropriate interest rate the present value of the $900,000 stream of tax credits should be equal to $700,000, resulting in a 70% subsidy. The subsidy is intended to incentivize the development of affordable housing that otherwise may not be financially feasible or attractive relative to alternative investments. The situation would be similar if the project involved rehabilitated construction except the developer would be entitled to a stream of tax credits equal to $40,000 (4% × $1 million) per year for 10 years, or $400,000 in total. The present value of the $400,000 stream of tax credits should be equal to $300,000, resulting in a 30% subsidy. The process of allocating, awarding, and then claiming the LIHTC is complex and lengthy. The process begins at the federal level with each state receiving an annual LIHTC allocation in accordance with federal law. State housing agencies then allocate credits to developers of rental housing according to federally required, but state created, allocation plans. The process typically ends with developers selling allocated credits to outside investors in exchange for equity. A more detailed discussion of each level of the allocation process is presented below. LIHTCs are first allocated to each state according to its population. In 2019, states received an LIHTC allocation of $2.75625 per person, with a minimum small population state allocation of $3,166,875. These amounts reflect a temporary increase in the amount of credits each state received as a result of the 2018 Consolidated Appropriations Act ( P.L. 115-141 ). The increase is equal to 12.5% above what states would have received absent P.L. 115-141 , and is in effect through 2021. The state allocation limits do not apply to the 4% credits which are automatically packaged with tax-exempt bond financed projects. The administration of the tax credit program is typically carried out by each state's Housing Finance Agency (HFA). State HFAs allocate credits to developers of rental housing according to federally required, but state created, Qualified Allocation Plans (QAPs). Federal law requires that the QAP give priority to projects that serve the lowest-income households and that remain affordable for the longest period of time. Many states have two allocation periods per year. Developers apply for the credits by proposing plans to state agencies. Types of developers include nonprofit organizations, for-profit organizations, joint ventures, partnerships, limited partnerships, trusts, corporations, and limited liability corporations. An allocation to a developer does not imply that all allocated tax credits will be claimed. An allocation simply means tax credits are set aside for a developer. Once a developer receives an allocation it has several years to complete its project. Credits may not be claimed until a project is completed and occupied, also known as "placed in service." Tax credits that are not allocated by states are added to a national pool and then redistributed to states that apply for the excess credits. To be eligible for an excess credit allocation, a state must have allocated its entire previous allotment of tax credits. This use-or-lose feature gives states an incentive to allocate all of their tax credits to developers. In order to be eligible for an LIHTC allocation, properties are required to meet certain tests that restrict both the amount of rent that is assessed to tenants and the income of eligible tenants. Historically, the "income test" for a qualified low-income housing project has required project owners to irrevocably elect one of two income level tests, either a 20-50 test or a 40-60 test. In order to satisfy the first test, at least 20% of the units must be occupied by individuals with income of 50% or less of the area's median gross income, adjusted for family size. To satisfy the second test, at least 40% of the units must be occupied by individuals with income of 60% or less of the area's median gross income, adjusted for family size. The 2018 Consolidated Appropriations Act ( P.L. 115-141 ) added a third income test option that allows owners to average the income of tenants. Specifically, under the income averaging option, the income test is satisfied if at least 40% of the units are occupied by tenants with an average income of no greater than 60% of AMI, and no individual tenant has an income exceeding 80% of AMI. Thus, for example, renting to someone with an income equal to 80% of AMI would also require renting to someone with an income no greater than 40% of AMI, so the tenants would have an average income equal to 60% of AMI. In addition to the income test, a qualified low-income housing project must also meet the "gross rents test" by ensuring rents do not exceed 30% of the elected 50% or 60% of area median gross income, depending on which income test option the project elected. The types of projects eligible for the LIHTC are apartment buildings, single-family dwellings, duplexes, and townhouses. Projects may include more than one building. Tax credit project types also vary by the type of tenants served. Housing can be for families or special needs populations including the elderly. Enhanced LIHTCs are available for difficult development areas (DDAs) and qualified census tracts (QCTs) as an incentive to developers to invest in more distressed areas: areas where the need is greatest for affordable housing, but which can be the most difficult to develop. In these distressed areas, the LIHTC can be claimed for 130% (instead of the normal 100%) of the project's total cost excluding land costs. This also means that available credits can be increased by up to 30%. HERA ( P.L. 110-289 ) enacted changes that allow an HFA to classify any nontax exempt bond financed LIHTC project as difficult to develop, and hence, eligible for the enhanced credit. Upon receipt of an LIHTC allocation, developers typically exchange the tax credits for equity. For-profit developers can either retain tax credits as financing for projects or sell them to investors; nonprofit developers sell tax credits. Taxpayers claiming the tax credits are usually investors, not developers. The tax credits cannot be claimed until the real estate development is complete and operable. This means that more than a year or two could pass between the time of the tax credit allocation and the time the credit is claimed. If, for example, a project were completed in July of 2018, depending on the filing period of the investor, the tax credits may not begin to be claimed until sometime in 2019. Trading tax credits, or selling them, refers to the process of exchanging tax credits for equity investment in real estate projects. Developers recruit investors to provide equity to fund development projects and offer the tax credits to those investors in exchange for their commitment. When credits are sold, the sale is usually structured with a limited partnership between the developer and the investor, and sometimes administered by syndicators who must adhere to the complex provisions of the tax code. As the general partner, the developer has a very small ownership percentage but maintains the authority to build and run the project on a day-to-day basis. The investor, as a limited partner, has a large ownership percentage with an otherwise passive role. Syndicators charge a fee for overseeing the investment transactions. Typically, investors do not expect their equity investment in a project to produce income. Instead, investors look to the credits, which will be used to offset their income tax liabilities, as their return on investment. The return investors receive is determined in part by the market price of the tax credits. The market price of tax credits fluctuates, but in normal economic conditions the price typically ranges from the mid-$0.80s to low-$0.90s per $1.00 tax credit. The larger the difference between the market price of the credits and their face value ($1.00), the larger the return to investors. The investor can also receive tax benefits related to any tax losses generated through the project's operating costs, interest on its debt, and deductions such as depreciation. The type of tax credit investor has changed over the life of the LIHTC. Upon the introduction of the LIHTC in 1986, public partnerships were the primary source of equity investment in tax credit projects, but diminished profit margins have driven some syndicators out of the retail investment market. Although there are individual tax credit investors, in recent years, the vast majority of investors have come from corporations, either investing directly or through private partnerships. Different types of investors have different motivations for investing in tax credits. Some investors are motivated by the Community Reinvestment Act (CRA), which considers LIHTC investments favorably. Other investors include real estate, insurance, utility, and manufacturing firms, many of which list the rate of return on investment as their primary purpose for investing in tax credits. Tax sheltering is the second-most highly ranked purpose for investing. The LIHTC finances part of the total cost of many projects rather than the full cost and, as a result, must be combined with other resources. The financial resources that may be used in conjunction with the LIHTC include conventional mortgage loans provided by private lenders and alternative financing and grants from public or private sources. Individual states provide financing as well, some of which may be in the form of state tax credits modeled after the federal provision. Additionally, some LIHTC projects may have tenants who receive other government subsidies such as housing vouchers. In late 2017, there was a revision to the Internal Revenue Code ( P.L. 115-97 ) that substantially changed the federal tax system. The revision did not directly alter the LIHTC program; however, the reduction in corporate taxes, along with the limits on deducting net operating losses that were part of the act, led affordable housing advocates at the time to voice concern about a reduction in the demand for LIHTCs. Most recently, the 2018 Consolidated Appropriations Act ( P.L. 115-141 ) made two changes to the LIHTC program. As was discussed in the " The Allocation Process " section, the act modified the so-called "income test" to allow for income averaging across tenants, and also increased the amount of credits available to states each year by 12.5% for years 2018 through 2021. These changes may have helped alleviate some concerns stemming from the 2017 tax revision's potential effect on LIHTC development. Still, it is not yet clear what, if any, impact there may be on the affordable housing supply in the long run as the result of these recent changes to the federal tax code.
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The low-income housing tax credit (LIHTC) program is one of the federal government's primary policy tools for encouraging the development and rehabilitation of affordable rental housing. These nonrefundable federal housing tax credits are awarded to developers of qualified rental projects via a competitive application process administered by state housing finance authorities. Developers typically sell their tax credits to outside investors in exchange for equity in the project. Selling the tax credits reduces the debt developers would otherwise have to incur and the equity they would otherwise have to contribute. With lower financing costs, tax credit properties can potentially offer lower, more affordable rents. The LIHTC is estimated to cost the government an average of approximately $9.9 billion annually. In late 2017, there was a revision to the Internal Revenue Code (P.L. 115-97) that substantially changed the federal tax system. The revision did not directly alter the LIHTC program; however, there had been early reports of downward pressure on tax credit demand stemming from the 2017 tax revision. Most recently, the 2018 Consolidated Appropriations Act (P.L. 115-141) made two changes to the LIHTC program. First, the act modified the so-called "income test," which determines the maximum income an LIHTC tenant may have. Previously, each individual tenant was required to have an income below one of two threshold options (either 50% or 60% of area median gross income, depending on an election made by the property owner). With the modification, property owners may use a third income test option that allows them to average the income of tenants when determining whether the income restriction is satisfied. Second, the act also increased the amount of credits available to states each year by 12.5% for years 2018 through 2021. This report will be updated as warranted by legislative changes.
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Social Security, which paid about $989 billion in benefits in 2018, is the largest program in the federal budget in term s of outlays. There are currently about 63 million Social Security beneficiaries. Most Social Security beneficiaries are retired or disabled workers, whose monthly benefits depend on their past earnings, their age, and other factors. Benefits are also paid to workers' dependents and survivors, based on the earnings of the workers upon whose work record they claim. Social Security has a significant impact on beneficiaries, both young and old, in terms of income support and poverty reduction. Under current law, Social Security's revenues are projected to be insufficient to pay full scheduled benefits after 2035. For both of those reasons, Social Security is of ongoing interest to policymakers. Most proposals to change Social Security outlays would change the benefit computation rules. Evaluating such proposals requires an understanding of how benefits are computed under current law. A person who has a sufficient history of earnings in employment subject to Social Security payroll taxes becomes insured for Social Security, which makes the worker and qualified dependents eligible for benefits. Insured status is based on the number of quart ers of coverage (QCs) earned. In 2019, a worker earns one QC for each $1,360 of earnings, and a worker may earn up to four QCs per calendar year. The amount needed for a QC increases annually by the growth in average earnings in the economy, as measured by Social Security's average wage index. To be eligible for most benefits, workers must be fully insured , which requires one QC for each year elapsed after the worker turns 21 years old, with a minimum of 6 QCs and a maximum of 40 QCs. A worker is first eligible for Social Security retirement benefits at 62, so to be eligible for retirement benefits, a worker must generally have worked for 10 years. Workers are permanently insured when they are fully insured and will not lose fully insured status when they stop working under covered employment, for example, if a worker has the maximum 40 QCs. Benefits may be paid to eligible survivors of workers who were fully insured at the time of death. Some dependents are also eligible if the deceased worker was currently insured , which requires earning 6 QCs in the 13 quarters ending with the quarter of death. To be eligible for disability benefits, workers must also satisfy a recency of work requirement. Workers aged 31 and older must have earned 20 QCs in the 10 years before becoming disabled. Fewer QCs are required for younger workers. In the case of workers having work history in multiple countries, international totalization agreements allow workers who divide their careers between the United States and certain countries to fill gaps in Social Security coverage by combining work credits under each country's system to qualify for benefits under one or both systems. The first step of computing a benefit is determining a worker's average indexed monthly earnings (AIME), a measure of a worker's past earnings. Rather than using the amounts earned in past years directly, the AIME computation process first updates past earnings to account for growth in overall economy-wide earnings. That is done by increasing each year of a worker's taxable earnings after 1950 by the growth in average earnings in the economy, as measured by the national average wage index, from the year of work until two years before eligibility for benefits, which for retired workers is at 62. For example, the Social Security average wage grew from $32,155 in 2000 to $41,674 in 2010. So if a worker earned $20,000 in 2000 and turned 60 in 2010, the indexed wage for 2000 would be $20,000 x ($41,674/$32,155), or $25,921. Earnings from later years—for retired workers, at ages 61 and above—are not indexed. For retired workers, the AIME equals the average of the 35 highest years of indexed earnings, divided by 12 (to change from an annual to a monthly measure). Those years of earnings are known as computation years . If the person worked fewer than 35 years in employment subject to Social Security payroll taxes, the computation includes some years of zero earnings. In the case of workers who die before turning 62 years old, the number of computation years is generally reduced below 35 by the number of years until he or she would have reached 62. For example, the AIME for a worker who died at 61 is based on 34 computation years. For disabled workers, the number of computation years depends primarily on the age at which they become disabled, increasing from 2 years for those aged 24 or younger to 35 years for those aged 62 or older. The next step in determining a benefit is to compute the primary insurance amount (PIA) by applying a benefit formula to the AIME. First, the AIME is sectioned into three brackets (or segments) of earnings, which are divided by dollar amounts known as bend points. In 2019, the bend points are $926 and $5,583. Those amounts are indexed to the national average wage index, so they generally increase each year. Three factors, which are fixed by law at 90%, 32%, and 15%, are applied to the three brackets of AIME. For workers with AIMEs of $926 or less in 2019, the PIA is 90% of the AIME. Because the other two factors are lower, that share declines as AIMEs increase, which makes the benefit formula progressive. For workers who become eligible for retirement benefits, become disabled, or die in 2019, the PIA is determined as shown in the example in Table 1 and in Figure 1 . Benefits are based on covered earnings. Earnings up to the maximum taxable amount ($132,900 in 2019) are subject to the Social Security payroll tax. If a worker earns the maximum taxable earnings in every year of a full work history and becomes eligible in 2019, the maximum PIA is $2,861. In the AIME computation, earnings are indexed to the average wage index, and the bend points in the benefit formula are indexed to growth in the average wage index. As a result, replacement rates—the portion of earnings that benefits replace—remain generally stable. That is, from year to year, the average benefits that new beneficiaries receive increase at approximately the same rate as average earnings in the economy. A cost-of-living adjustment (COLA) is applied to the benefit beginning in the second year of eligibility, which for retired workers is age 63. The COLA applies even if a worker has not yet begun to receive benefits. The COLA usually equals the growth in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one calendar year to the third quarter of the next year. Beneficiaries will receive a COLA of 2.8% for benefits paid in January 2019. The full retirement age (FRA, also called the normal retirement age) is the age at which a worker can receive the full PIA, increased by any COLAs. The FRA was 65 for people born before 1938, but the Social Security Amendments of 1983 ( P.L. 98-21 ) raised the FRA for those born later, as shown in Table 2 . Retired workers may claim benefits when they turn 62 years old, but the longer that they wait, the higher their monthly benefit. The higher monthly benefit is intended to offset the fewer number of payments that people who delay claim will receive over their lifetimes, so that the total value of lifetime benefits is approximately the same regardless of when they claim based on average life expectancy. The permanent reduction in monthly benefits that applies to people who claim before the FRA is called an actuarial reduction. It equals 6⅔% per year for the first three years of early claim and 5% for additional years. The permanent increase in monthly benefits that applies to those who claim after the FRA is called the delayed retirement credit. For people born in 1943 and later, that credit is 8% for each year of delayed claim after the FRA, up to age 70. For people with an FRA of 66, therefore, monthly benefits are 75% of the PIA for those who claim benefits at the age of 62 and 132% of the PIA for people who wait until the age of 70 to claim (see Figure 2 ). Because people who claim earlier receive more payments over a lifetime, the overall effect of claiming at different ages depends on how long the beneficiary lives. For example, someone who dies at 71 years old would be better off claiming early, but someone who survives to 95 would be better off claiming late. An increase in the FRA can result in lower benefits in two ways. First, monthly benefits will be different for individuals who have identical work histories and the same age of claiming benefits, but who have different FRAs. For example, someone with an FRA of 66 and who claims at age 62 will receive a monthly benefit equal to 75% of the PIA. For someone with an FRA of 67, claiming at 62 will result in a monthly benefit that is 70% of the PIA. Depending on the claim age, the scheduled increase in the FRA from 66 to 67 will reduce monthly benefits by between 6.1% and 7.7%. Second, lifetime benefits will be different for workers who have identical work histories and identical age of death, but different FRAs. For example, consider two workers who have FRAs of 65 and 67, respectively, both of whom claim at their FRA, and thus receive identical monthly benefits. If both workers die at age 75, the worker with an FRA of 65 will have received monthly benefits for 10 years, compared with the worker with an FRA of 67, who will have received monthly benefits for 8 years. Social Security benefits are payable to the spouse, divorced spouse, or dependent child of a retired or disabled worker and to the widow(er), divorced widow(er), dependent child, or parent of a deceased worker. When dependent beneficiaries also earned worker benefits, they receive the larger of the worker or the dependent benefit. A spouse's base benefit (that is, before any adjustments) equals 50% of the worker's PIA. A widow(er)'s base benefit is 100% of the worker's PIA. The base benefit for children of a retired or disabled worker is 50% of the worker's PIA, and the base benefit for children of deceased workers is 75% of the worker's PIA. Other benefit adjustments apply in certain situations, notably the windfall elimination provision (WEP), which reduces benefits for worker beneficiaries who have pensions from employment that was not subject to Social Security payroll taxes; the government pension offset (GPO), which reduces Social Security spousal benefits paid to people who have pensions from employment that was not subject to Social Security payroll taxes; the retirement earnings test , which results in a withholding of monthly Social Security benefits paid to beneficiaries who are younger than the full retirement age and have earnings above a certain level; and the maximum family benefit , which limits the amount of benefits payable to a family based on a worker's record. In some cases, a portion of Social Security benefits may be subject to federal income tax. Taxation is not a benefit adjustment, but it does affect the net income of beneficiaries. For additional information, see CRS Report RL32552, Social Security: Calculation and History of Taxing Benefits .
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Social Security, the largest program in the federal budget (in terms of outlays), provides monthly cash benefits to retired or disabled workers and their family members as well as to the family members of deceased workers. In 2018, benefit outlays were approximately $989 billion, with roughly 63 million beneficiaries and 176 million workers in Social Security-covered employment. Under current law, Social Security's revenues are projected to be insufficient to pay full scheduled benefits after 2035. Monthly benefit amounts are determined by federal law. Social Security is of ongoing interest both because of its role in supporting a large portion of the population and because of its long-term financial imbalance, and policymakers have considered numerous proposals to change its benefit computation rules. The Social Security benefits that are paid to worker beneficiaries and to workers' dependents and survivors are based on workers' past earnings. The computation process involves three main steps First, a summarized measure of lifetime earnings is computed. That measure is called the average indexed monthly earnings (AIME). Second, a benefit formula is applied to the AIME to compute the primary insurance amount (PIA). The benefit formula is progressive. As a result, workers with higher AIMEs receive higher Social Security benefits, but the benefits received by people with lower earnings replace a larger share of past earnings. Third, an adjustment may be made based on the age at which a beneficiary chooses to begin receiving payments. For retired workers who claim benefits at the full retirement age (FRA) and for disabled workers, the monthly benefit equals the PIA. Retired workers who claim earlier receive lower monthly benefits, and those who claim later receive higher benefits. Retired worker benefits can be affected by other adjustments. For example, the windfall elimination provision can reduce benefits for individuals who receive a pension from non-Social Security-covered earnings, and benefits can be withheld under the retirement earnings test if an individual continues to work and earns above a certain amount. Although not an adjustment, Social Security benefits can be subject to income tax, thereby affecting the beneficiary's net income. Benefits for eligible dependents and survivors are based on the worker's PIA. For example, a dependent spouse receives a benefit equal to 50% of the worker's PIA, and a widow(er) receives a benefit equal to 100% of the worker's PIA. Dependent benefits may also be adjusted based on the age at which they are claimed and other factors.
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Exposure to ozone (often referred to as "smog"), regardless of where that ozone originates, has been linked to negative human health effects, including respiratory ailments and premature death. Children, the elderly, and persons with respiratory illnesses are particularly susceptible to adverse health impacts from ozone exposure. EPA estimates that ozone exposure was responsible for more than 15,000 premature deaths in the United States in 2007 based on 2006-2008 average ambient ozone concentrations. Ozone has also been linked to plant damage and decreases in crop yield. Concentrations of ozone at the ground level, originally considered a local issue, is increasingly recognized as a global challenge. Ozone is not emitted directly but is formed in the atmosphere from chemical reactions of nitrogen oxides (NO x ) with volatile organic compounds (VOCs, a type of hydrocarbon) in the presence of sunlight. NO x and VOCs are known as "precursor" emissions, and their relative contributions to the formation of ozone depends on a number of factors, including weather conditions and concentrations of other pollutants. The lifetime of ozone in the atmosphere ranges from hours to weeks, providing time—under the right conditions—for pollution emitted in one location to affect the health and welfare of populations far downwind (see Figure 2 ). While local emissions of ozone precursors are still the dominant source of ozone in many areas, state and local air quality agencies face ozone pollution arising from sources outside of their jurisdictional control ("background ozone"). As will be described and discussed in this report, potential long-range transport of air pollutants presents a challenge to downwind communities. It can also be an opportunity for cooperation among localities, states, and countries. The Clean Air Act (CAA) directs the U.S. Environmental Protection Agency (EPA) to establish National Ambient Air Quality Standards (NAAQS) to protect public health (primary standards) and welfare (secondary standards). The law directs that "the attainment and maintenance of [primary standards] are requisite to protect the public health." While the standards are set to limit adverse impacts, EPA acknowledges that these standards do not suggest that concentrations below these levels present zero risk. The NAAQS set limits for the concentrations in ambient air of six common "criteria" pollutants: lead, nitrogen oxides, sulfur dioxide, carbon monoxide, particulate matter, and ozone. There is no evidence of a safe level of ozone exposure below which no adverse health effects occur. However, uncertainty between exposure and health response increases at very low ozone concentrations—that is, below 20 parts per billion (ppb). Air quality monitoring stations in the United States measure concentrations of the six criteria pollutants, and these measurements are used to determine whether locations meet the NAAQS. If a monitor measures concentrations above the standard for any of those six pollutants for an averaging time specified in the NAAQS, the area around that monitor may face a "nonattainment" designation for that pollutant. Once designated nonattainment, the state containing that area must propose a plan to bring the area into attainment of the NAAQS. These State Implementation Plans (SIPs) require approval by EPA. State air quality regulators develop SIPs to attain NAAQS for ambient air in their states, and they have jurisdiction only over the sources of emissions within their borders. The levels of pollution flowing into nonattainment regions, generally referred to as "background pollution," may be making it more difficult for some areas of the United States to meet attainment. Congress recognized this challenge when it enacted the original CAA, adding the "good neighbor provision," which addressed interstate transport of human-caused air pollution that contributes to nonattainment. For detailed information about domestic air transport, see CRS Report R45299, The Clean Air Act's Good Neighbor Provision: Overview of Interstate Air Pollution Control , by Kate C. Shouse. The CAA also mandates EPA to review the NAAQS every five years and revise them as appropriate. EPA completed its most recent review of the ozone standard in 2015, when it lowered the standard from 75 ppb to 70 ppb. EPA reported that it has begun the next ozone NAAQS review and that it intends to complete it by 2020. The procedure for reviewing and setting the NAAQS explicitly does not consider what sources contribute to total ozone, including background sources. In 2018, EPA announced plans to streamline the NAAQS review process and obtain Clean Air Scientific Advisory Committee advice regarding background pollution and potential adverse effects from NAAQS compliance strategies. EPA's "Back-to-Basics" memorandum described concerns that background levels of pollution pose a challenge to meeting NAAQS standards. The memorandum noted a call from certain state regulators for advice on how to treat background ozone, stating that "state environmental agencies have sought this advice, citing the 'absolute need for a valid source of information about background concentrations.'" Additionally, EPA created a task force to develop "additional flexibilities for states to comply with the ozone standard." Much of the focus of ozone transport and control has historically been on upwind domestic sources. Members of Congress may have an interest in better understanding background ozone from natural and international sources, particularly as EPA reviews the 2015 ozone standard. Contributions from sources of background ozone may become important as states with nonattainment areas develop SIPs that attempt to quantify these contributions and consider ways to address them. To assist Congress in understanding these issues, this report defines background ozone , focusing on natural and international sources, and describes what is currently known about these sources. The report then goes on to discuss the limitations in the scientific community's understanding and options for deepening that understanding. This report will discuss background air pollution primarily in the context of ground-level ozone. As of 2018, with the 2015 ozone standard set at 70 ppb, there are 52 areas in the United States designated "nonattainment" for ozone (see Figure 1 ). Current research suggests that natural sources and sources outside the United States may contribute to total ozone in those areas at certain times. Many of the issues discussed here are not unique to ozone, however, and may apply to other pollutants covered by NAAQS, and any potential actions taken to understand or reduce background ozone may also reduce background concentrations of other pollutants. This report deals exclusively with ozone measured at ground level and its adverse health and material effects. Ozone Transport 101 and Figure 2 provide additional information about ozone in different layers of the atmosphere and how each layer may interact with, or contribute to, ozone at ground level. EPA defined natural background (NB) and U.S. background (USB) in the final 2015 ozone rule (the chemical notation of ozone is O 3 ): NB is defined as the O 3 that would exist in the absence of any manmade precursor emissions. USB is defined as that O 3 that would exist in the absence of any manmade emissions inside the U.S. This includes anthropogenic emissions outside the U.S. as well as naturally occurring ozone. A third term, North American background , is also defined in this report for added clarity. Each is explained in more detail below. Natural background ozone is what the average concentration of ground-level ozone would be without any human influence. Ozone forms naturally in the lower levels of the atmosphere due to natural emissions of precursors from sources including lightning, vegetation, wildfires, and methane. Transport of ozone vertically from the stratosphere to the atmospheric layer at ground level (called stratospheric intrusions) is a fifth major source. No air pollution monitors today are able measure true present day NB because human contributions to the formation of ozone are so widespread globally. The only way to estimate NB is with global scale atmospheric chemistry simulation models with inputs representing conditions without human influence. The remainder of this section summarizes the five major contributors to NB. A key point is that t he estimated contri butions presented are uncertain and are very dependent on both location and timing . The "Challenges in Estimating Background Ozone" section discusses specific challenges and uncertainties associated with the data and the modeling projects. 1. Lightning (NO x ) . Lightning flashes cause naturally occurring nitrogen and oxygen in the atmosphere to react and generate NO x molecules. Lightning and the resulting emissions occur primarily during the warmer months and are released in the free troposphere, which is above the well-mixed ground layer (see Figure 2 ). There is data to suggest that lightning contributes to daily, as well as seasonal average, ozone concentrations in high impact areas. 2. Vegetation (VOCs) . Trees release VOCs as a byproduct of photosynthesis. Biogenic VOCs from vegetation are the largest emissions source of VOCs in the United States, making up about 70% of the total inventory. Vegetation emissions are largest during the spring and summer, when plants are actively growing. For plants and trees that have leaves only seasonally, emissions decline as leaves drop and photosynthesis ends. 3. Wildfires (VOCs and NO x ) . Wildfires release both NOx and VOCs (as well as fine particles), but the amount and the reactivity of the polluting emissions depend on the type of fuel that is burning and how quickly and how hot the fire burns. Controlled/prescribed fires tend to burn cooler and release fewer pollutants. Current research suggests that active fires contribute to daily as well as seasonal average ozone concentrations. Research to improve emissions inventories from fire events is ongoing. 4. Stratospheric intrusions . Ozone occurs naturally in the stratosphere at very high concentrations and can occasionally be transported down to lower atmospheric levels during certain weather events (see text box "Ozone Transport 101" for more information about atmospheric layers and vertical transport of ozone). Stratospheric intrusions are more likely to affect ground-level concentrations at high elevation sites in the western United States, simply because these areas are closer to the stratosphere. These events are more common in winter and spring months because the large storms that cause them are more likely to occur in late winter and spring. 5. Methane . Methane has not been traditionally considered an ozone precursor because it does not react quickly to produce ozone. Nonetheless, it will over time react and contribute to background ozone. Methane's atmospheric lifetime is on the order of a decade, compared to a timescale of months to days for other VOCs, and so it is considered well-mixed globally by the time it contributes to the formation of ozone. It is accumulating in the atmosphere as well, raising background ozone concentrations. This ozone contribution is considered approximately spatially uniform and is increasing as methane concentrations increase. The major source contributors to global methane are natural production by bacteria in anaerobic (oxygen-free) conditions in natural wetlands or in agriculture, fossil fuel emissions leaking or venting either naturally or from energy development, and incomplete combustion of biomass or carbon. North American background (NAB) is the estimated concentration of ozone that excludes the effects of all human-caused emissions in North America. NAB includes all NB sources as well as human-caused sources of emissions from countries outside of North America. Air quality monitors located at sites on the western coast of the United States are not consistently reliable measures of NAB for two reasons: (1) Air circulation can bring continental air over the Pacific Ocean and then back into North America. (2) If meteorological conditions are favorable, ozone pollution formed from emissions in North America can have a long enough lifetime to travel all the way around the globe and re-enter North America from the west. Therefore, like NB, modeling is the best way to estimate NAB. Human-caused sources outside of North America are currently dominated by Asian emissions. Estimates of Asian contribution to background ozone in the United States are highly time- and location-specific. Asian precursor emissions, and resulting ozone, travel across the Pacific Ocean in the free troposphere (see Figure 2 ). However, because this pollution is traveling at higher elevations, it is more likely to impact cities and locations in the western United States located at higher elevations. These upper-level air flows from areas in Asia are also more likely to affect the United States in the late winter, spring, and early summer due to seasonal variability in hemisphere-scale circulation patterns. Asian emissions begin to taper off in late winter, and a July/August monsoon season in eastern China reduces formation of ozone in late summer. These features suggest that the maximum impact from Asian pollution would likely occur in late winter/early spring. U.S. background (USB) includes all contributions from NB and NAB plus all human-caused emissions from Mexico and Canada. In the publication of the most recent NAAQS for ozone, EPA generically defined background ozone as USB: The term "background" O 3 is often used to refer to O 3 that originates from natural sources of O 3 ( e.g., wildfires and stratospheric O 3 intrusions) and O 3 precursors, as well as from man-made international emissions of O 3 precursors. Using the term generically, however, can lead to confusion as to what sources of O 3 are being considered. Relevant to the O 3 implementation provisions of the CAA, we define background O 3 the same way the EPA defines USB: O 3 that would exist in the absence of any man-made emissions inside the U.S. Mexican and Canadian emissions primarily impact locations on the borders of those two countries, with maximum contribution estimates from one study of about 30 ppb to border cities. Model estimates of the contribution of USB to total ozone range from 25 ppb to 50 ppb, with the highest values in the inter-mountain West, based on an EPA review of model data. The contribution of background ozone to total local ozone concentrations varies from location to location, day to day, and even hour to hour. These variations are driven both by changes in pollutant emissions from sources and by changing weather patterns that influence the chemistry and physical transport of the pollutants. There is also uncertainty associated with measuring or estimating these driving forces behind background ozone contributions. As mentioned, estimates of source contributions to background ozone rely on computer models that simulate atmospheric chemistry and transport and the resulting pollution. These models rely on large datasets of emissions inventories and meteorological data, both with detailed hourly and location-specific data. These input data are often not available at the temporal and spatial resolution needed, and so estimates and/or simplifications must be made, which increases uncertainty. Atmospheric measurements of ozone concentrations are then compared to model output to evaluate how well the model is performing. However, measurement data of the pollutants being modeled are also limited, which increases the challenge associated with evaluating the performance of the model in capturing ozone formation and movement. Modeling studies estimating background ozone and source attribution often present results as seasonal averages or represent time periods that may not be of specific use to regulators. See text box "Pollution Exposure Averaging Metrics" for additional information about averaging metrics. Retrospective studies face all the challenges mentioned. Forecasting studies face the additional challenge of attempting to model the future based on historical patterns and current conditions, adding another level of uncertainty. According to EPA, NO x emissions from electricity generating units have decreased 81% nationally compared to 1990 levels due in part to the acid rain program and ozone transport rules. While these reductions have resulted in total ozone decreases across most of the United States, models suggest that temperature increases in many areas of the United States during that same time frame have negated what would have been additional ozone benefits. Decreasing trends in total ozone concentrations measured at regulatory monitors between 1990 and 2010 generally occur in the eastern United States. Many western monitors do not show similar trends in total ozone over the same time period despite similar reductions in NO x from the power sector and individual personal vehicles. The lack of a decreasing ozone trend at many monitors in the West could be due to a number of causes: increasing seasonal average temperatures, an increase in incidents of fire since 1986, emissions from oil and gas development, increasing contributions from international transport of air pollution, and increasing global methane concentrations. According to the 2017 U.S. National Climate Assessment, on average since 1986 in the United States, the number of wildfires and the burn duration have both quadrupled. The number of acres burned has increased six-fold, compared to 1970 to 1986. The report also indicates that total NO x emissions from fire events are expected to increase with fire temperature, duration, and area burned. Figure 3 shows the annual count, and total area burned of all wildfires larger than 1,000 acres from 1984 through 2015. While emission inventories from Asia are highly uncertain—and outdated in some modeling cases—several sources of data suggest that Asian emissions, and potentially their impact on U.S. air quality, have peaked. Projections of fossil fuel combustion in Asian countries suggest uncertainty about peaking, although the Chinese government recently announced a target of a 15% reduction in NO x emissions by 2020 compared to 2015 emissions. A review of measurements of baseline ozone taken at monitors along the western coast of North America show that, after two decades of increasing trends, ozone flowing into the continental United States from the west stopped increasing in the mid-2000s and has begun to decrease. However, since about 2000, ozone levels measured at a rural site in Alaska have been increasing, with the source suspected in part to be transport of East Asian air. Demonstrations of high ozone directly related to wildfires and stratospheric intrusions may be eligible for exclusion from an ozone attainment calculation under the Exceptional Event Rule of the CAA. In order to facilitate successful demonstrations of exceptional events, EPA released a final guidance document in 2016 for preparations of exceptional events demonstrations for wildfires. A draft guidance document was released in August 2018 covering the preparation of exceptional events demonstrations for stratospheric ozone intrusions. These documents outline expectations, but they do not provide the specific modeling platforms or tools required to conduct the successful demonstrations. State, local, and tribal co-regulators recommended to EPA that the agency develop a similar guidance document for international emissions. Under Section 179B of the CAA, a demonstration of contribution by international sources may reduce attainment demonstration requirements in SIPs but does not provide regulatory relief from a potential nonattainment designation. Several issues may arise for congressional deliberations with regard to background ozone pollution. Stakeholders suggest challenges with meeting the NAAQS, in part due to the difficulty of reducing ozone in areas with potentially large contributions from background sources and in part due to lack of data availability to conduct demonstrations of those background contributions. Congress may seek to understand the progress of research on background ozone as EPA revisits the NAAQS for ozone. EPA released a state of the science background ozone white paper to stakeholders and requested feedback on major issues. The House Committee on Science, Space and Technology revisited the issue when its Subcommittee on Environment held a hearing on background ozone on June 21, 2018. The following four points summarize the opinions and policy and scientific challenges brought forth both by stakeholder responses to the EPA white paper and by the testimony from invited stakeholders at the recent background ozone hearing: 1. Some states, especially states in the western United States, have asserted that natural and non-U.S. sources of ozone and precursors have increased the ozone concentrations in their states. 2. Current statutory and regulatory options to address natural and non-U.S. sources often require technical data, modeling, and analyses that may be cost prohibitive. 3. Modeling results that attempt to quantify levels of contribution from sources are uncertain, and they represent historical, or average, impacts. 4. In most locations, especially urban locations, many studies (including the whitepaper published by EPA ) have shown that local sources contribute a large part to total local ozone. Most recently, the U.S. Court of Appeals for the D.C. Circuit considered whether EPA should take background ozone into account when setting NAAQS. The case has not been decided at the time this report was published. A potential avenue for Congress to address gaps in the scientific understanding of background ozone is through research and development. Therefore, Congress may consider funding implications of the following recommendations, made by stakeholders in the scientific and regulatory communities, that are intended to improve the understanding of contributions from background ozone: International engagement and/or cooperation at the federal level and through research collaborations that may improve understanding of non-U.S. contributions to U.S. air quality and may increase cooperation for pollution reduction goals. Increased monitoring at ground level and at higher levels in the atmosphere, through state or federal regulatory air quality monitoring projects or research campaigns, to aid in analysis of background ozone trends and improve confidence in the performance of the models used to estimate background contributions. Additional research and development into model estimates of background ozone, representing additional weather patterns (i.e., El Nino/La Nina patterns can influence background ozone), and model simplification schemes to provide more information about the variability associated with background ozone contributions. Finally, Congress may consider the role that methane plays in air quality. Methane is a precursor to ozone, and so methane emission reductions have been suggested as one option to reduce global background concentrations of ozone. Additionally, ozone itself is a strong greenhouse gas. EPA's review of the ozone NAAQS is underway and set to be completed in 2020, with background ozone contributions suggested as a topic to be addressed. Congress may conduct oversight as EPA carries out this effort.
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Exposure to ozone, a common air pollutant, has been linked to early death, plant and crop damage, and damage to property. The U.S. Environmental Protection Agency (EPA) sets National Ambient Air Quality Standards (NAAQS) for ground-level ozone to protect human health and welfare with, by law, a "margin of safety." States that contain areas with ozone concentrations above these standards must develop plans to reduce emissions and improve air quality. However, states have direct control only over emission sources located within their borders. The Clean Air Act (CAA) requires EPA to re-evaluate the NAAQS every five years to include the latest science and technological advancements. Studies reporting the human health impacts of ozone increasingly suggest that ozone exposure may not be completely safe at any level. With the potential for a NAAQS re-evaluation leading to science-based recommendations for a tighter standard, some stakeholders have expressed increasing concern that future—and even current—ozone standards could be difficult to meet due to the contribution of "background ozone," which arises from a variety of sources described in this report. In some areas of the United States, background ozone may be approaching 70 parts per billion (ppb) on some days, the current level of the NAAQS. Some Members of Congress have expressed interest in adverse health effects that occur at or below the current standard, challenges some nonattainment areas may have in meeting current standards, and particularly the responsibilities for meeting the health standard, given interstate and international transport. EPA's review of the ozone NAAQS is underway and set to be completed in 2020, with background ozone contributions suggested as a topic to be addressed. Congress may have an interest in better understanding scientific capabilities, needs, and efforts to improve understanding of contributions from background sources, as well as options for regulatory responses. Defining Background Ozone Three terms are used for different types of background ozone, and distinguishing among them can be important for regulatory purposes. 1. Natural background. Ozone concentrations that would be present without any human influence or contribution from anywhere on the globe. Natural background includes contributions from wildfires, vegetation, lightning, ozone in the stratosphere, and global methane concentrations. Contributions to background ozone from wildfires and methane have been increasing over the past several decades. 2. North American background. Ozone concentrations absent human-caused emissions from North America. North American background includes all sources in natural background plus ozone from international sources outside North America. Studies suggest that Asian emissions may be contributing to ozone in the United States, especially in Western states, but that those contributions may be beginning to decrease. 3. United States background. Ozone concentrations absent human-caused emissions from the United States. U.S. background includes all sources in North American background plus ozone formed from emission sources in Mexico and Canada. Challenges in Estimating Background Ozone The CAA provides alternative regulatory options for areas that successfully demonstrate significant influence from some specific sources of natural background ozone on ozone exceedences. However, such demonstrations may be difficult to conduct and reliably assess, given data and analytical challenges: Emissions inventories. Current understanding of the amount, location, and type of pollutant emissions from many types of sources is insufficient. Therefore inventories typically provide estimations, which may not be precise enough for apportioning contributions. Weather data. Meteorological data (i.e., wind speed, wind direction, temperature, cloud cover, humidity, etc.) are not currently measured at a fine enough spatial scale to adequately represent relevant weather processes. Ambient air quality measurements. Data on pollutant concentrations are limited, which increases the challenge of understanding ozone formation and movement. Fine spatial and temporal measurements are needed both horizontally across the surface and vertically to higher levels of the atmosphere. Source contribution variability. Background ozone source contributions change by year, season, day, and hour and from location to location. This makes it difficult to project future contributions, including when contributions will be relevant to attainment status. This report provides information on sources of background ozone, presents key challenges in addressing these sources, and discusses potential options to overcome these challenges.
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Illegal aliens have exploited asylum loopholes at an alarming rate. Over the last five years, DHS has seen a 2000 percent increase in aliens claiming credible fear (the first step to asylum), as many know it will give them an opportunity to stay in our country, even if they do not actually have a valid claim to asylum. —Department of Homeland Security (DHS) press release, December 20, 2018 The increased number of Central Americans petitioning for asylum in the United States is not because more people are "exploiting" the system via "loopholes," but because many have credible claims…. There is no recorded evidence by any U.S. federal agency showing that the increased number of people petitioning for asylum in the United States is due to more people lying about the dangers they face back in their country of origin. —Washington Office on Latin America (WOLA) commentary, March 14, 2018 These statements and the conflicting views about asylum seekers underlying them suggest why the asylum debate has become so heated. Policymakers have faced a perennial challenge to devise a fair and efficient system that approves legitimate asylum claims while deterring and denying illegitimate ones. Changes in U.S. asylum po licy and processes over the years can be seen broadly as attempts to strike the appropriate balance between these two goals. Periods marked by increasing levels of asylum-seeking pose particular challenges and may elicit a variety of policy responses. Faced with an influx of Central Americans seeking asylum at the southern U.S. border, the Trump Administration has put forth policies to tighten the asylum system (see, for example, the " 2018 Interim Final Rule " and " DHS Migrant Protection Protocols " sections of this report); these policies typically have been met with court challenges. This report explores the landscape of U.S. asylum policy through an analysis of current asylum processes, available data, legislative and regulatory history, recent legislative and presidential proposals, and selected policy questions. In common usage, the word asylum often refers to protection or safety. In the immigration context, however, it has a narrower meaning. The Immigration and Nationality Act (INA) of 1952, as amended, provides for the granting of asylum to an alien who applies for such relief in accordance with applicable requirements and is determined to be a refugee . The INA defines a refugee, in general, as a person who is outside his or her country of nationality and is unable or unwilling to return to, or to avail himself or herself of the protection of, that country because of persecution or a well-founded fear of persecution based on one of five protected grounds: race, religion, nationality, membership in a particular social group, or political opinion. Asylum can be granted by the Department of Homeland Security's (DHS's) U.S. Citizenship and Immigration Services (USCIS) or the Department of Justice's (DOJ's) Executive Office for Immigration Review (EOIR), depending on the type of application filed (see " Asylum Application Process "). The INA distinguishes between applicants for refugee status and applicants for asylum by their physical location. Refugee applicants are outside the United States, while applicants for asylum are physically present in the United States or at a land border or port of entry. After one year as a refugee or asylee (a person granted asylum), an individual can apply to be become a U.S. lawful permanent resident (LPR). With some exceptions, aliens who are in the United States or who arrive in the United States, regardless of immigration status, may apply for asylum. This summary describes the asylum process for an adult applicant. As discussed in the next section of the report, asylum may be granted by a USCIS asylum officer or an EOIR immigration judge. There are no numerical limitations on asylum grants. In order to receive asylum, an alien must establish that he or she meets the INA definition of a refugee, among other requirements. Certain aliens, such as those who are determined to pose a danger to U.S. security, are ineligible for asylum. An asylum applicant who is not otherwise eligible to work in the United States may apply for employment authorization 150 days after filing a completed asylum application and may receive such authorization 180 days after the application filing date. An alien who has been granted asylum is authorized to work in the United States and may receive approval to travel abroad. A grant of asylum does not expire, but it may be terminated under certain circumstances, such as if an asylee is determined to no longer meet the INA definition of a refugee. After one year of physical presence in the United States as an asylee, an alien may be granted LPR status, subject to certain requirements. There are no numerical limitations on the adjustment of status of asylees to LPR status. Special asylum provisions apply to certain aliens without proper documentation who are determined to be subject to a streamlined removal process known as expedited removal. To be considered for asylum, these aliens must first be determined by a USCIS asylum officer to have a credible fear of persecution. Those determined to have a credible fear may apply for asylum during standard removal proceedings. (See " Inspection of Arriving Aliens .") Applications for asylum are either defensive or affirmative. A different set of procedures applies to each type of application. An asylum application is affirmative if an alien who is physically present in the United States (and not in removal proceedings) submits an application for asylum to DHS's USCIS. An alien may file an affirmative asylum application regardless of his or her immigration status, subject to applicable restrictions. There is no fee to apply for asylum. Figure 1 shows the number of new affirmative asylum applications filed with USCIS since FY1995, the year filings reached their historical high point. The years included in this figure and in the subsequent figures and tables differ due to the availability of data from the relevant agencies. The data displayed in Figure 1 are for applications, not individuals; an application may include a principal applicant and dependents. Figure 1 reflects the impact of various factors. For example, reforms in the mid-1990s, which made the asylum system more restrictive, contributed to the decline in applications in the earlier years shown. A contributing factor to the application increases in the later years depicted in Figure 1 was the influx of unaccompanied alien children from Central America seeking asylum. (See Appendix A for underlying data and data on the top 10 nationalities filing affirmative asylum applications.) The INA prohibits the granting of asylum until the identity of the asylum applicant has been checked against appropriate records and databases to determine if he or she is inadmissible or deportable, or ineligible for asylum. As part of the affirmative asylum process, applicants are scheduled for fingerprinting appointments. The fingerprints are used to confirm the applicant's identity and perform background and security checks. Asylum applicants are interviewed by USCIS asylum officers. In scheduling asylum interviews, the USCIS Asylum Division is currently giving priority to applications that have been pending for 21 days or less. According to USCIS, "Giving priority to recent filings allows USCIS to promptly place such individuals into removal proceedings, which reduces the incentive to file for asylum solely to obtain employment authorization." Under DHS regulations, the asylum interview is to be conducted in "a nonadversarial manner." The applicant may bring counsel or a representative to the interview, present witnesses, and submit other evidence. After the interview, the applicant or the applicant's representative can make a statement. An asylum officer's decision on an application is reviewed by a supervisory asylum officer, who may refer the case for further review. If an asylum officer ultimately determines that an applicant is eligible for asylum, the applicant receives a letter and form documenting the grant of asylum. If the asylum officer determines that an applicant is not eligible for asylum and the applicant has immigrant status, nonimmigrant status, or temporary protected status (TPS), the asylum officer denies the application. If the asylum officer determines than an applicant is not eligible for asylum and the applicant appears to be inadmissible or deportable under the INA, however, DHS regulations direct the officer to refer the case to an immigration judge for adjudication in removal proceedings. In those proceedings, the immigration judge evaluates the asylum claim independently as a defensive application for asylum. Figure 2 presents data on affirmative asylum applications considered by USCIS since FY2009. It shows four separate outcome categories. Closures are cases administratively closed for reasons such as abandonment or lack of jurisdiction. A closure in one fiscal year in Figure 2 could have been refiled or reopened in a subsequent year. Figure 2 shows that a majority of cases were referred to an immigration judge each year. These referrals included both applicants who were interviewed by USCIS and applicants who were not (e.g., they did not appear for the interview). (See Table B-1 for underlying data and additional detail. ) An asylum application is defensive when the applicant is in standard removal proceedings in immigration court and requests asylum as a defense against removal. Figure 3 provides data on defensive asylum applications filed since FY2009. The data include both cases that originated as defensive cases as well as cases that were first filed as affirmative applications with USCIS, as described in the preceding section. (See Table C-1 for underlying data and additional detail.) There are different ways that an alien can be placed in standard removal proceedings. An alien who is living in the United States can be charged by DHS with violating immigration law. In such a case, DHS initiates removal proceedings when it serves the alien with a Notice to Appear before an immigration judge. Another way to be placed in standard removal proceedings relates to the statutory expedited removal and credible fear screening provisions discussed more fully below (see " Inspection of Arriving Aliens "). Under the INA, an individual who is determined by DHS to be inadmissible to the United States because he or she lacks proper documentation or has committed fraud or willful misrepresentation of facts to obtain documentation or another immigration benefit (and thus is subject to expedited removal) and expresses the intent to apply for asylum or a fear of persecution is to be interviewed by an asylum officer to determine if he or she has a credible fear of persecution. Credible fear of persecution means that "there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum." If the alien is found to have a credible fear, the asylum officer is to refer the case to an immigration judge for a full hearing on the asylum request during removal proceedings. Figure 4 provides data on USCIS credible fear findings since FY1997. For each year, it shows the number of credible fear cases referred to and completed by USCIS and the outcomes of the completed cases. Closed cases are cases in which a credible fear determination was not made. (See Table B-2 and Table B-3 for underlying data and additional detail.) During a removal proceeding, an attorney from DHS's Immigration and Customs Enforcement (ICE) presents the government's case for removing the alien, the alien or their representative may present evidence on the alien's behalf and cross examine witnesses, and an immigration judge from EOIR determines whether the alien should be removed. An immigration judge's removal decision is generally subject to administrative and judicial review. Figure 5 presents data on EOIR decisions in defensive asylum cases since FY2009. (See Appendix D for underlying data and data for defensive cases that began with a credible fear claim. ) Figure 5 shows a sharp drop in administrative closures since FY2016. Administrative closing "allows the removal of cases from the immigration judge's calendar in certain circumstances" but "does not result in a final order" in the case; cases that are administratively closed can be reopened. Administrative closure has been used, for example, when an alien has a pending application for relief from another agency. In May 2018, Attorney General Jeff Sessions ruled that immigration judges and the BIA do not have general authority to administratively close cases. The INA, as originally enacted, did not contain refugee or asylum provisions. Language on the conditional entry of refugees was added by the INA Amendments of 1965. The 1965 act authorized the conditional entry of aliens, who were to include those who demonstrated to DOJ's Immigration and Naturalization Service (INS) that (i) because of persecution or fear of persecution on account of race, religion, or political opinion they have fled (I) from any Communist or Communist-dominated country or area, or (II) from any country within the general area of the Middle East, and (ii) are unable or unwilling to return to such country or area on account of race, religion, or political opinion, and (iii) are not nationals of the countries or areas in which their application for conditional entry is made. In 1968, the United States acceded to the 1967 United Nations Protocol Relating to the Status of Refugees (Protocol). The Protocol incorporated the 1951 United Nations Convention Relating to the Status of Refugees (Convention), which the United States had not previously been a party to, and expanded the Convention's definition of a refugee. The Convention had defined a refugee in terms of events occurring before January 1951. The Protocol eliminated that date restriction. It also provided that the refugee definition would apply without geographic limitation, while allowing for some exceptions. With the changes made by the Protocol, a refugee came to be defined as a person who "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country." The Protocol retained other elements of the Convention, including the latter's prohibition on refoulement (or forcible return), a fundamental asylum concept. Specifically, the Convention prohibited states from expelling or returning a refugee "to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion." In the 1970s, INS issued regulations that established procedures for applying for asylum in the United States and for adjudicating asylum applications. For example, a 1974 rule provided that an asylum applicant could include his or her spouse and unmarried minor children on the application and that INS could deny or approve an asylum application as a matter of discretion. Despite the U.S. accession to the 1967 U.N. Protocol, the INA did not include a conforming definition of a refugee or a mandatory nonrefoulement provision until the enactment of the Refugee Act of 1980. As noted, the 1965 conditional entry provisions incorporated a refugee definition that was limited by type of government and geography. A 1999 INS report explained a goal of the Refugee Act as being "to establish a politically and geographically neutral adjudication for both asylum status and refugee status, a standard to be applied equally to all applicants regardless of country of origin." The definition of a refugee, as added to the INA by the 1980 act, reads, in main part: (A) any person who is outside any country of such person's nationality ... and who is unable or unwilling to return to, and is unable or unwilling to avail himself or herself of the protection of, that country because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion. (This first part of the definition of a refugee has not changed since enactment of the Refugee Act.) As explained by INS Acting Commissioner Doris Meissner at a 1981 Senate hearing, the primary focus of the Refugee Act of 1980 was the refugee process. According to Meissner's written testimony, "The asylum process was looked upon as a separate and considerably less significant subject." In keeping with this secondary status, the asylum provisions added by the 1980 act to the INA (as INA §208) comprised three short paragraphs. The first directed the Attorney General to establish asylum application procedures for aliens physically present in the United States or arriving at a land border or port of entry, regardless of immigration status, and gave the Attorney General discretionary authority to grant asylum to aliens who met the newly added INA definition of a refugee. The second paragraph allowed for the termination of asylum status if the Attorney General determined that the alien no longer met the INA definition of a refugee due to "a change in circumstances" in the alien's home country. The third paragraph provided for the granting of asylum status to the spouse and children of an alien granted asylum. Separate language in the Refugee Act added a new Section 209 to the INA on refugee and asylee adjustment of status. Adjustment of status is the process of acquiring LPR status in the United States. The asylee provisions granted the Attorney General discretionary authority to adjust the status of an alien who had been physically present in the United States for one year after being granted asylum and met other requirements, subject to an annual numerical limit of 5,000. The Refugee Act amended an INA provision on withholding of deportation, making it consistent with the nonrefoulement language in the Convention. The INA provision in effect prior to the enactment of the Refugee Act "authorized" the Attorney General to withhold the deportation of an alien in the United States (other than an alien involved in Nazi-related activity) to "any country in which in his opinion the alien would be subject to persecution on account of race, religion or political opinion." The Refugee Act revised this language to prohibit the Attorney General from deporting or returning any alien to a country where the Attorney General determines the alien's life or freedom would be threatened because of the alien's race, religion, nationality, membership in a particular social group, or political opinion. It also added exclusions beyond the one for participation in Nazi-related activity. Specifically, the new provision made an alien ineligible for withholding if the alien had participated in the persecution of another person based on race, religion, nationality, membership in a particular social group, or political opinion; the alien had been convicted of a "particularly serious crime" and thus was a danger to the United States; there existed "serious reasons for considering that the alien had committed a serious nonpolitical crime outside the United States," or there existed "reasonable grounds" for considering the alien a danger to national security. (For subsequent changes to this provision, see " Withholding of Removal .") INS published interim regulations in June 1980 to implement the Refugee Act's provisions on refugee and asylum procedures. The asylum regulations included the following: INS district directors had jurisdiction over all requests for asylum except for those made by aliens in exclusion or deportation proceedings. An alien whose application for asylum was denied by the district director could renew the asylum request in exclusion or deportation proceedings. The applicant had the burden of proof to establish eligibility for asylum. The asylum applicant would be examined in person by an immigration officer or an immigration judge. The district director (or the immigration judge) would request an advisory opinion on the asylum application from the Department of State's (DOS's) Bureau of Human Rights and Humanitarian Affairs (BHRHA). The district director could grant work authorization to an asylum applicant who filed a "non-frivolous" application. The district director's decision on an asylum application was discretionary. The district director would deny an asylum application for various reasons, including that the alien had been firmly resettled in another country; the alien had participated in the persecution of another person based on race, religion, nationality, membership in a particular social group, or political opinion; the alien had been convicted of a "particularly serious crime" and thus was a danger to the United States; there existed "serious reasons for considering that the alien had committed a serious non-political crime outside the United States;" or there existed "reasonable grounds" for considering the alien a danger to national security. An initial grant of asylum was for one year and could be extended in one-year increments. Asylum status could be terminated for various reasons, including changed conditions in the asylee's home country. There was much discussion and debate about asylum in the 1980s, as related legislation and regulations were proposed, court cases were litigated, and the number of applications increased. In addition, in a 1983 internal DOJ reorganization, EOIR was established as a separate DOJ agency to administer the U.S. immigration court system. It combined the Board of Immigration Appeals (BIA) with the INS immigration judge function. With the creation of EOIR, the immigration courts became independent of INS. It was not until July 1990 that INS published a final rule to revise the 1980 interim regulations on asylum procedures. According to the supplementary information to the 1990 rule, the asylum policy established by the rule reflected two core principles: "A fundamental belief that the granting of asylum is inherently a humanitarian act distinct from the normal operation and administration of the immigration process; and a recognition of the essential need for an orderly and fair system for the adjudication of asylum claims." The 1990 final rule created the position of asylum officer within INS to adjudicate asylum applications. As described in the supplementary information to a predecessor 1988 proposed rule, asylum officers were intended to be "a specially trained corps" that would develop expertise over time, with the expected result of greater uniformity in asylum adjudications. Under the 1990 rule, asylum applications filed with the district director were to be forwarded to the asylum officer with jurisdiction in the district. Under the 1990 rule, comments on asylum applications by DOS—a standard part of the adjudication process under the 1980 interim regulations—became optional. (In an earlier, related development, DOS announced that as of November 1987 it would no longer be able to provide an advisory opinion on every asylum application due to budget constraints and would focus on those cases where it thought it could provide input not available from other sources. ) The 1990 rule distinguished between asylum claims based on actual past persecution and on a well-founded fear of future persecution. To establish a well-founded fear of future persecution, the rule required, in part, that an applicant establish that he or she fears persecution in his or her country based on one of the five protected grounds and that "there is a reasonable possibility of actually suffering such persecution" upon return. The rule further detailed the "burden of proof" requirements for asylum applicants. It provided that the applicant's own testimony alone may be sufficient to prove that he or she meets the definition of a refugee. It also stated that an applicant could show a well-founded fear of persecution on one of the protected grounds without proving that he or she would be persecuted individually, if the applicant could establish "that there is a pattern or practice" of persecution of similarly situated individuals in his or her home country and that he or she is part of such a group. The 1990 rule provided that a grant of asylum to a principal applicant would be for an indefinite period. It also provided that the grant of asylum to a principal applicant's spouse and children would be indefinite, unless the principal's asylum status was revoked. Under the 1990 rule, an application for asylum was also to be considered an application for withholding of deportation; in cases of asylum denials, the asylum officer was required to decide whether the applicant was entitled to withholding of deportation. A 1987 proposed rule would have made asylum officers' decisions on asylum and withholding of deportation applications binding on immigration judges. That change was not retained in the 1990 final rule, however, which preserved immigration judges' role in adjudicating asylum and withholding of deportation claims in exclusion or deportation proceedings. Regarding eligibility for withholding of deportation, the 1990 rule stated, in part, "The applicant's life or freedom shall be found to be threatened if it is more likely than not that he would be persecuted on account of race, religion, nationality, membership in a particular social group, or political opinion." The 1990 rule directed the asylum officer to grant an undetained asylum applicant employment authorization for up to one year if the officer determined that the application was not frivolous; frivolous was defined as "manifestly unfounded or abusive." The employment authorization could be renewed in increments of up to one year. The asylum officer had to provide an applicant with a written decision on an asylum or withholding of deportation application, and had to provide an explanation in the case of a denial. The 1990 rule also granted specified officials in INS and DOJ the authority to review the decisions of asylum officers but did not grant applicants any right to appeal to these officials. The Immigration Act of 1990 and the Violent Crime Control and Law Enforcement Act of 1994 made several changes to the asylum-related provisions in the INA. The 1990 act amended INA §209 to increase the annual numerical limitation on asylee adjustment of status from 5,000 to 10,000. It also added new language to INA §208, making an alien who had been convicted of a crime categorized as an aggravated felony under the INA ineligible for asylum. The 1994 act further amended INA §208 to state that an asylum applicant was not entitled to employment authorization except as provided at the discretion of the Attorney General by regulation. In March 1994, INS published a proposed rule to streamline its asylum procedures that included a number of controversial provisions. The agency characterized the problem the proposal sought to address as follows: "The existing system for adjudicating asylum claims cannot keep pace with incoming applications and does not permit the expeditious removal from the United States of those persons who[se] claims fail." The 1994 final rule, published in December 1994, made fundamental changes to the asylum adjudication process. Under the rule, INS asylum officers were no longer to deny asylum applications filed by aliens who appeared to be excludable or deportable, or to consider applications for withholding of deportation from such applicants, with limited exceptions. Instead, officers were to either grant such applicants asylum or immediately refer their claims to immigration judges, where the claims would be considered as part of exclusion or deportation proceedings. Asylum officers were to continue to issue approvals and denials in cases of asylum applications filed by aliens with a legal immigration status. The 1994 rule also made changes to the employment authorization process for asylum applicants that were intended to "discourage applicants from filing meritless claims solely as a means to obtain employment authorization." Under the rule, an alien had to wait 150 days after his or her complete asylum application had been received to apply for employment authorization. INS then had 30 days to adjudicate that employment authorization application. (These 150-day and 30-day time frames remain in regulation. ) According to the supplementary information accompanying the rule, the goal was to make a decision on an asylum application before the end of 150 days: "The Immigration and Naturalization Service (INS) and the Executive Office for Immigration Review (EOIR) would strive to complete the adjudication of asylum applications, through the decision of an immigration judge, within this 150-day period." Some of the provisions in the proposed rule were not adopted in the final rule. These included proposals to make asylum interviews discretionary and to charge fees for asylum applications and initial applications for employment authorization. The Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996 significantly amended the INA's asylum provisions and made a number of other changes to the INA relevant to asylum policy. Many of the IIRIRA changes remain in effect. One set of changes, which had broad implications for the immigration system generally, concerned the INA grounds of exclusion. Applicable to aliens outside the United States, these provisions enumerated classes of aliens who were ineligible for visas and were to be excluded from admission. IIRIRA amended these provisions and replaced the concept of an excludable alien with that of an inadmissible alien—the latter being a person who, whether outside or inside the United States, has not been lawfully admitted to the country. In general, with the enactment of IIRIRA, an alien became ineligible for a visa or admission if he or she was described in the reconfigured grounds of inadmissibility. IIRIRA added restrictions to the general policy set forth in the 1980 Refugee Act and incorporated into the INA that an alien who is present in the United States or who arrives in the United States, regardless of immigration status, can apply for asylum. In general, under the IIRIRA amendments, which remain in effect, an alien is not eligible to apply for asylum unless the alien can show that he or she filed the application within one year of arriving in the United States. An alien is also generally ineligible to apply if he or she has previously had an asylum application denied. There is an exception to both restrictions if an alien can show "changed circumstances which materially affect the applicant's eligibility for asylum," and an additional exception to the time limit requirement if the alien can show "extraordinary circumstances" related to the filing delay . IIRIRA also made an alien ineligible to apply for asylum if the Attorney General determined that the alien could be removed, pursuant to a bilateral or multilateral agreement, to a safe third country where the alien would be considered for asylum or equivalent temporary protection (see " Safe Third Country Agreements "). IIRIRA amended the INA to authorize, but not require, the Attorney General to impose fees on asylum applications and related applications for employment authorization. Among other new asylum provisions it added to the INA were a requirement to check the identity of applicants against "all appropriate records or databases maintained by the Attorney General and by the Secretary of State" and a permanent bar to receiving any immigration benefits for aliens who knowingly file frivolous asylum applications after being notified of the consequences for doing so. IIRIRA also put asylum processing-related time frames in statute, including a requirement that "in the absence of exceptional circumstances," administrative adjudication of an asylum application be completed within 180 days after the filing date. All these provisions are still in statute. IIRIRA modified and codified some existing and prior asylum regulations. It amended an existing INA provision on employment authorization by adding language prohibiting an asylum applicant who is not otherwise eligible for employment authorization from being granted such authorization earlier than 180 days after filing the asylum application. It further amended the INA asylum provisions to add grounds for denying asylum. Similar to the mandatory denial language in the 1980 interim regulations, these grounds included an applicant's conviction for a "particularly serious crime," "serious reasons for believing the alien has committed a serious nonpolitical crime outside the United States," "reasonable grounds" for considering the alien a danger to national security, and the applicant's firm resettlement in another country prior to arrival in the United States. IIRIRA also added, as a new asylum denial ground, being inadmissible to the United States on certain terrorist-related grounds. In addition, IIRIRA provided that the Attorney General could establish additional ineligibilities for asylum by regulation that were consistent with the INA asylum provisions. These IIRIRA amendments remain a part of the INA, although the provision on terrorist-related grounds of inadmissibility has been revised. IIRIRA amended the INA language on termination of asylum to state that the granting of asylum "does not convey a right to remain permanently in the United States." It also added new termination grounds to the existing ground of no longer meeting the INA definition of a refugee. IIRIRA provided that asylum could be terminated if the Attorney General determined that the asylee met one of the grounds for denying asylum noted in the preceding paragraph. Among IIRIRA's other new grounds for terminating asylum was a determination by the Attorney General, analogous to the "safe third country" determination described above, that the alien could be removed, pursuant to a bilateral or multilateral agreement, to a safe third country where the alien would be eligible for asylum or equivalent temporary protection. The IIRIRA asylum termination provisions remain part of the INA. IIRIRA amended the INA definition of a refugee to cover individuals subject to "coercive population control." It provided that for purposes of meeting the definition of a refugee, an individual who had been forced to have an abortion or undergo sterilization or had been persecuted for resistance to a coercive population control program would be considered to have been persecuted on the basis of political opinion. Similarly, an individual with a well-founded fear that he or she would be forced to undergo a procedure or would be persecuted for resistance to a coercive population control program would be considered to have a well-founded fear of persecution on the basis of political opinion. This language remains part of the INA definition of a refugee. IIRIRA amended the INA provisions on the inspection of aliens by immigration officers to establish a new immigration enforcement mechanism known as expedited removal. In general, under expedited removal an alien who is determined by an immigration officer to be inadmissible to the United States because the alien lacks proper documentation or has committed fraud or willful misrepresentation of facts to obtain documentation or another immigration benefit may be removed from the United States without any further hearings or review, unless the alien indicates either an intention to apply for asylum or a fear of persecution. Under the INA, as amended by IIRIRA, this expedited removal procedure was to be applied to all arriving aliens , a term that includes aliens arriving at a U.S. port of entry. (An exception for Cuban citizens arriving at U.S. ports of entry by aircraft is no longer in effect. ) It also could be applied to any (or all) aliens in the United States, as designated by the Attorney General at his or her discretion, if an alien has not been admitted or paroled into the United States and "has not affirmatively shown, to the satisfaction of an immigration officer, that the alien has been physically present in the United States continuously for the 2-year period immediately prior to the date of the determination of inadmissibility." Using this statutory authority, the application of expedited removal has been expanded to classes of aliens beyond arriving aliens (see " Implementing Regulations "). Under the IIRIRA amendments, an alien who is subject to expedited removal and expresses the intent to apply for asylum or a fear of persecution is to be interviewed by an asylum officer to determine if the alien has a credible fear of persecution. (Special procedures apply to aliens arriving in the United States at a U.S.-Canada land port of entry in accordance with a U.S.-Canada agreement; see " Safe Third Country Agreements .") Under the INA, credible fear of persecution means that "there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum." If an alien is found to have a credible fear, the asylum officer is to refer the case to an immigration judge for full consideration of the asylum request during standard removal proceedings. If an alien is found not to have a credible fear, the alien may request that an immigration judge review the negative finding. To ultimately receive asylum, however, an alien must meet the higher standard of showing past persecution or a well-founded fear of future persecution. As part of a larger set of changes to the INA replacing the concept of deportation with removal, IIRIRA added a withholding of removal provision (INA §241(b)(3)) to replace the existing INA withholding of deportation provision. The new withholding of removal provision stated, and continues to state, in main part, that "the Attorney General may not remove an alien to a country if the Attorney General decides that the alien's life or freedom would be threatened in that country because of the alien's race, religion, nationality, membership in a particular social group, or political opinion." The IIRIRA provision retained language on ineligibility for withholding that had been enacted in 1980. It also included language on treatment of aggravated felonies for purposes of ineligibility for withholding of removal. The IIRIRA amendments on ineligibility for withholding of removal remain in current law. Some of the same ineligibility grounds apply to applicants for withholding of removal and applicants for asylum. As noted, however, asylum is also subject to a second set of restrictions, under which certain individuals are ineligible to apply for this form of relief. These restrictions include the requirement to apply for asylum within one year after arrival in the United States. Withholding of removal is not subject to an analogous set of restrictions. Another difference between withholding of removal and asylum concerns adjustment to LPR status. The INA provides for the adjustment of status of aliens granted asylum but not those granted withholding of removal (for further comparison of withholding of removal and asylum, see " Implementing Regulations ," below). In March 1997, DOJ issued an interim rule, effective April 1, 1997, to amend existing regulations to implement the IIRIRA provisions on asylum, withholding of removal, expedited removal, and other immigration procedures. In December 2000, DOJ published a final rule on asylum procedures, which addressed jurisdiction, asylum application procedures, and withholding of removal, among other issues. The December 2000 rule included language on eligibility for asylum and eligibility for withholding of removal under INA §241(b)(3). Regarding eligibility for asylum based on a well-founded fear of future persecution, the 2000 regulations stated, in part, "An applicant has a well-founded fear of persecution if: (A) The applicant has a fear of persecution in his or her country of nationality … on account of race, religion, nationality, membership in a particular social group, or political opinion; (B) There is a reasonable possibility of suffering such persecution if he or she were to return to that country." This language was similar to that in the 1990 rule. Unlike the earlier rule, however, the 2000 regulations also provided that an applicant would not be considered to have a well-founded fear of persecution if he or she could relocate within his or her home country "if under all the circumstances it would be reasonable to expect the applicant to do so." Regarding eligibility for withholding of removal under INA §241(b)(3) based on a future threat to one's life or freedom, the 2000 regulations, like the earlier 1990 regulations on withholding of deportation, stated that an applicant could demonstrate a future threat "if he or she can establish that it is more likely than not that he or she would be persecuted on account of race, religion, nationality, membership in a particular social group, or political opinion upon removal to that country." As with the regulations on asylum eligibility, the 2000 regulations on eligibility for withholding of removal provided that an applicant could not demonstrate a threat to life or freedom upon a finding that the applicant could avoid the threat by relocating within his or her home country if it were reasonable to expect him or her to do so. The December 2000 regulations on eligibility for asylum and withholding of removal under INA §241(b)(3) remain in effect. Comparing the above-cited standards for providing these two forms of relief in cases involving claims of future persecution, the threshold for granting withholding of removal ( more likely than not ) is higher than that for granting asylum ( reasonable possibility ). Regarding expedited removal, DOJ stated in the supplementary information to the March 1997 interim rule that for the time being, it would only apply the expedited removal provisions to arriving aliens (i.e., aliens arriving at ports of entry and certain others). At the same time, it reserved "the right to apply the expedited removal procedures to additional classes of aliens within the limits set by the statute, if, in the [INS] Commissioner's discretion, such action is operationally warranted." Beginning in 2002, DOJ and then DHS, which assumed primary responsibility for immigration under the Homeland Security Act, acted to apply the expedited removal procedures to additional classes of aliens. In November 2002, DOJ extended expedited removal to aliens arriving by sea who are not admitted or paroled and who have not been continuously present in the United States for the prior two years. In August 2004, DHS authorized the placing in expedited removal proceedings of aliens who are present in the United States without having been admitted or paroled, and are found inadmissible due to lack of proper documentation or to commission of fraud or willful misrepresentation to obtain documentation or another immigration benefit, in certain circumstances. These circumstances were that the aliens "are encountered by an immigration officer within 100 air miles of the U.S. international land border" and "have not established to the satisfaction of an immigration officer that they have been physically present in the United States continuously for the fourteen-day (14-day) period immediately prior to the date of encounter." Separate from asylum and withholding of removal under the INA, protection from removal is available to aliens in the United States who are more likely than not to be tortured in the country of removal, in accordance with the United Nations Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (Convention Against Torture, or CAT), which entered into force for the United States in November 1994. Under Article 3 of the CAT, "No State Party shall expel, return ("refouler") or extradite a person to another State where there are substantial grounds for believing that he would be in danger of being subjected to torture." Under current DHS and DOJ regulations, torture is defined, in part, as "any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a person … when such pain or suffering is inflicted by or at the instigation of or with the consent or acquiescence of a public official or other person acting in an official capacity." In February 1999, DOJ published an interim rule establishing procedures to implement U.S. obligations under Article 3 of the CAT in the removal process. These regulations have since been revised. DHS regulations set forth procedures for handling cases in which an alien subject to expedited removal expresses a fear of torture. In a process analogous to that for aliens subject to expedited removal who express a fear of persecution, DHS regulations provide that such an alien is to be interviewed by an asylum officer to determine if he or she has a credible fear of torture. To establish a credible fear of torture, an alien must show that "there is a significant possibility that he or she is eligible for" protection under the CAT. Eligibility for CAT protection, unlike for asylum, does not require the showing of a nexus between the torture claim and a protected ground (such as race). If the asylum officer makes an affirmative credible fear finding, the officer is to refer the case to an immigration judge for full consideration of the CAT application during standard removal proceedings. If the officer makes a negative finding, the alien may request a review of that determination by an immigration judge. If during removal proceedings the immigration judge determines that "the alien is more likely than not to be tortured in the country of removal," the alien is entitled to CAT protection. That protection is to be granted in the form of either withholding of removal or deferral of removal depending on the circumstances of the case. The February 1999 CAT rule also established another screening process—for reasonable fear of persecution or torture. Modeled on but separate from the credible fear of persecution or torture screening processes, reasonable fear screening applies to certain aliens who are not eligible for asylum (these are aliens ordered removed under INA §238(b) for the commission of certain criminal offenses or aliens whose deportation, exclusion, or removal is reinstated under INA §241(a)(5)). Under current DHS and DOJ regulations, if an alien in this category expresses a fear of returning to the country of removal, USCIS is to make a reasonable fear determination, subject to review by an immigration judge. To establish a reasonable fear of persecution, an alien must establish "a reasonable possibility that he or she would be persecuted on account of his or her race, religion, nationality, membership in a particular social group or political opinion"; this is the same standard used to establish eligibility for asylum. To establish a reasonable fear of torture, an alien must establish "a reasonable possibility that he or she would be tortured in the country of removal." If the alien receives a positive reasonable fear finding, the case is referred to an immigration judge to determine whether the alien is eligible for withholding of removal under INA §241(b)(3) or withholding of removal or deferral of removal under the CAT. DHS and DOJ regulations further state, however, that the granting of such withholding of removal or deferral of removal would not prevent the United States from removing the alien to a third country. While the IIRIRA amendments to the INA asylum provisions remain largely in place, subsequent laws have made further changes to the INA provisions. For example, the Real ID Act of 2005 amended the INA language on the conditions for granting asylum to add "burden of proof" provisions, which had previously been in regulations. These burden of proof provisions remain in law. They require an asylum applicant to show that "race, religion, nationality, membership in a particular social group, or political opinion was or will be at least one central reason for persecuting the applicant" to meet the definition of a refugee. The provisions further set forth standards for making determinations about an applicant's credibility and about the need for corroborating evidence to sustain an applicant's burden of proof. In addition, among its other asylum-related provisions, the Real ID Act eliminated the annual caps on asylee adjustment of status. The 2008 William Wilberforce Trafficking Victims Protection Reauthorization Act (TVPRA) added language to the INA asylum provisions that addressed asylum applications by unaccompanied alien children in the United States. This new language made certain statutory restrictions on applying for asylum inapplicable to these children and provided that a USCIS asylum officer would have initial jurisdiction over any asylum application filed by an unaccompanied child, even if the child was in removal proceedings. On November 9, 2018, DHS and DOJ jointly issued an interim final rule to govern "asylum claims in the context of aliens who are subject to, but contravene, a suspension or limitation on entry into the United States through the southern border with Mexico that is imposed by a presidential proclamation or other presidential order." That same day, President Donald Trump issued a proclamation to suspend immediately the entry into the United States of aliens who cross the Southwest border between ports of entry (see " Presidential Action "). According to the supplementary information accompanying the interim rule, the rule would serve to "channel inadmissible aliens to ports of entry, where such aliens could seek to enter and would be processed in an orderly and controlled manner." The interim rule, which is not in effect due to legal challenges, would bar an alien who enters the United States in contravention of the proclamation from eligibility for asylum. Under the rule, an asylum officer would make a negative credible fear of persecution determination in the case of such an alien. As explained in the supplementary information to the rule, however, aliens who enter the United States at the Southwest border without inspection would continue to be eligible for consideration for forms of protection from removal other than asylum—namely, withholding of removal under INA §241(b)(3) and protections under the CAT . The interim final rule addresses eligibility for asylum and screening procedures for aliens who enter the United States in contravention of the proclamation. Regarding claims for withholding of removal under the INA or withholding or deferral of removal under the CAT, the rule establishes that such claims would be assessed under the reasonable fear standard (see " Convention Against Torture Protection and Implementing Regulations "). The supplementary information includes the following summary of the two-stage screening protocol the rule would institute: Aliens determined to be ineligible for asylum by virtue of contravening a proclamation, however, would still be screened, but in a manner that reflects that their only viable claims would be for statutory withholding or CAT protection…. After determining the alien's ineligibility for asylum under the credible-fear standard, the asylum officer would apply the long-established reasonable-fear standard to assess whether further proceedings on a possible statutory withholding or CAT protection claim are warranted. This rule is being challenged in federal court. On December 19, 2018, a federal district court judge in California granted a nationwide preliminary injunction against it. On December 20, 2018, DHS announced the Migrant Protection Protocols (MPP), under which "individuals arriving in or entering the United States from Mexico—illegally or without proper documentation—may be returned to Mexico for the duration of their immigration proceedings." The U.S. government notified the Mexican government about the MPP that same day. The MPP is separate and distinct from a safe third country agreement (see " Safe Third Country Agreements "). The DHS press release announcing the Migrant Protection Protocols characterized them as "historic measures" to address the "illegal immigration crisis." In the words of the press release: Aliens trying to game the system to get into our country illegally will no longer be able to disappear into the United States, where many skip their court dates. Instead, they will wait for an immigration court decision while they are in Mexico. 'Catch and release' will be replaced with 'catch and return.' In doing so, we will reduce illegal migration by removing one of the key incentives that encourages people from taking the dangerous journey to the United States in the first place. This will also allow us to focus more attention on those who are actually fleeing persecution. According to DHS, the U.S. government will invoke INA §235(b)(2)(C), which permits the return of certain aliens arriving in the United States on land from a foreign contiguous territory to that foreign territory pending standard removal proceedings. An alien potentially subject to this return provision under the INA is an applicant for admission who "is not clearly and beyond a doubt entitled to be admitted" and thus is "detained for a [standard removal] proceeding." INA §235(b)(2)(C) is explicitly inapplicable to aliens who are determined to be subject to expedited removal. On January 28, 2019, USCIS and DHS's Customs and Border Protection (CBP) issued memoranda on MPP implementation. The CBP memorandum announced that the agency would begin implementing the MPP that day. According to the memorandum, "MPP implementation will begin at the San Ysidro port of entry [in California], and it is anticipated that it will be expanded in the near future." Also on January 28, 2019, CBP issued "MPP Guiding Principles," which included the following: "To implement the MPP, aliens arriving from Mexico who are amenable to the process … and who in an exercise of discretion the officer determines should be subject to the MPP process, will be issued [a] Notice to Appear (NTA) and placed into Section 240 removal proceedings. They will then be transferred to await proceedings in Mexico." Among the aliens identified as " not amenable to MPP" in the CBP guiding principles document are unaccompanied alien children, citizens or nationals of Mexico, aliens processed for expedited removal, and aliens who are more likely than not to face persecution or torture in Mexico. The MPP is in effect as of the date of this report, but it remains unclear how DHS is making decisions about which aliens to process under the protocols. The MPP is being challenged in federal court. Asylum-related legislation was considered in the 115 th Congress. Two immigration bills that were the subjects of unsuccessful House floor votes in June 2018—the Securing America's Future Act of 2018 ( H.R. 4760 ) and the Border Security and Immigration Reform Act of 2018 ( H.R. 6136 )—contained similar provisions on asylum. A third asylum-related House bill (the Asylum Reform and Border Protection Act of 2017 ( H.R. 391 )) that included some of the same provisions as the above measures was ordered to be reported by the House Judiciary Committee. In addition, the House and the Senate acted on several other measures containing more limited language on asylum. H.R. 4760 and H.R. 6136 , as considered on the House floor, included various provisions related to asylum. Both bills would have amended the INA "safe third country" asylum provision, under which an alien is ineligible to apply for asylum if it is determined that he or she can be removed to a safe country "pursuant to a bilateral or multilateral agreement" (see " Safe Third Country Agreements "). H.R. 4760 and H.R. 6136 would have eliminated the "pursuant to a bilateral or multilateral agreement" language. Both bills would have added a new provision to the INA stating that an alien's asylum status would be terminated if the alien returned to his or her home country (from which the alien sought refuge in the United States) absent changed country conditions. Both bills would have given DHS discretionary authority to waive this provision in individual cases. H.R. 4760 also included an exception to this provision for certain Cubans. Both bills would have amended the INA provisions on frivolous asylum applications (see " Frivolous or Fraudulent Asylum Claims "). Current INA provisions make an alien permanently ineligible for immigration benefits if he or she knowingly files a frivolous asylum application after receiving notice of the consequences for doing so. The bills would have changed the notification process. They would have required that a written notice appear on the asylum application advising the applicant of the consequences of filing a frivolous application. The bills would also have added language to the INA explaining that an application is frivolous if "it is so insufficient in substance that it is clear that the applicant knowingly filed the application solely or in part to delay removal from the United States, to seek employment authorization as an applicant for asylum" or "any of the material elements are knowingly fabricated." H.R. 4760 and H.R. 6136 also would have changed the INA definition of credible fear of persecution, which an alien in expedited removal has to show to be able to pursue an asylum claim. The bills would have added a new requirement to the definition—that "it is more probable than not that the statements made by, and on behalf of, the alien in support of the alien's claim are true." The bills would also have required audio or audio/visual recording of expedited removal and credible fear interviews. H.R. 391 , as ordered to be reported by the House Judiciary Committee, would have amended the INA provisions on safe third country removals, termination of asylum upon return to the home country, frivolous asylum applications, and credible fear similarly to H.R. 4760 and H.R. 6136 . In addition, this bill would have made a number of other changes to the asylum-related language in the INA. Among its asylum-related provisions, H.R. 391 would have clarified the INA definition of a refugee (which asylum applicants also have to satisfy), specifically the "membership in a particular social group" ground. It would have defined particular social group , which is not currently defined in statute, to mean a group that is "defined with particularity," is "socially distinct," and has members who share "a common immutable characteristic." H.R. 391 would have explicitly provided that the "membership in a particular social group" ground would cover individuals who fail or refuse "to comply with any law or regulation that prevents the exercise of the individual right of that person to direct the upbringing and education of a child of that person (including any law or regulation preventing homeschooling)." At the same time, the bill sought to prohibit the application of this ground to asylum cases involving criminal gang membership or activity. H.R. 391 also included language related to the INA asylum provisions that enumerate certain determinations about an alien that preclude the granting of asylum. One of these determinations is that the alien was "firmly resettled in another country" before coming to the United States and requesting asylum. H.R. 391 would have considered the "firmly resettled" criterion to be satisfied "by evidence that the alien can live in such country (in any legal status) without fear of persecution." Other bills that saw action in the 115 th Congress included more limited language on asylum. For example, the Criminal Alien Gang Member Removal Act ( H.R. 3697 ), as passed by the House, would have added a new item to the INA list of determinations that preclude the granting of asylum. It would have made an alien ineligible for asylum if he or she was inadmissible or deportable based on new INA criminal gang membership or criminal gang-related activity grounds that the bill would have established. Under H.R. 3697 , such an alien would also have been exempt from the INA restriction on removing an alien to a country where his or her life or freedom would be threatened based on race, religion, nationality, membership in a particular social group, or political opinion. Asylum-related provisions similar to those in H.R. 3697 were included in two other measures—the Michael Davis, Jr. and Danny Oliver in Honor of State and Local Law Enforcement Act ( H.R. 2431 ), as ordered to be reported by the House Judiciary Committee, and the SECURE and SUCCEED Act ( S.Amdt. 1959 to H.R. 2579 ), which failed on a Senate floor vote in February 2018. In addition, these two measures would have made further changes to the INA's asylum-related provisions. They would have made aliens ineligible for asylum if they were inadmissible on a broader array of terrorist-related grounds and would have exempted aliens who were inadmissible on this larger set of terrorist grounds from the general INA restriction on removing an alien to a country where his or her life or freedom would be threatened. H.R. 2431 and S.Amdt. 1959 would also have amended the INA provisions on asylee adjustment of status to LPR status. Current INA provisions generally require that applicants for adjustment be admissible to the United States as immigrants, but they grant the Secretary of Homeland Security or the Attorney General broad authority to waive applicable inadmissibility provisions for humanitarian purposes. While there were significant differences among the asylee adjustment of status amendments in S.Amdt. 1959 and H.R. 2431 , both measures would have limited existing DHS/DOJ inadmissibility waiver authority and added new deportability-related requirements to the INA asylee adjustment of status provisions. Citing constitutional and statutory authority, President Trump issued a presidential proclamation on November 9, 2018, to immediately suspend the entry into the United States of aliens who cross the Southwest border between ports of entry. The proclamation indicates that its entry suspension provisions will expire 90 days after its issuance date or on the date that the United States and Mexico reach a bilateral safe country agreement, whichever is earlier. Also on November 9, 2018, DHS and DOJ jointly issued an interim final rule to bar an alien who enters the United States in contravention of the proclamation from eligibility for asylum. The proclamation and the rule are being challenged in federal court (see " 2018 Interim Final Rule "). On February 7, 2019, President Trump renewed the proclamation with the issuance of a new proclamation with the same name. Asylum is a complex area of immigration law and policy. Much of the recent debate surrounding it has focused on efforts by the Trump Administration to tighten the asylum system. Several key policy considerations about asylum are highlighted below. Some, such as the grounds for granting asylum, have been long-standing issues for policymakers, while others, such as safe third country agreements, have been garnering attention more recently. There has been much discussion about an increasing backlog of asylum applications. The term asylum backlog may suggest that there is a single queue of pending asylum cases. In fact, as discussed above, USCIS and EOIR separately adjudicate affirmative asylum cases and defensive asylum cases, respectively. ( Backlog as used in this report is synonymous with pending caseload .) The numbers of pending USCIS affirmative asylum applications and EOIR defensive asylum cases have varied over the years, impacted by factors including international developments, changes to U.S. immigration laws, and agency resources. In the case of affirmative applications, there have been significant fluctuations in the size of the backlog over the history of the asylum program. Since FY2009, however, backlogs of both USCIS affirmative asylum applications and EOIR cases have increased annually. At the end of FY2009, there were about 6,000 pending affirmative asylum applications at USCIS ; that number stood at about 320,000 at the end of FY2018. During this same period, the number of pending cases before EOIR increased from about 224,000 at the end of FY2009 to about 786,000 at the end of FY2018. Not all the EOIR cases necessarily involve an asylum claim, however. According to EOIR, as of June 18, 2018, it had about 720,000 pending cases, and some 325,000 of those (about 45%) included asylum applications. A variety of arguments are made for prioritizing the reduction of the asylum backlog. These include the need to preserve the integrity of the asylum process and to provide protection in a timely manner to legitimate asylum seekers. More controversial arguments for addressing the backlog center on the perceived need to eliminate an incentive for unauthorized aliens without valid asylum claims to enter the United States and file frivolous applications (see " Frivolous or Fraudulent Asylum Claims "). Regarding the affirmative asylum backlog, USCIS described its January 2018 decision to interview more recent asylum applications before older filings as "an attempt to stem the growth of the agency's asylum backlog." There is debate about whether this is an effective and judicious strategy. While some point to signs that this processing change is reducing the backlog, others argue that it is a wrongheaded approach and that USCIS should instead be dedicating more resources to adjudicating asylum cases. Those in the latter group argue that individuals with older, valid asylum claims will face even longer waits for relief under the last in-first out system. DHS efforts to reduce the asylum backlog are also impacting other humanitarian admissions programs. According to the report Proposed Refugee Admissions for Fiscal Year 2019 , "DHS in FY 2017 and FY 2018 shifted a significant proportion of its refugee officers to processing affirmative asylum applications and conducting credible fear and reasonable fear screenings. This reduced the number of refugee interviews that could be conducted abroad in those years." The report also indicates that the Administration plans to "continue to shift some refugee officers to assist the Asylum Division" in FY2019 to address the asylum backlog. Regarding the backlog of immigration court cases, the director of EOIR testified at an April 2018 Senate hearing that the agency was addressing challenges that had contributed to the backlog. In his prepared testimony, he cited the challenges of "declining case completions, protracted hiring times for new immigration judges, and the continued use of paper files." In June 2018 remarks at EOIR, Attorney General Sessions characterized the large and growing backlog of immigration court cases as unacceptable and outlined steps being taken to reduce it. In his prepared remarks, he asked each EOIR judge to complete at least 700 cases annually, which he described as "about the average." He said, "Setting this expectation is a rational management policy to ensure consistency, accountability, and efficiency in our immigration court system." He also explained that additional immigration judges were being hired and that DOJ was working with DHS to "deploy judges electronically and by video-teleconference." Some question whether the approach being taken by DOJ to reduce the EOIR backlog—particularly the annual case completion goal—is advisable and will succeed. For example, Ashley Tabaddor, president of the National Association of Immigration Judges, has expressed concern about the ability of immigration judges to adjudicate asylum cases within the time frame dictated by that yearly goal. The INA definition of a refugee identifies five persecution grounds as the bases for receiving refugee status or asylum: race, religion, nationality, membership in a particular social group, and political opinion. It provides no definitions of these terms. As noted, however, it does state that an individual who has been forced to have an abortion or undergo sterilization or has been persecuted for resistance to a coercive population control program is to be considered to have been persecuted on the basis of political opinion. Legislation considered in the 115 th Congress would have further amended the INA refugee definition to provide that an individual who has been persecuted for failure to comply with or resistance to any law or regulation that prevents homeschooling is to be considered to have been persecuted on the basis of membership in a particular social group (see " H.R. 391 "). In June 2018, Attorney General Sessions issued a decision regarding the adjudication of asylum claims based on the "membership in a particular social group" ground. In the past, asylum had been granted to certain victims of domestic violence based on a finding of persecution or a well-founded fear of persecution on account of "membership in a particular social group." Attorney General Sessions vacated a Board of Immigration Appeals' 2016 decision in one of these cases and remanded the case to the immigration judge for further proceedings, arguing that the appropriate legal standards had not been applied. He reached the following conclusion about asylum cases involving private criminal activity (footnotes excluded): Generally, claims by aliens pertaining to domestic violence or gang violence perpetrated by non-governmental actors will not qualify for asylum. While I do not decide that violence inflicted by non-governmental actors may never serve as the basis for an asylum or withholding application based on membership in a particular social group, in practice such claims are unlikely to satisfy the statutory grounds for proving group persecution that the government is unable or unwilling to address. The mere fact that a country may have problems effectively policing certain crimes—such as domestic violence or gang violence—or that certain populations are more likely to be victims of crime, cannot itself establish an asylum claim. The decision further noted that because claims by aliens pertaining to domestic violence or gang violence perpetrated by nongovernmental actors generally will not qualify for asylum, they would also generally not meet the threshold for a finding of a credible fear of persecution (see " Inspection of Arriving Aliens "). In July 2018, USCIS issued a policy memorandum to provide guidance to its asylum officers in light of the Attorney General's decision. Highlighting required findings about the home government in cases involving private violence, the memorandum stated: Few gang-based or domestic-violence claims involving particular social groups defined by the members' vulnerability to harm may merit a grant of asylum or refugee status—or pass the "significant possibility" test in credible fear screenings …—because an applicant must prove, or establish a significant possibility that, his or her government is unable or unwilling to protect him or her…. Again, the home government must either condone the behavior or demonstrate a complete helplessness to protect victims of such alleged persecution. Following issuance of the Attorney General's decision, immigration advocates expressed worry that the decision and the related USCIS policy memorandum could have wide-sweeping consequences, particularly for asylum seekers from Central America. In a letter to the New York Times , a counsel with the Tahirih Justice Center, which advocates for immigrant women and girls fleeing gender-based violence, wrote, "As a result of that ruling, and the subsequent policy guidance, immigration officers may now feel emboldened to deny asylum to women fleeing domestic violence, even under the most life-threatening circumstances." On December 19, 2018, a federal district court judge in Washington, DC, ruled on a case challenging the policies regarding credible fear of persecution determinations set forth in former Attorney General Sessions' decision and the USCIS policy memorandum. The judge permanently enjoined the U.S. government from continuing some of the new policies. S ome who a re concerned about the potential impact of the former Attorney General's decision on women seeking asylum have discussed the possibility of amending the underlying INA definition of a refugee to explicitly address gender-based asylum claims. Among the l egislative options that have been put forward a re to add "gender" to the list of persecution gro unds or "to define the phrase ' particular social group' by amending the law to include a non-exclusive list of (currently) common gender-based asylum claims, including domestic violence." Separate from the 2018 decision by former Attorney General Sessions and the related USCIS policy memorandum discussed in the preceding section, the credible fear of persecution threshold has been a focus of attention recently as the number of individuals being screened for and found to have a credible fear has grown. Individuals who are found to have a credible fear may remain in the United States while their court case proceeds. As noted, the INA asylum provisions define credible fear of persecution to mean "there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum." House bills considered in the 115 th Congress would have added a new requirement to this definition—that "it is more probable than not that the statements made by, and on behalf of, the alien in support of the alien's claim are true." USCIS Director Francis Cissna has endorsed a tightening of the credible fear of persecution standard. In prepared testimony for a May 2018 House hearing on border security, he stated, "The simple reality is that those who wish to gain access to or remain in the United States know they can likely effect that access and then delay their removal by simply saying the 'magic words' of 'fear' or 'asylum.' The standard for credible fear screenings at the border has been set so low that nearly everyone meets it." Others disagree that the credible fear standard should be raised. In a 2018 policy brief, the American Immigration Lawyers Association (AILA) argues that "the lower threshold for credible fear determinations is necessary precisely because asylum seekers arriving at the border are typically detained, traumatized, and have limited access to counsel and documentation to support their claims." There have been concerns about frivolous asylum applications since the establishment of the U.S. asylum program. As noted, the 1980 interim regulations made reference to "non-frivolous" applications, and IIRIRA amended the INA to permanently bar an individual who knowingly files a frivolous asylum application from receiving immigration benefits. Under current regulations, an asylum application is considered "frivolous" for purposes of the INA benefit bar "if any of its material elements is deliberately fabricated." These regulations also provide that for purposes of the bar, "a finding that an alien filed a frivolous asylum application shall not preclude the alien from seeking withholding of removal." The issue of frivolous asylum claims was highlighted by Attorney General Sessions in 2017 remarks, in which he described the asylum system as being "subject to rampant abuse and fraud." He further said, "And as this system becomes overloaded with fake claims, it cannot deal effectively with just claims." Similarly, in his May 2018 House testimony, USCIS Director Cissna stated, "The integrity of our entire immigration system is at risk because frivolous asylum applications impede our ability to help people who really need it." Several House bills considered in the 115 th Congress sought to tighten language in the INA on frivolous asylum claims. In his May 2018 testimony, USCIS Director Cissna called for legislation to address the problem of frivolous claims that would, among other provisions, "impos[e] and enforce[e] penalties for the filing of frivolous asylum applications." A key point of contention in the current debate about frivolous or fraudulent asylum claims is the scope of the problem. According to a researcher at the immigration-restrictionist Center for Immigration Studies, "Most asylum claims nowadays, whether in Europe or the United States, are not genuine. Migrants are more and more using the asylum ticket to gain entry into a country and stay." Other experts, such as Law Professor Lindsay M. Harris, reach different conclusions about the prevalence of fraud in recent asylum applications: "One of the humanitarian crises producing refugees happens to be south of our border, in Central America, and this accounts for the exponential increase in asylum claims and individuals seeking protection in the U.S. through the credible fear system, rather than a sudden increase in fraudulent claims." Under current law, an asylum seeker who is not otherwise eligible for employment authorization cannot be granted such authorization until 180 days after filing an application for asylum. In general, under DHS regulations, an asylum applicant cannot submit an application for employment authorization and an employment authorization document (EAD) until 150 days after a complete asylum application has been received. There is no fee for an asylum applicant's initial application for employment authorization. Renewal applications are subject to standard fees. Although there seems to be general agreement that asylum seekers should be eligible for employment authorization at some point, aspects of this policy have long been debated. For example, for more than 20 years, some have argued that the availability of employment authorization creates an incentive for individuals to apply for asylum solely to be able to work legally in the United States. In his prepared testimony for the May 2018 House hearing on border issues, USCIS Director Cissna stated, "While the number of mala fide claims is difficult to estimate, experience from the 1990s indicates that a significant amount of the growth in receipts since FY 2014 may be linked to individuals pursuing work authorization and not necessarily asylum status." Others dismiss the idea that asylum seekers act in response to particular U.S. policies, arguing that they are motivated by desperate circumstances. Commenting on Central American asylum seekers, a spokesperson for the U.N. High Commissioner for Refugees said, "People are leaving because they are suffering from high levels of violence from gangs and other organized criminal groups.… This flow of families from Central America will not stop because if the root causes are still there these people will keep coming to the U.S. or to other countries." The complex system set up to track when an asylum seeker has reached the 180-day point for employment authorization purposes—known as the asylum EAD clock —has also been controversial. There are various events that stop the asylum EAD clock. USCIS and EOIR characterize these as "delays requested or caused by an applicant while his or her asylum application is pending with USCIS and/or EOIR" (e.g., the applicant's "failure to appear at an interview or fingerprint appointment" or "the applicant or his or her attorney asks for additional time to prepare the case"). Over the years, immigration advocacy groups have been critical of clock-related USCIS and EOIR policies and actions. In November 2017, the Transactional Records Access Clearinghouse (TRAC) published the report Asylum Outcome Continues to Depend on the Judge Assigned , which examined asylum decisions of judges on the same immigration court. It was based on combined data from FY2012 through FY2017 for judges who decided at least 100 asylum cases during this six-year period. Among its findings, the report identified the Newark and San Francisco Immigration Courts as having the greatest judge-to-judge differences in asylum cases decided during that time. For the San Francisco court, for example, it stated that "the odds of denial varied from only 9.4 percent all the way up to 97.1 percent depending upon the judge." The TRAC analysis assumes that "when individual judges [on the same court] handle a sufficient number of asylum requests, random case assignment will result in each judge being assigned a roughly equivalent mix of 'worthy' cases." It, thus, posits, "any large differences in the denial rates of individual judges are unlikely to be the result of differences in the nature of the incoming cases. Instead, they are likely to reflect the personal perspective that each judge brings to the bench." TRAC first reported on differences in asylum decisions by immigration judges nationwide based on an analysis of asylum cases decided by judges from FY1994 through early FY2005. Published in July 2006, this TRAC report found a "great disparity in the rate at which individual immigration judges declined the applications." Seemingly taking issue with the TRAC analysis but not mentioning it by name, a November 2007 EOIR fact sheet, "Asylum Variations in Immigration Court," stated: Asylum adjudication does not lend itself well to statistical analysis. Each asylum application is adjudicated on a case-by-case basis, and each has many variables that need to be considered by an adjudicator. It is therefore important that any statistical analysis acknowledge these variables and not draw comparisons between substantially different cases. The U.S. Government Accountability Office (GAO) examined variations in the outcomes of asylum cases in reports issued in 2008 and 2016. The 2008 report, which was based on an analysis of asylum case data from FY1994 through April 2007, found that "within immigration courts, there were pronounced differences in grant rates across immigration judges." While acknowledging the limits of its analysis, GAO concluded that "the size of the disparities in asylum grant rates creates a perception of unfairness in the asylum adjudication process within the immigration court system." GAO analyzed EOIR data for FY1995 through FY2014 for its 2016 follow-up report. Although it was unable to control for "the underlying facts and merits of individual asylum applications," GAO maintained that the available data allowed it to compare asylum outcomes across immigration courts and immigration judges. It estimated that for the May 2007-FY2014 period since its 2008 report, "the affirmative and defensive asylum grant rates would vary by 47 and 57 percentage points, respectively, for the same representative applicant whose case was heard by different immigration judges." Under the INA, an alien is ineligible to apply for asylum in the United States if he or she can be removed, pursuant to a bilateral or multilateral agreement, to a third country where the "alien's life or freedom would not be threatened on account of race, religion, nationality, membership in a particular social group, or political opinion, and where the alien would have access to a full and fair procedure for determining a claim to asylum or equivalent temporary protection." The United States and Canada signed a safe third country agreement in 2002, which went into effect in 2004. Under the agreement, asylum seekers must request protection in the first of the two countries they arrive in, unless they qualify for an exception. Under DHS regulations, a USCIS asylum officer must determine whether an alien arriving in the United States at a U.S.-Canada land border port of entry seeking asylum is subject to removal to Canada in accordance with the U.S.-Canada safe third country agreement. The Trump Administration has had preliminary discussions with Mexico about a possible safe third country agreement. According to an unidentified senior DHS official, "We believe the flows [of Central Americans into the United States] would drop dramatically and fairly immediately" if a U.S.-Mexico safe country agreement went in effect. Human Rights First, an advocacy organization, opposes such an agreement. The group found that Mexico was not a safe third country in 2017 and indicated in a July 2018 press release that that was still the case: "Since [last year], the dangers facing refugees and migrants in Mexico have escalated. Recent reports confirm that Mexican authorities continue to improperly return asylum seekers to their countries of persecution and that the deficiencies in the Mexican asylum system have grown." Taking a different approach, House bills considered in the 115 th Congress would have amended the INA safe third country asylum provision to eliminate the "pursuant to a bilateral or multilateral agreement" language, presumably to provide for removals to a third country without a bilateral agreement. The asylum provisions in the INA are unusual in providing a standard mechanism for eligible unauthorized aliens in the United States to apply for a legal immigration status. This aspect of asylum also serves to make this form of relief particularly controversial, especially at times when large numbers of asylum seekers are arriving in the United States. The high volume of asylum cases has elicited policy responses from the Trump Administration, as described in this report. In October 2018 remarks at an immigration conference, USCIS Director Cissna offered context for DHS's and DOJ's asylum-related actions from the Administration's perspective when he referenced "challenges associated with surges at the U. S. southern border, where migrants know that they can exploit a broken system to enter the U.S., avoid removal, and remain in the country." While the Administration maintains that its policies adhere to the INA and are necessary to preserve the integrity of the immigration system, others argue that it is tightening the asylum process in contravention of the law. It remains to be seen whether the Administration will continue to try to reshape U.S. asylum policy and whether Congress will take action, as it has at times in the past, to make legislative changes to the asylum system. Appendix A. Affirmative Asylum Applications Table A-1 provides the underlying data for Figure 1 on new affirmative asylum applications filed annually with USCIS since FY1995. Table A-2 expands on the data in Table A-1 to show the top 10 nationalities filing new affirmative asylum applications annually since FY2007. For each of the top 10 nationalities for each year, Table A-2 provides a rank and a percentage of all applications that were filed by applicants of that nationality. The table also includes annual data on the total number of applications filed by all applicants (the latter totals match the data in Table A-1 ). As shown in Table A-2 , the top four nationalities filing new affirmative asylum applications in FY2007 (China, Haiti, Mexico, and Guatemala) remained in the top 10 throughout the period, with China holding the top spot in all years except FY2017 and FY2018. Between FY2009 and FY2012, Chinese nationals filed one-third of all new affirmative asylum applications each year. In FY2017 and FY2018, however, China's rank fell to 2 nd and 4 th , respectively. In each of those two years, Venezuelans filed more new affirmative asylum applications than nationals of any other country, accounting for one-fifth of all applications filed in FY2017 and more than a quarter of the total in FY2018. Since FY2015, nationals of Venezuela and four other Latin American countries (Guatemala, El Salvador, Mexico, and Honduras) have accounted for five of the top six nationalities filing new affirmative asylum applications each year. Appendix B. USCIS Asylum Decisions and Credible Fear Findings Table B-1 provides the underlying data for Figure 2 on USCIS decisions on affirmative asylum applications issued annually from FY2009 through FY2017. It also includes an additional small outcome category (Cases Dismissed). These are cases where the applicant did not appear for fingerprinting/ biometrics collection. For the cases referred to an immigration judge (which involve applicants without lawful status), Table B-1 distinguishes among three mutually exclusive subcategories: cases that were interviewed by USCIS; cases that were interviewed by USCIS where the applicant did not meet the filing deadline; and cases that were not interviewed by USCIS. (The Referrals "Total" column in Table B-1 matches the Referrals data displayed in Figure 2 .) In addition to deciding affirmative asylum cases, USCIS is tasked with assessing the credible fear of persecution claims made by individuals in expedited removal. Table B-2 and Table B-3 provide the underlying credible fear-related data for Figure 4 . Table B-2 contains data on referrals of credible fear claims to USCIS and USCIS completions of these cases. Table B-3 provides breakdowns of the Table B-2 "Completions" data by case outcome. It also provides the percentage of the completed cases in which credible fear was found. Appendix C. Defensive Asylum Applications The "Total Applications" column in Table C-1 provides the underlying data for Figure 3 on defensive asylum applications filed annually since FY2008. In addition, Table C-1 provides data on the two components of that total: (1) asylum applications originally filed as affirmative applications with USCIS (column 2), and (2) asylum applications originally filed as defensive applications with EOIR (column 3) (see " Defensive Asylum "). As shown in Table C-1 , the growth in the total number of defensive asylum applications filed in recent years prior to FY2018 has been driven mainly by an increase in asylum applications first filed in immigration court. Appendix D. EOIR Asylum Decisions EOIR immigration judges decide defensive asylum cases. An asylum application is defensive when the applicant is in standard removal proceedings in immigration court (see " Defensive Asylum "). Table D-1 provides the underlying data for Figure 5 on defensive asylum cases decided annually since FY2009. Table D-2 provides data on a subset of EOIR asylum decisions involving credible fear claims. It is limited to decisions in defensive asylum cases that originated with an individual receiving a positive credible fear of persecution finding from USCIS.
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Asylum is a complex area of immigration law and policy. While much of the recent debate surrounding asylum has focused on efforts by the Trump Administration to address asylum seekers arriving at the U.S. southern border, U.S. asylum policies have long been a subject of discussion. The Immigration and Nationality Act (INA) of 1952, as originally enacted, did not contain any language on asylum. Asylum provisions were added and then revised by a series of subsequent laws. Currently, the INA provides for the granting of asylum to an alien who applies for such relief in accordance with applicable requirements and is determined to be a refugee. The INA defines a refugee, in general, as a person who is outside his or her country of nationality and is unable or unwilling to return to that country because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion. Under current law and regulations, aliens who are in the United States or who arrive in the United States, regardless of immigration status, may apply for asylum (with exceptions). An asylum application is affirmative if an alien who is physically present in the United States (and is not in removal proceedings) submits an application to the Department of Homeland Security's (DHS's) U.S. Citizenship and Immigration Services (USCIS). An asylum application is defensive when the applicant is in standard removal proceedings with the Department of Justice's (DOJ's) Executive Office for Immigration Review (EOIR) and requests asylum as a defense against removal. An asylum applicant may receive employment authorization 180 days after the application filing date. Special asylum provisions apply to aliens who are subject to a streamlined removal process known as expedited removal. To be considered for asylum, these aliens must first be determined by a USCIS asylum officer to have a credible fear of persecution. Under the INA, credible fear of persecution means that "there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum." Individuals determined to have a credible fear may apply for asylum during standard removal proceedings. Asylum may be granted by USCIS or EOIR. There are no numerical limitations on asylum grants. If an alien is granted asylum, his or her spouse and children may also be granted asylum, as dependents. A grant of asylum does not expire, but it may be terminated under certain circumstances. After one year of physical presence in the United States as asylees, an alien and his or her spouse and children may be granted lawful permanent resident status, subject to certain requirements. The Trump Administration has taken a variety of steps that would limit eligibility for asylum. As of the date of this report, legal challenges to these actions are ongoing. For its part, the 115th Congress considered asylum-related legislation, which generally would have tightened the asylum system. Several bills contained provisions that, among other things, would have amended INA provisions on termination of asylum, credible fear of persecution, frivolous asylum applications, and the definition of a refugee. Key policy considerations about asylum include the asylum application backlog, the grounds for granting asylum, the credible fear of persecution threshold, frivolous asylum applications, employment authorization, variation in immigration judges' asylum decisions, and safe third country agreements.
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Congress has demonstrated renewed interest in Mexico, a top trade partner and energy supplier with which the United States shares a nearly 2,000-mile border and strong cultural, familial, and historical ties (see Figure 1 ). Economically, the United States and Mexico are interdependent, and Congress closely followed efforts to renegotiate NAFTA, which began in August 2017, and ultimately resulted in a proposed United States-Mexico-Canada Agreement (USMCA) signed in November 2018. Similarly, security conditions in Mexico and the Mexican governments' ability to manage U.S.-bound migration flows affect U.S. national security, particularly at the Southwest border. Five months into his six-year term, Mexican President Andrés Manuel López Obrador enjoys an approval ratings of 78%, even as his government is struggling to address rising insecurity and sluggish growth. Discontent with Mexico's traditional parties and voters' desire for change led them to elect López Obrador president with 53% of the vote. Some fear that López Obrador, whose National Regeneration Movement (MORENA) coalition captured legislative majorities in both chambers of the Congress, will reverse the reforms enacted in 2013-2014. Others predict that pressure from business groups, civil society, and some legislators and governors may constrain López Obrador's populist tendencies. This report provides an overview of political and economic conditions in Mexico, followed by assessments of selected issues of congressional interest in Mexico: security and foreign aid, extraditions, human rights, trade, migration, energy, education, environment, and water issues. Over the past two decades, Mexico has transitioned from a centralized political system dominated by the Institutional Revolutionary Party (PRI), which controlled the presidency from 1929-2000, to a true multiparty democracy. Since the 1990s, presidential power has become more balanced with that of Mexico's Congress and Supreme Court. Partially as a result of these new constraints on executive power, the country's first two presidents from the conservative National Action Party (PAN)—Vicente Fox (2000-2006) and Felipe Calderón (2006-2012)—struggled to enact some of the reforms designed to address Mexico's economic and security challenges. The Calderón government pursued an aggressive anticrime strategy and increased security cooperation with the United States. Mexico arrested and extradited many drug kingpins, but some 60,000 people died due to organized crime-related violence. Mexico's security challenges overshadowed some of the government's achievements, including its economic stewardship during the global financial crisis, health care expansion, and efforts on climate change. In 2012, the PRI regained control of the presidency 12 years after ceding it to the PAN with a victory by Enrique Peña Nieto over López Obrador of the leftist Democratic Revolutionary Party (PRD). López Obrador then left the PRD and founded the MORENA party. Voters viewed the PRI as best equipped to reduce violence and hasten economic growth, despite concerns about its reputation for corruption. In 2013, Peña Nieto shepherded structural reforms through a fragmented legislature by forming a "Pact for Mexico" agreement among the PRI, PAN, and PRD. The reforms addressed a range of issues, including education, energy, telecommunications, access to finance, and politics (see Table A-1 in the Appendix ). The energy reform led to foreign oil and gas companies committing to invest $160 billion in the country. Despite that early success, Peña Nieto left office with extremely low approval ratings (20% in November 2018) after presiding over a term that ended with record levels of homicides, moderate economic growth (averaging 2% annually), and pervasive corruption and impunity. Peña Nieto's approval rating plummeted after his government botched an investigation into the disappearance of 43 students in Ayotzinapa, Guerrero in September 2014. Reports that surfaced in 2014 of how Peña Nieto, his wife, and his foreign minister benefitted from ties to a firm that won lucrative government contracts, further damaged the administration's reputation. In 2017, reports emerged that the Peña Nieto government used spyware to monitor its critics, including journalists. On July 1, 2018, Andrés Manuel López Obrador and his MORENA coalition dominated Mexico's presidential and legislative elections. Originally from the southern state of Tabasco, López Obrador is a 65-year-old former mayor of Mexico City (2000-2005) who ran for president in the past two elections. After his loss in 2012, he left the center-left Democratic Revolutionary Party (PRD) and established MORENA. MORENA, a leftist party, ran in coalition with the socially conservative Social Encounter Party (PES) and the leftist Labor Party (PT). López Obrador won 53.2% of the presidential vote, more than 30 percentage points ahead of his nearest rival, Ricardo Anaya, of the PAN/PRD/Citizen's Movement (MC) alliance who garnered 22.3% of the vote. López Obrador won in 31 of 32 states (see Figure 2 ). The PRI-led coalition candidate, José Antonio Meade, won 16.4% of the vote followed by Jaime Rodríguez, Mexico's first independent presidential candidate, with 5.2%. Andrés Manuel López Obrador's victory signaled a significant change in Mexico's political development. López Obrador won in 31 of 32 states, demonstrating that he had broadened his support from his base in southern Mexico.The presidential election results have prompted soul-searching within the traditional parties and shown the limits of independent candidates. Anaya's defeat provoked internal struggles within the PAN. Meade's performance demonstrated voters' deep frustration with the PRI. In addition to the presidential contest, all 128 seats in the Mexican senate and 500 seats in the chamber of deputies were up for election. Senators serve for six years, and deputies serve for three. Beginning this cycle, both senators and deputies will be eligible to run for reelection for a maximum of 12 years in office. MORENA's coalition won solid majorities in the Senate and the Chamber which convened on September 1, 2018. As of April 2019, the ruling coalition controls 70 of 128 seats in the Senate and 316 of 500 seats in the Chamber. The MORENA coalition lacks the two-thirds majority it needs to make constitutional changes or overturn reforms passed in 2013. The PAN is the second-largest party in each chamber. Mexican voters gave López Obrador and MORENA a mandate to change the course of Mexico's domestic policies. Nevertheless, López Obrador's legislative coalition may face opposition if it seeks to enact policies that would shift the balance of power between federal and state offices. López Obrador proposed having a federal representative in each state to liaise with his office and to oversee distribution of all federal funds, but governors opposed this proposal. As shown in Figure 3 , MORENA and allied parties control four of 32 governorships, including that of Mexico City. In 2018, López Obrador promised to bring about change by governing differently than recent PRI and PAN administrations. He focused on addressing voters' concerns about corruption, poverty and inequality, and escalating crime and violence.Although some of his advisers endorse progressive social policies, López Obrador personally has opposed abortion and gay marriage. López Obrador has set high expectations for his government and promised many things to many different constituencies, some of which appear to conflict with each other. Upon taking office, López Obrador pledged to bring about a "fourth transformation" that would make Mexico a more just and peaceful society, but observers question whether his ambitious goals are attainable, given existing fiscal constraints. As an example, he has promised to govern austerely but has started a number of new social programs. His finance minister has promised that existing contracts with private energy companies will be respected, but his energy minister has halted new auctions and is seeking to rebuild the heavily indebted state oil company ( Petróleos de México or Pemex). President López Obrador's distinct brand of politics has given him broad support. López Obrador has dominated the news cycle by convening daily, early morning press conferences. His decision to cut his own salary and public sector salaries generally have prompted high-level resignations among senior bureaucrats, but proven popular with the public. His government has started a new youth scholarship program and pensions for the elderly, while also promising to create jobs with infrastructure investments (including a new oil refinery and a railroad in the Yucatán) in southern Mexico regardless of their feasibility. Voters have given the government the benefit of the doubt even when its policies have caused inconveniences, such as fuel shortages that occurred after security forces closed some oil pipelines in an effort to combat theft. Investors have been critical of some of the administration's early actions. Many expressed concern after López Obrador cancelled a $13 billion airport project already underway after voters in a MORENA-led referendum rejected its location. Investors were somewhat assuaged, however, after the administration unveiled a relatively austere budget in late 2018 and then decided to allow energy contracts signed during Peña Nieto's presidency to proceed while halting new ones. With López Obrador's support, the Congress has enacted reforms to strengthen the protection of labor rights and workers' salaries, in part to comply with its domestic commitments related to the USMCA. On the other hand, it is unclear whether legislators' revisions will water down, or completely undo, education reforms passed in 2013 that were deemed a step forward toward raising education standards by many, but have been opposed by unions and ordered repealed by López Obrador. Critics maintain that President López Obrador has shunned reputable media outlets that have questioned his policies and cut funding for entities that could provide checks on his presidential power. He has dismissed data collected on organized crime-related violence by media outlets as "fake news" even as government data corroborate their findings that violence is escalating. His government has cut the budget for the national anticorruption commission, newly independent prosecutor general's office, and several regulatory agencies. Endemic violence, much of which is related to organized crime, has become an intractable problem in Mexico (see Figure 4 ). Organized crime-related violence has been fueled by U.S. drug demand, as well as bulk cash smuggling and weapons smuggling from the United States. Organized crime-related homicides in Mexico rose slightly in 2015 and significantly in 2016. In 2017, total homicides and organized crime-related homicides reached record levels. During Mexico's 2018 campaign, more than 150 politicians reportedly were killed. The homicide rate reached record levels in 2018 and rose even higher during the first three months of 2019 as fighting among criminal organizations intensified. Infighting among criminal groups has intensified since the rise of the Jalisco New Generation, or CJNG, cartel, a group that shot down a police helicopter in 2016. The January 2017 extradition of Joaquín "El Chapo" Guzmán prompted succession battles within the Sinaloa Cartel and emboldened the CJNG and other groups to challenge Sinaloa's dominance. Crime groups are competing to supply surging U.S. demand for heroin and other opioids. Mexico's criminal organizations also are fragmenting and diversifying away from drug trafficking, furthering their expansion into activities such as oil theft, alien smuggling, kidnapping, and human trafficking. Although much of the crime—particularly extortion—disproportionately affects localities and small businesses, fuel theft has become a national security threat, costing Mexico as much as $1 billion a year and fueling violent conflicts between the army and suspected thieves. Many assert that the Peña Nieto administration maintained Calderón's reactive approach of deploying federal forces—including the military—to areas in which crime surges rather than proactively strengthening institutions to deter criminality. These deployments led to a swift increase in human rights abuses committed by security forces (military and police) against civilians (see " Human Rights " below). High-value targeting of top criminal leaders also continued. As of August 2018, security forces had killed or detained at least 110 of 122 high-value targets identified as priorities by the Peña Nieto government; nine of those individuals received sentences. In August 2018, the Mexican government and the U.S. Drug Enforcement Administration (DEA) announced a new bilateral effort to arrest the leader of the CJNG. Even as many groups have developed into multifaceted illicit enterprises, government efforts to seize criminal assets have been modest and attempts to prosecute money laundering cases have had "significant shortcomings." With violence reaching historic levels during the first quarter of 2019 and high-profile massacres occurring, President López Obrador is under increasing pressure to refine his security strategy. As a candidate, López Obrador emphasized anticorruption initiatives, social investments, human rights, drug policy reform, and transitional justice for nonviolent criminals. In line with those priorities, Mexico's security strategy for 2018-2024 includes a focus on addressing the socioeconomic drivers of violent crime. The administration has launched a program to provide scholarships to youth to attend university or to complete internships. Allies in the Mexican Congress are moving toward decriminalizing marijuana production and distribution. At the same time, President López Obrador has backed constitutional reforms to allow military involvement in public security to continue for five more years, despite a 2018 Supreme Court ruling that prolonged military involvement in public security violated the constitution. He secured congressional approval of a new 80,000-strong National Guard (composed of military police, federal police, and new recruits) to combat crime, a move that surprised many in the human rights community. After criticism from human rights groups, the Congress modified López Obrador's original proposal to ensure the National Guard will be under civilian command. Corruption is an issue at all levels of government in Mexico: 84% of Mexicans identify corruption as among the most pressing challenge facing the country. In Mexico, the costs of corruption reportedly reach as much as 5% of gross domestic product each year. Mexico fell 33 places in Transparency International's Corruption Perceptions Index from 2012 to 2018. At least 14 current or former governors (many from the PRI) are under investigation for corruption, including collusion with organized crime groups that resulted in violent deaths. A credible case against the chair of Peña Nieto's 2012 campaign (and former head of Pemex) for receiving $10.5 million in bribes from Odebrecht, a Brazilian construction firm, stalled after the prosecutor investigating the case was fired. Even though López Obrador has called for progress and transparency in anticorruption cases, his government has not unsealed information on investigations related to the Odebrecht case. New Criminal Justice System. By the mid-2000s, most Mexican legal experts had concluded that reforming Mexico's corrupt and inefficient criminal justice system was crucial for combating criminality and strengthening the rule of law. In June 2008, Mexico implemented constitutional reforms mandating that by 2016, trial procedures at the federal and state level had to move from a closed-door process based on written arguments presented to a judge to an adversarial public trial system with oral arguments and the presumption of innocence. These changes aimed to help make a new criminal justice system that would be more transparent, impartial, and efficient (through the use of alternative means of dispute settlement). Federal changes followed advances made in early adopters of the new system, including states such as Chihuahua. Under Peña Nieto, Mexico technically met the June 2016 deadline for adopting the new system, with states that have received technical assistance from the United States showing, on average, better results than others. Nevertheless, s problems in implementation occurred and public opinion turned against the system as many criminals were released by judges due to flawed investigations by police and/or weak cases presented by prosecutors. On average, fewer than 20% of homicides have been successfully prosecuted, suggesting persistently high levels of impunity. According to the World Justice Project, the new system has produced better courtroom infrastructure, more capable judges, and faster case resolution than the old system, but additional training for police and prosecutors is needed. It is unclear whether López Obrador will dedicate the resources necessary to strengthen the system. Reforming the Attorney General's Office. Analysts who study Mexico's legal system highlight the inefficiency of the attorney general's office (PGR). For years, the PGR's efficiency has suffered because of limited resources, corruption, and a lack of political will to resolve high-profile cases, including those involving high-level corruption or emblematic human rights abuses. Three attorneys general resigned from 2012 to 2017; the last one stepped down over allegations of corruption. Many civil society groups that pushed for the new criminal justice system in the mid-2000s also lobbied the Mexican Congress to create an independent prosecutor's office to replace the PGR. Under constitutional reforms adopted in 2014, Mexico's Senate would appoint an independent individual to lead the new prosecutor general's office. President Andrés Manuel López Obrador downplayed the importance of the new office during his presidential campaign, but Mexico's Congress established the office after he was inaugurated in December 2018. In January 2019, Mexico's Senate named Dr. Alejandro Gertz Manero, a 79-year old associate and former security advisor to López Obrador, as Prosecutor General. Gertz Manero's nomination and subsequent appointment has raised concerns about his capacity to remain independent, given his ties to the president. Many wonder if he will take up cases against the president and his administration. Gertz Manero is to serve a nine-year term. Making Electoral Fraud and Corruption Grave Crimes. In December 2018, López Obrador proposed constitutional changes that would expand the list of grave crimes for which judges must mandate pretrial detention to include corruption and electoral fraud. The proposal passed the Senate in December and the lower chamber in February 2019. Critics, such as the UN High Commissioner for Human Rights (OHCHR), noted that the change violates the presumption of innocence, an international human right under the UN's Universal Declaration of Human Rights. Increasing pretrial detention also goes against one of the stated goals of the NCJS. The president, however, welcomed the outcome. National Anticorruption System. In July 2016, Mexico's Congress approved legislation to fully implement the national anticorruption system (NAS) created by a constitutional reform in April 2015. The legislation reflected several of the proposals put forth by Mexican civil society groups. It gave the NAS investigative and prosecutorial powers and a civilian board of directors; increased administrative and criminal penalties for corruption; and required three declarations (taxes, assets, and conflicts of interest) from public officials and contractors. During the Peña Nieto government, federal implementation of the NAS lagged and state-level implementation varied significantly. In December 2017, members of the system's civilian board of directors maintained that the government had thwarted its efforts by denying requests for information. Although he campaigned on an anticorruption platform, President López Obrador has questioned the necessity of the NAS. Since taking office, López Obrador has not prioritized implementing the system. Nevertheless, Prosecutor General Gertz Manero named a special anticorruption prosecutor in February 2019. The 18 judges required to hear corruption cases are still to be named. In addition, many states have not fulfilled the constitutional requirements for establishing a local NAS. Criminal groups, sometimes in collusion with public officials, as well as state actors (military, police, prosecutors, and migration officials), have continued to commit serious human rights violations against civilians, including extrajudicial killings. The vast majority of those abuses have gone unpunished, whether prosecuted in the military or civilian justice systems. The government also continues to receive criticism for not adequately protecting journalists and human rights defenders, migrants, and other vulnerable groups. For years, human rights groups and U.S. State Department Country Reports on Human Rights Practices have chronicled cases of Mexican security officials' involvement in extrajudicial killings, "enforced disappearances," and torture. In October 2018, the outgoing Peña Nieto government estimated that more than 37,000 people who had gone missing since 2006 remained unaccounted for. States on the U.S.-Mexico border (Tamaulipas, Nuevo León, and Sonora) have among the highest rates of disappearances. The National Human Rights Commission estimates that "more than 3,900 bodies have been found in over 1,300 clandestine graves since 2007." In 2017, the Mexican Congress enacted a law against torture. After an April 2019 visit to Mexico, the U.N. Committee against Torture welcomed the passage of the 2017 law, but stated that torture by state agents occurred in a " generalized manner " in Mexico and found the use of torture to be "endemic" in detention centers. They also maintained that impunity for the crime of torture must be addressed: 4.6% of investigations into torture claims resulted in convictions. During a recent visit to Mexico, Michelle Bachelet, the United Nations High Commissioner for Human Rights recognized President López Obrador's efforts to put human rights at the center of his government. Bachelet highlighted the President's willingness to "unveil the truth, provide justice, give reparations to victims and guarantee the nonrepetition" of human rights violations. She commended the creation of the Presidential Commission for Truth and Access to Justice for the Ayotzinapa case and acknowledged the government's broader commitment to search for the disappeared. The commissioner welcomed the government's presentation of the Plan for the Implementation of the General Law on Disappearances (approved in 2017), the reestablishment of the National Search System, and the announcement of plans to create a Single Information System and a National Institute for Forensic Identification. In recent years, international observers have expressed alarm as Mexico has become one of the most dangerous countries for journalists to work outside of a war zone. From 2000 to 2018, some 120 journalists and media workers were killed in Mexico and many more have been threatened or attacked, according to Article 19 (an international media rights organization). A more conservative estimate from the Committee to Protect Journalists (CPJ) is that 41 journalists have been killed in Mexico since 2000. In addition, Mexico ranks among the top 10 countries globally with the highest rates of unsolved journalist murders as a percentage of population in CPJ's Global Impunity Index . Mexico is also a dangerous country for human rights defenders. During the first three months of the López Obrador government, at least 17 journalists and human rights defenders were killed, at least one of whom was receiving government protection. Although López Obrador has been critical of some media outlets and reporters, his government has pledged to improve the mechanism intended to protect human rights defenders and journalists. President Peña Nieto prioritized promoting trade and investment in Mexico as a core goal of his administration's foreign policy. During his term, Mexico began to participate in U.N. peacekeeping efforts and spoke out in the Organization of American States on the deterioration of democracy in Venezuela, a departure for a country with a history of nonintervention. Peña Nieto hosted Chinese Premier Xi Jinping for a state visit to Mexico, visited China twice, and in September 2017 described the relationship as a "comprehensive strategic partnership." The Peña Nieto government negotiated and signed the proposed Trans-Pacific Partnership (TPP) trade agreement with other Asia-Pacific countries (and the United States and Canada). Even after President Trump withdrew the United States from the TPP agreement, Mexico and the 10 other signatories of the TPP concluded their own trade agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Mexico also prioritized economic integration efforts with the pro-trade Pacific Alliance countries of Chile, Colombia, and Peru and focused on expanding markets for those governments. In contrast to his predecessor, President López Obrador generally has maintained that the best foreign policy is a strong domestic policy. His foreign minister, Marcelo Ebrard (former mayor of Mexico City), is leading a return to Mexico's traditional, noninterventionist approach to foreign policy (the so-called Estrada doctrine ). Many analysts predict, however, that Mexico may continue to engage on global issues that it deems important. López Obrador reversed the active role that Mexico had been playing during the Peña Nieto government in seeking to address the crises in Venezuela. Mexico has not recognized Juan Guaidó as Interim President of Venezuela despite pressure from the United States and others to do so. As of January 2019, U.N. agencies estimated that some 39,000 Venezuelan migrants and refugees were sheltering in Mexico. Despite these changes, Mexico continues to participate in the Pacific Alliance, promote its exports and seek new trade partners, and support investment in the Northern Triangle countries (Guatemala, El Salvador, and Honduras). The Mexican government has long maintained that the best way to stop illegal immigration from Central America is to address the insecurity and lack of opportunity there. Nevertheless, fiscal limitations limit the Mexican government's ability to support Central American efforts to address those challenges. Mexico has transitioned from a closed, state-led economy to an open market economy that has entered into free trade agreements with 46 countries. The transition began in the late 1980s and accelerated after Mexico entered into NAFTA in 1994. Since NAFTA, Mexico has increasingly become an export-oriented economy, with the value of exports equaling more than 38% of Mexico's gross domestic product (GDP) in 2016, up from 10% of GDP 20 years prior. Mexico remains a U.S. crude oil supplier, but its top exports to the United States are automobiles and auto parts, computer equipment, and other manufactured goods. Reports have estimated that 40% of the content of those exports contain U.S. value added content. Despite attempts to diversify its economic ties and build its domestic economy, Mexico remains heavily dependent on the United States as an export market (roughly 80% of Mexico's exports in 2018 were U.S.-bound) and as a source of remittances, tourism revenues, and investment. Studies estimate that a U.S. withdrawal from NAFTA, could cost Mexico more than 950,000 low-skilled jobs and lower its GDP growth by 0.9%. In recent years, remittances have replaced oil exports as Mexico's largest source of foreign exchange. According to Mexico's central bank, remittances reached a record $33.0 billion in 2018. Mexico remained the leading U.S. international travel destination in 2017 (the most recent year calculated by the U.S. Department of Commerce). U.S. travel warnings regarding violence in resort areas such as Playa del Carmen, Los Cabos, and Cancún could result in declining arrivals. The Mexican economy grew by 2% in 2018, but growth may decline to 1.6% in 2019, due, in part, to lower projected private investment. Mexico's Central Bank has also cited slowing investment, gasoline shortages, and strikes as reasons for revising its growth forecast for 2019 downward to a range of 1.1% to 2.1% for 2019. Some observers believe that investor sentiment and the country's growth prospects could worsen if López Obrador continues to promote government intervention in the economy and to rely on popular referendums to make economic decisions. Economic conditions in Mexico tend to follow economic patterns in the United States. When the U.S. economy is expanding, as it is now, the Mexican economy tends to grow. However, when the U.S. economy stagnates or contracts, the Mexican economy also tends to contract, often to a greater degree. The negative impact of protectionist U.S. trade policies and a projected U.S. economic slowdown in 2020 could hurt Mexico's growth prospects. President Trump has threatened to close the U.S.-Mexico border in response to his concerns about illegal immigration and illicit drug flows. Closing the border could have immediate and serious economic consequences. As an example, the U.S. auto industry stated that U.S. auto production would stop after a week due to the deep interdependence of the North American auto industry. Sound macroeconomic policies, a strong banking system, and structural reforms backed by a flexible line of credit with the International Monetary Fund (IMF) have helped Mexico weather recent economic volatility. Nevertheless, the IMF has recommended additional steps to deal with potential external shocks. These steps include improving tax collection, reducing informality, reforming public administration, and improving governance. Over the past 30 years, Mexico has recorded a somewhat low average economic growth rate of 2.6%. Some factors—such as plentiful natural resources, a young labor force, and proximity to markets in the United States—have been counted on to help Mexico's economy grow faster in the future. Most economists maintain that those factors could be bolstered over the medium to long term by continued implementation of some of the reforms described in Table A-1 . At the same time, continued insecurity and corruption, a relatively weak regulatory framework, and challenges in its education system may hinder Mexico's future industrial competitiveness. Corruption costs Mexico as much as $53 billion a year (5% of GDP). A lack of transparency in government spending and procurement, as well as confusing regulations and red tape, has likely discouraged some investment. Deficiencies in the education system, including a lack of access to vocational education, have led to firms having difficulty finding skilled labor. Another factor affecting the economy is the price of oil. Because oil revenues make up a large, if lessening, part of the country's budget (32% of government revenue in 2017), low oil prices since 2014 and a financial crisis within Pemex have proved challenging. The Peña Nieto government raised other taxes to recoup lost revenue from oil, but the López Obrador administration has pledged to make budget cuts in order to maintain fiscal targets. Many analysts predict that Mexico will have to combine efforts to implement its economic reforms with other actions to boost growth. A 2018 report by the Organisation for Economic Co-operation and Development suggests that Mexico will need to enact complementary reforms to address issues such as corruption, weak governance, and lack of judicial enforcement to achieve its full economic growth potential. Mexico has long had relatively high poverty rates for its level of economic development (43.6% in 2016), particularly in rural regions in southern Mexico and among indigenous populations. Some assert that conditions in indigenous communities have not measurably improved since the Zapatistas launched an uprising for indigenous rights in 1994. Traditionally, those employed in subsistence agriculture or small, informal businesses tend to be among the poorest citizens. Many households rely on remittances to pay for food, clothing, health care, and other basic necessities. Mexico also experiences relatively high income inequality. According to the 2014 Global Wealth Report published by Credit Suisse, 64% of Mexico's wealth is concentrated in 10% of the population. Mexico is among the 25 most unequal countries in the world included in the Standardized World Income Inequality Database. According to a 2015 report by Oxfam Mexico, this inequality is due in part to the country's regressive tax system, oligopolies that dominate particular industries, a relatively low minimum wage, and a lack of targeting in some social programs. Economists have maintained that reducing informality is crucial for addressing income inequality and poverty, while also expanding Mexico's low tax base. The 2013-2014 reforms sought to boost formal-sector employment and productivity, particularly among the small- and medium-sized enterprises (SMEs) that employ some 60% of Mexican workers, mostly in the informal sector. Although productivity in Mexico's large companies (many of which produce internationally traded goods) increased by 5.8% per year between 1999 and 2009, productivity in small businesses fell by 6.5% per year over the same period. To address that discrepancy, the financial reform aimed to increase access to credit for SMEs and the fiscal reform sought to incentivize SMEs' participation in the formal (tax-paying) economy by offering insurance, retirement savings accounts, and home loans to those that register with the national tax agency. The Peña Nieto administration sought to complement economic reforms with social programs, but corruption within the Secretariat for Social Development likely siphoned significant funding away from some of those programs. It expanded access to federal pensions, started a national anti-hunger program, and increased funding for the country's conditional cash transfer program. Peña Nieto renamed that program Prospera (Prosperity) and redesigned it to encourage its beneficiaries to engage in productive projects. In addition to corruption, some of Peña Nieto's programs, namely the anti-hunger initiative, were criticized for a lack of efficacy. Despite his avowed commitment to austerity, López Obrador has endorsed state-led economic development and promised to rebuild Mexico's domestic market as part of his National Development Plan 2018-2024, which he presented on May 1, 2019. In addition to revitalizing Pemex, the president has promised to build a "Maya Train" to connect five states in the southeast and facilitate tourism (see Figure 5 ). In December 2018, López Obrador announced a plan to invest some $25 billion in southern Mexico to accompany an estimated $4.8 billion in potential U.S. public and private investments to promote job growth, infrastructure, and development in that region, including jobs for Central American migrants. López Obrador's pledges related to social programs include (1) doubling monthly payments to the elderly; (2) providing regular financial assistance to a million disabled people; (3) giving a monthly payment to students in 10 th to 12 th grades to lower the dropout rate, and (4) offering paid apprenticeships for 2.3 million young people. While some of these programs have already gotten underway, their ultimate scale and impacts will take time to evaluate. Some observers are concerned about his plan to decouple monthly support to families provided through the program formerly known as Prospera with requirements that children attend school and receive regular health checkup. Mexican-U.S. relations generally have grown closer over the past two decades. Common interests in encouraging trade flows and energy production, combating illicit flows (of people, weapons, drugs, and currency), and managing environmental resources have been cultivated over many years. A range of bilateral talks, mechanisms, and institutions have helped the Mexican and U.S. federal governments—as well as stakeholders in border states, the private sector, and nongovernmental organizations—find common ground on difficult issues, such as migration and water management. U.S. policy changes that run counter to Mexican interests in one of those areas could trigger responses from the Mexican government on other areas where the United States benefits from Mexico's cooperation, such as combating illegal migration. Despite predictions to the contrary, U.S.-Mexico relations under the López Obrador administration have thus far remained friendly. Nevertheless, tensions have emerged over several key issues, including trade disputes and tariffs, immigration and border security issues, and Mexico's decision to remain neutral in the crisis in Venezuela. The new government has generally accommodated U.S. migration and border security policies, but has protested recent policies that have resulted in extended border delays. President López Obrador has also urged the U.S. Congress to consider the USMCA. Security Cooperation: Transnational Crime and Counternarcotics Mexico is a significant source and transit country for heroin, marijuana, and synthetic drugs (such as methamphetamine) destined for the United States. It is also a major transit country for cocaine produced in the Andean region. Mexican-sourced heroin now accounts for nearly 90% of the total weight of U.S.-seized heroin analyzed in the U.S. Drug Enforcement Administration's (DEA's) Heroin Signature Program. In addition to Mexico serving as a transshipment point for Chinese fentanyl (a powerful synthetic opioid), the DEA suspects labs in Mexico may use precursor chemicals smuggled over the border from the United States to produce fentanyl. Mexican drug trafficking organizations pose the greatest crime threat to the United States, according to the DEA's 2018 National Drug Threat Assessment . These organizations engage in drug trafficking, money laundering, and other violent crimes. They traffic heroin, methamphetamine, cocaine, marijuana, and, increasingly, the powerful synthetic opioid fentanyl. Mexico is a long-time recipient of U.S. counterdrug assistance, but cooperation was limited between the mid-1980s and mid-2000s due to U.S. distrust of Mexican officials and Mexican sensitivity about U.S. involvement in the country's internal affairs. Close cooperation resumed in 2007, when Mexican President Felipe Calderón requested U.S. assistance to combat drug trafficking organizations, and worked with President George W. Bush to develop the Mérida Initiative. While initial U.S. funding for the initiative focused heavily on training and equipping Mexican security forces, U.S. assistance shifted over time to place more emphasis on strengthening Mexican institutions. In 2011, the U.S. and Mexican governments agreed to a revised four-pillar strategy that prioritized (1) combating transnational criminal organizations through intelligence sharing and law enforcement operations; (2) institutionalizing the rule of law while protecting human rights through justice sector reform and forensic assistance; (3) creating a "21 st century border" while improving immigration enforcement in Mexico; and (4) building strong and resilient communities with pilot programs to address the root causes of violence and reduce drug demand. The Mérida Initiative has continued to evolve along with U.S. and Mexican security concerns. Recent programs have focused on combating opioid production and distribution, improving border controls and interdiction, training forensic experts, and combating money laundering. Nevertheless, organized crime-related homicides in Mexico and opioid-related deaths in the United States have surged, leading some critics to question the efficacy of bilateral efforts. The future of the Mérida Initiative is unclear. Some observers predict López Obrador may seek to emphasize anticorruption initiatives, social investments in at-risk youth, human rights, and drug policy reform as he did during his presidential campaign. Others maintain that López Obrador has thus far accommodated the Trump Administration's emphasis on combating Central American migration and may back other U.S. priorities, such as combating the fentanyl trade. Other common interests may include countering human rights violations, combating weapons trafficking, and accelerating efforts against money laundering and corruption. There has been bipartisan support in Congress for the Mérida Initiative, which has accounted for the majority of U.S. foreign assistance to Mexico provided over the past decade (see Table 1 ). The FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) provided some $145 million for accounts that fund the initiative ($68 million above the budget request). The increased resources are primarily for addressing the flow of U.S.-bound opioids. The joint explanatory statement accompanying the act ( H.Rept. 116-9 ) requires a State Department strategy on international efforts to combat opioids (including efforts in Mexico) and a report on how the Mérida Initiative is combating cocaine and methamphetamine flows. The Administration's FY2020 budget request asks Congress to provide $76.3 million for the Mérida Initiative. In contrast to Plan Colombia, the Department of Defense (DOD) did not play a primary role in designing the Mérida Initiative and is not providing assistance through Mérida accounts. However, DOD oversaw the procurement and delivery of equipment provided through the FMF account. Despite DOD's limited role in the Mérida Initiative, bilateral military cooperation has been increasing. DOD assistance aims to support Mexico's efforts to improve security in high-crime areas, track and capture suspects, strengthen border security, and disrupt illicit flows. A variety of funding streams support DOD training and equipment programs. Some DOD equipment programs are funded by annual State Department appropriations for FMF, which totaled $5.0 million in FY2018. International Military Education and Training (IMET) funds, which totaled $1.5 million in FY2018, support training programs for the Mexican military, including courses in the United States. Apart from State Department funding, DOD provides additional training, equipping, and other support to Mexico that complements the Mérida Initiative through its own accounts. Individuals and units receiving DOD support are vetted for potential human rights issues in compliance with the Leahy Law. DOD programs in Mexico are overseen by U.S. Northern Command, which is located at Peterson Air Force Base in Colorado. DOD counternarcotics support to Mexico totaled approximately $63.3 million in FY2018. Policymakers may want to receive periodic briefings on DOD efforts to guarantee that DOD programs are being adequately coordinated with Mérida Initiative efforts, complying with U.S. vetting requirements, and not reinforcing the militarization of public security in Mexico. During the Calderón government, extraditions were another indicator that the State Department used as an example of the Mérida Initiative's success. During the final years of the Calderón government, Mexico extradited an average of 98 people per year to the United States, an increase over the prior administration. When President Peña Nieto took office, extraditions fell to 54 in 2013 but rose to a high of 76 in 2016 (see Figure 6 ). The U.S. Congress has expressed ongoing concerns about human rights conditions in Mexico. Congress has continued to monitor adherence to the Leahy vetting requirements that must be met under the Foreign Assistance Act (FAA) of 1961, as amended (22 U.S.C. 2378d), which pertains to State Department aid, and 10 U.S.C. 2249e, which guides DOD funding. DOD reportedly suspended assistance to a brigade based in Tlatlaya, Mexico, due to concerns about the brigade's potential involvement in the extrajudicial killings previously described. From FY2008 to FY2015, Congress made conditional 15% of U.S. assistance to the Mexican military and police until the State Department sent a report to appropriators verifying that Mexico was taking steps to comply with certain human rights standards. In FY2014, Mexico lost $5.5 million in funding due to human rights concerns. For FY2016-FY2019, human rights reporting requirements applied to FMF rather than to Mérida Initiative accounts. U.S. assistance to Mexico has supported the Mexican government's efforts to reform its judicial system and to improve human rights conditions in the country. Congress has provided funding to support Mexico's transition from an inquisitorial justice system to an oral, adversarial, and accusatory system that aims to strengthen human rights protections for victims and the accused. The State Department has established a high-level human rights dialogue with Mexico. The U.S. Agency for International Development (USAID) supported Mexico's 2014-2018 human rights plan, including the development of legislation in compliance with international standards, prevention efforts, improved state responses to abuses, and expanded assistance to victims. One recent project addressed the way the Mexican government addresses cases of torture and enforced disappearances, another sought to help the government protect journalists and resolve crimes committed against them. In many of these areas, U.S. technical assistance to the government is complemented by support to think tanks and civil society organizations, including in the area of providing forensic assistance to help search for missing people. Congress may choose to augment Mérida Initiative funding for human rights programs, such as ongoing training programs for military and police, or to fund new efforts to support human rights organizations. Human rights conditions in Mexico, as well as compliance with conditions included in the FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) are likely to be closely monitored. Some Members of Congress have written letters to U.S. and Mexican officials regarding human rights concerns, including allegations of extrajudicial killings by security forces, abuses of Central American migrants, and the use of spyware against human rights activists. U.S. policymakers may question how the López Obrador administration moves to punish past human rights abusers, how it intends to prevent new abuses from occurring, and how the police and judicial reforms being implemented are bolstering human rights protections. The United States and Mexico have a strong economic and trade relationship that has been bolstered through NAFTA. Since 1994, NAFTA has removed virtually all tariff and nontariff trade and investment barriers among partner countries and provided a rules-based mechanism to govern North American trade. Most economic studies show that the net economic effect of NAFTA on the United States and Mexico has been relatively small but positive, though there have been adjustment costs to some sectors in both countries. Further complicating assessments of NAFTA, not all trade-related job gains and losses since NAFTA entered into force can be entirely attributed to the agreement. Numerous other factors have affected trade trends, such as Mexico's trade-liberalization efforts, economic conditions, and currency fluctuations. Mexico is the United States' third-largest trading partner. Mexico ranks third as a source of U.S. merchandise imports and second as an export market for U.S. goods. The United States is Mexico's most important export market for goods, with 80% of Mexican exports destined for the United States. Merchandise trade between the two countries in 2018 was six times higher (in nominal terms) than in 1993, the year NAFTA entered into force. The merchandise trade balance went from a U.S. surplus of $1.7 billion in 1993 (the year before NAFTA entered into force) to a widening deficit that reached $81.5 billion in 2018. In services, the United States had a trade surplus with Mexico of $7.4 billion in 2017 (latest available data); it largely consists of travel, transportation, business, and financial services. Total trade (exports plus imports) amounted to $561.3 billion in 2018. Much of that bilateral trade occurs in the context of supply chains, as manufacturers in each country work together to create goods. The expansion of trade has resulted in the creation of vertical supply relationships, especially along the U.S.-Mexican border. The flow of intermediate inputs produced in the United States and exported to Mexico and the return flow of finished products increased the importance of the U.S.-Mexican border region as a production site. Foreign direct investment (FDI) is also an integral part of the bilateral economic relationship. The stock of U.S. FDI in Mexico increased from $15.2 billion in 1993 to $109.7 billion in 2017. Although the stock of Mexican FDI in the United States is much lower, it has also increased significantly since NAFTA, from $1.2 billion in 1993 to $18.0 billion in 2017. The Obama Administration worked with Mexico to balance border security with facilitating legitimate trade and travel, promote economic competitiveness, and pursue energy integration. The U.S.-Mexican High-Level Economic Dialogue, launched in 2013, was a bilateral initiative to advance economic and commercial priorities through annual Cabinet meetings. The High-Level Regulatory Cooperation Council launched in 2012 helped align regulatory principles. Trilateral (with Canada) cooperation occurred under the aegis of the North American Leadership Summits. While those mechanisms have not continued under the Trump Administration, the bilateral Executive Steering Committee (ESC), which guides broad efforts along the border, and the Bridges and Border Crossings group on infrastructure have continued to meet. The U.S.-Mexico CEO Dialogue has also continued to convene biannual meetings to produce joint recommendations for the two governments. Mexican business leaders reportedly worked with U.S. executives, legislators, and governors to encourage the Trump Administration to back the proposed USMCA rather than just abandoning NAFTA. Despite positive advances on many aspects of bilateral and trilateral economic relations, trade disputes continue. The United States and Mexico have had a number of trade disputes over the years, many of which have been resolved. Some of them have involved: country-of-origin labeling, dolphin-safe tuna labeling, and NAFTA trucking provisions. In 2017, Mexico and the United States concluded a suspension agreement on a U.S. antidumping and countervailing duty investigation on Mexican sugar exports to the United States in which Mexico agreed to certain limitations on its access to the U.S. sugar market. In recent years, new trade disputes have emerged. In January 2018, President Trump announced new tariffs on imported solar panels and washing machines under the Trade Act of 1974 that included products coming from Mexico. In February 2019, U.S. Commerce Secretary Wilbur Ross announced that the United States intends to withdraw from a 2013 suspension agreement on fresh tomato exports from Mexico. The agreement effectively suspends an investigation by the U.S. International Trade Commission (USITC) into whether Mexican producers are dumping fresh tomatoes into the U.S. market. Mexico's ambassador to the United States has stated she is "cautiously optimistic" the United States and Mexico will agree to a new arrangement before a U.S. withdrawal. The United States and Mexico are in another trade dispute over U.S. actions to impose tariffs on imports of steel and aluminum under Section 232 of the Trade Expansion Act of 1962, which authorizes the President to impose restrictions on certain imports based on national security threats. Using these authorities, on May 31, 2018, the United States imposed a 25% duty on steel imports and a 10% duty on aluminum imports from Mexico and Canada. In response, Mexico applied retaliatory tariffs of 5% to 25% on U.S. exports valued at approximately $3.6 billion on pork, apples, potatoes, and cheese, among other items. On May 23, 2018, the Trump Administration initiated a Section 232 investigation into the imports of motor vehicles and automotive parts (83 FR 24735) to determine if those imports threaten to impair U.S. national security. On November 30, 2018, the United States, Canada, and Mexico signed the proposed USMCA, which, if approved by Congress and ratified by Mexico and Canada, would replace NAFTA. The proposed USMCA would retain many of NAFTA's chapters, while making notable changes to others, including market access provisions for autos and agriculture products, and new rules on investment, government procurement, and intellectual property rights (IPR). It would add new chapters on digital trade, state-owned enterprises, and currency misalignment. The USMCA would tighten rule of origin requirements for duty-free treatment of U.S. motor vehicle imports from Mexico. Under NAFTA, motor vehicles must contain 62.5% North American content, while all other vehicles and motor parts must contain 60% North American content to qualify for duty-free treatment. The new rules would require that 75% of a motor vehicle and 70% of its steel and aluminum originate in North America and that 40%-45% of auto content be made by workers earning at least $16 per hour. Side letters would exempt up to 2.6 million vehicles from Canada and Mexico annually from potential Section 232 auto tariffs. USMCA would maintain the NAFTA state-to-state mechanism for resolving most disputes, as well as NAFTA's binational mechanism for reviewing and settling trade remedy disputes. However, it would maintain an investor-state dispute settlement (ISDS) process only between the United States and Mexico, without Canada, but limit its scope to government contracts in oil, natural gas, power generation, infrastructure, and telecommunications sectors. It would also maintain U.S.-Mexico ISDS in other sectors provided the claimant exhausts national remedies first, among other changes and new limitations. Policymakers may consider numerous issues related to U.S.-Mexico trade as they debate the proposed USMCA. Some issues could include the timetable for congressional consideration under Trade Promotion Authority (TPA), whether the proposed USMCA meets TPA's negotiating objectives and other requirements, and the impact of the agreement on U.S.-Mexico trade relations. In April 2019, the USITC completed a required study on the possible economic impact of a USMCA on the United States. The report estimates that the agreement would have a very small but positive impact on the U.S. economy, potentially raising U.S. real GDP by "0.35% and U.S. employment by 176,000 jobs (0.12 %)." Other policymakers contend that the United States lift steel and aluminum tariffs on imports from Canada and Mexico before the agreement is considered by Congress and state that the tariffs act as a barrier hindering Mexican and Canadian ratification of the proposed USMCA. Congressional objectives and concerns are likely to shape timing of congressional consideration of the proposed USMCA. Some policymakers view the agreement as vital for U.S. firms, workers, and farmers, and believe that the updated agreement would benefit U.S. economic interests. Other issues of concern include a lack of worker rights protection in Mexico and the enforceability of labor provisions, the scaling back of ISDS provisions, which could affect U.S. investors, and possible adverse effects of auto rules of origin on U.S. automakers. Although USMCA would revise NAFTA labor provisions and provide the same dispute mechanism as other parts of the agreement, some critics contend that USMCA has the same limitations as NAFTA; they allege that the proposed USMCA enforcement tools do not go far enough to ensure the protection of worker rights to organize and bargain collectively. It is unclear whether labor reforms that have passed the Mexican Congress will be enough to assuage those concerns. Immigration policy has been a subject of congressional concern over many decades, with much of the debate focused on how to prevent unauthorized migration and address the large population of unauthorized migrants living in the United States. Mexico's status as both the largest source of migrants in the United States and a continental neighbor means that U.S. migration policies—including stepped-up border and interior enforcement—have primarily affected Mexicans. Beginning in FY2012, foreign nationals from countries other than Mexico began to comprise a growing percentage of total apprehensions. Due to a number of factors, more Mexicans have been leaving the United States than arriving. Nevertheless, protecting the rights of Mexicans living in the United States, including those who are unauthorized, remains a top Mexican government priority. Since the mid-2000s, successive Mexican governments have supported efforts to enact immigration reform in the United States, while being careful not to appear to be infringing upon U.S. authority to make and enforce immigration laws. Mexico has made efforts to combat transmigration by unauthorized migrants and worked with U.S. law enforcement to combat alien smuggling and human trafficking. In FY2018, the Trump Administration removed (deported) some 141,045 Mexicans, as compared to 128,765 removals in FY2017. During the Obama Administration, some of Mexico's past concerns about U.S. removal policies, including nighttime deportations and issues concerning the use of force by some U.S. Border Patrol officials, were addressed through bilateral migration talks and letters of agreement. President Trump's shifts in U.S. immigration policies have tested U.S.-Mexican relations. His repeated assertions that Mexico will pay for a border wall resulted in President Peña Nieto canceling a White House meeting in January 2017 and continued to strain relations throughout his term. The Mexican government expressed regret after the Administration's decision to rescind the Deferred Action for Childhood Arrivals (DACA) initiative, which has provided work authorization and relief from removal for migrants brought to the United States as children, but pledged to assist DACA beneficiaries who return to Mexico. In June 2018, Mexico criticized U.S. "zero tolerance" immigration policies. Despite these developments, Mexico has continued to work with the United States on migration management and border issues. In E.O. 13678, the Trump Administration broadened the categories of authorized immigrants prioritized for removal. As a result, the profile of Mexican deportees now include more individuals who have spent many decades in the United States than in recent years (when the Obama Administration had focused on recent border crossers and those with criminal records). The potential for large-scale removal of Mexican nationals present in the United States without legal status is an ongoing concern of the Mexican government that reportedly has been expressed to Trump Administration officials. Mexico's consular network in the United States has bolstered the services offered to Mexicans in the United States, including access to identity documents and legal counsel. It has launched a 24-hour hotline and mobile consultants to provide support, both practical and psychological, to those who may have experienced abuse or are facing removal. The Mexican government has expressed hope that the U.S. Congress will develop a solution to resolve the phased ending of the DACA initiative. As of July 2018, some 561,400 Mexicans brought to the United States as children had received work authorizations and relief from removal through DACA. Many DACA recipients born in Mexico have never visited the country, and some do not speak Spanish. Since 2014, Mexico has helped the United States manage a surge in unauthorized migration from the "Northern Triangle" (El Salvador, Guatemala, and Honduras). Collectively, those countries have overtaken Mexico as the primary source for migrants apprehended at the U.S.-Mexico border. From 2015 to November 2018, Mexico reported apprehending almost 524,000 migrants and asylum seekers from the Northern Triangle. As U.S. asylum policies have tightened, Mexico also has absorbed more Central Americans in need of humanitarian protection (see Figure 7 ). Mexico has received U.S. assistance for its immigration control efforts through the Mérida Initiative. Mexico has received support for its humanitarian protection efforts through global U.S. Migration and Refugee Assistance (MRA) implemented by the U.N. High Commissioner for Refugees (UNHCR) and others. Some U.S. policymakers have praised Mexico's management of these migration flows, whereas others have questioned Mexico's ability to protect migrants from abuse and to provide asylum to those in need of protection. The López Obrador administration has a broad vision of addressing immigration by protecting human rights, decriminalizing migration, and cooperating with Central America. Implementing this vision has thus far proved difficult in an environment of increased flows from the Northern Triangle and pressure from the United States to limit them. The Mexican government has long maintained that the best way to stop illegal immigration from Central America is to address the insecurity and lack of opportunity there, but fiscal limitations limit its ability to support Central American efforts to address those challenges. As previously mentioned, the U.S. and Mexican governments issued a joint statement in December 2018 pledging to boost public and private investment in Central America. On March 29, 2019, the Trump Administration announced that it intends to end foreign assistance programs for the Northern Triangle countries for failing to combat unauthorized migration, appearing to reverse its prior pledge. The State Department has indicated that the decision will affect approximately $450 million in FY2018 funding. The López Obrador administration has provided humanitarian relief to Central American migrants in Mexico, but not increased funding for the migration agency or asylum system. Under pressure from the United States and with its migration stations overcapacity, the Mexican government has recently limited protections and increased deportations, particularly for those traveling in large groups or caravans, to discourage future flows. From April 1-22, 2019, Mexico removed nearly 11,800 people, up from 9,650 removed in the month of April 2018. Mexico's asylum system is underfunded and overwhelmed; it received 29,000 applications in 2018 even as 80% of applications from 2017 still awaited resolution. President López Obrador's desire to maintain positive relations with the U.S. government has prompted domestic criticism and may cause strain in its relations with some Central American governments. His government's decision to allow Central American asylum seekers to be returned to Mexico under the U.S. Migrant Protection Protocols (MPP) to obtain humanitarian visas—rather than challenging the MPP—has put pressure on local governments and aid organizations to assist the migrants. Many state it may also be putting migrants' lives at risk; many Mexican border cities are among the countries most dangerous. Since the terrorist attacks of September 11, 2001, there have been significant delays and unpredictable wait times at the U.S.-Mexican border. The majority of U.S.-Mexican trade passes through a port of entry along the southwestern border, often more than once, due to the increasing integration of manufacturing processes in the United States and Mexico. Past bilateral efforts discussed below have contributed to reductions in wait times at some points of entry, but infrastructure and staffing issues remain on both the U.S. and Mexican sides of the border. One effort that has continued is the use of public-private partnerships to address those issues. On May 19, 2010, the United States and Mexico declared their intent to collaborate on enhancing the U.S.-Mexican border as part of pillar three of the Mérida Initiative. A Twenty-First Century Border Bilateral Executive Steering Committee (ESC) has met since then, most recently in November 2017, to develop binational action plans and oversee implementation of those plans. The plans set goals within broad objectives: coordinating infrastructure development, expanding trusted traveler and shipment programs, establishing pilot projects for cargo preclearance, improving cross-border commerce and ties, and bolstering information sharing among law enforcement agencies. In 2015, the two governments opened the first railway bridge in 100 years at Brownsville-Matamoros and launched three cargo pre-inspection test locations where U.S. and Mexican customs officials are working together. A Mexican law allowing U.S. customs personnel to carry arms in Mexico hastened these bilateral efforts. In recent months, wait times have lengthened as a result of U.S. efforts to deal with an influx of Central American asylum seekers and to hasten construction of additional border barriers. Businesses have been concerned that unless López Obrador speaks out, President Trump may adopt policies that could exacerbate the delays at the border resulting from his decision to transfer customs personnel from ports of entry to perform migration management duties. As an example, President Trump has recently threatened to close the U.S.-Mexico border or to impose 25% tariffs on Mexican motor vehicle exports to the United States if the Mexican government does not increase its efforts to stop U.S.-bound migrants over the coming year. Mexico has recently urged the U.S. government to reconsider policies resulting in extended border delays. As Congress carries out its oversight function on U.S.-Mexican migration and border issues, questions that may arise include the following: How well is Mexico fulfilling its pledges to increase security along its northern and southern borders and to enforce its immigration laws? What is Mexico doing to address Central American migration through its territory? What is the current level of bilateral cooperation on border security and immigration and border matters, and how might that cooperation be improved? How well are the U.S. and Mexican governments balancing security and trade concerns along the U.S.-Mexican border? To what extent would the construction of a new border wall affect trade and migration flows in the region? The future of energy production in Mexico is important for Mexico's economic growth and for the U.S. energy sector. Mexico has considerable oil and gas resources, but its state oil company (Pemex), has struggled to counter declining production and postponed needed investments due to fiscal challenges. Mexico's 2013 constitutional reforms on energy opened up oil, electricity, gas, transmission, production, and sales to private and foreign investment while keeping ownership of Mexico's hydrocarbons under state control, as established in its 1917 constitution. The 2013 reforms created opportunities for U.S. businesses in exploration, pipeline construction and ownership, natural gas production, and commercial gasoline sales. Although the reforms did not privatize Pemex, they did expose the company to competition and hastened its entrance into joint ventures. Because of the reforms, Mexico has received more than $160 billion in promised investment. However, the reforms ended subsidies that kept gasoline prices low for Mexican consumers and failed to reverse production declines and ongoing problems within Pemex. Pemex's debt increased by more than 60% from 2013 to 2017. While analysts still predict that the reforms will bring long-term benefits to the country, the Peña Nieto administration oversold their short-term impacts, which has emboldened those within the López Obrador government who have opposed private involvement in the sector. The United States sought to help lock in Mexico's energy reforms through the NAFTA renegotiations. NAFTA includes some reservations for investment in Mexico's energy sector. The proposed USMCA would reinforce Mexico's 2013 constitutional reforms and the current legal framework for private energy projects in Mexico. It also would apply similar investor-state dispute settlement mechanisms that currently exist in NAFTA to the oil and gas, infrastructure, and other energy sectors. In addition, the free trade agreement would allow for expedited exports of U.S. natural gas to Mexico, which have increased about 130% since the 2013 reforms. Private sector trade, innovation, and investment have created a North American energy market that is interdependent and multidirectional, with cross-border gas pipelines and liquefied natural gas (LNG) shipments from the United States to Mexico surging. In 2018, the value of U.S. petroleum products exports to Mexico totaled $30.6 billion, nearly double the value of U.S. energy imports from Mexico ($15.8 billion). Some experts estimate that the United States, Mexico, and Canada represent 20% of global oil and gas supply, as well as 20%-25% of the expected additions to international supply over the next 25 years. They believe that deepened energy cooperation with Mexico will give North America an industrial advantage. López Obrador's plans for Mexico's energy sector are still developing. He opposed the 2013 reforms, but he and his top officials have said that his government will honor existing contracts that do not involve any corruption. Despite that commitment, the new government has halted future rounds of auctions and plans to upgrade existing refineries and construct a new refinery in Tabasco rather than importing U.S. natural gas. López Obrador's energy plans also focus on revitalizing Pemex, although the company's financial problems have already become a financial burden for the government and its credit rating has been downgraded. The government's decision to halt new auctions in wind and solar energy, which had also attracted significant investment as a result of the reforms, has led some environmentalists to challenge López Obrador's commitment to a clean energy future for Mexico. Opportunities exist for continued U.S.-Mexican energy cooperation in the hydrocarbons sector, but the future of those efforts may depend on the policies of the López Obrador government. Leases have been awarded in the Gulf of Mexico under the U.S.-Mexico Transboundary Agreement, which was approved by Congress in December 2013 ( P.L. 113-67 ). Bilateral efforts to ensure that hydrocarbon resources are developed without unduly damaging the environment could continue, possibly through collaboration between Mexican and U.S. regulatory entities. Educational exchanges and training opportunities for Mexicans working in the petroleum sector could expand. The United States and Mexico could build upon efforts to provide natural gas resources to help reduce energy costs in Central America and connect Mexico to the Central American electricity grid, as discussed during conferences on Central America cohosted by both governments in 2017 and in 2018. Analysts also have urged the United States to provide more technical assistance to Mexico—particularly in deepwater and shale exploration. In addition to monitoring energy-related issues as they pertain to NAFTA, oversight questions may focus on how the Transboundary Hydrocarbons Agreement is implemented, the extent to which Mexico is developing capable energy-sector regulators, and the effects of transnational crime groups and violence on Mexico's energy industry and the safety of foreign workers employed in the energy sector. An emerging issue for congressional oversight may involve the fairness of policies adopted by the incoming Mexican government toward foreign investors. The United States and Mexico share the waters of the Colorado River and the Rio Grande. These shared rivers have long presented complex issues leading to cooperation and conflict in the U.S.-Mexican border region and between the United States and Mexico. A bilateral water treaty from 1944 (the 1944 Water Treaty) and other binational agreements guide how the two governments share the flows of these rivers. The binational International Boundary and Water Commission (IBWC) administers these agreements and includes a U.S. Section that operates under foreign policy guidance from the U.S. Department of State. Since 1944, the IBWC has been the principal venue for addressing river-related disputes between the United States and Mexico. The 1944 Water Treaty authorizes the IBWC to develop rules and to issue proposed decisions, called minutes , regarding matters related to the treaty's execution and interpretation. Under the 1944 Water Treaty, the United States is required to provide Mexico annually with 1.5 million acre-feet (AF) of Colorado River water. U.S. deliveries to Mexico in the Rio Grande basin near El Paso/Ciudad Juárez occur annually under a 1906 binational convention, whereas Mexico's deliveries downstream of Fort Quitman, TX, are established in the 1944 Water Treaty. Mexico is to deliver to the United States a minimum amount during a five-year cycle. IBWC also administers other binational boundary and water-related agreements and projects for flood control and sanitation (principally wastewater treatment facilities) and binational reservoirs. Recent Developments in the Colorado River Basin . The United States continues to meet its Colorado River annual delivery requirements to Mexico pursuant to the 1944 Water Treaty. Recent IBWC actions on the Colorado River have focused on how to manage the Colorado River's water and infrastructure to improve water availability during drought and to restore and protect riverine ecosystems. The most recent minute governing basin operations, Minute 323 (signed in September 2017) is a set of binational measures that provides for binational cooperative basin water management, including environmental flows to restore riverine habitat. Minute 323 also provides for Mexico to share in cutbacks during shortage conditions in the U.S. portion of the basin, including delivery reductions under Drought Contingency Plans that were authorized by Congress in April 2019. In addition, Minute 323 designates a "Mexican Water Reserve" through which Mexico can delay its water deliveries from the United States and store its delayed deliveries upstream at Lake Mead, thereby increasing the lake's elevation. For the Colorado River basin, issues before Congress may be largely related to oversight of Minute 323 implementation and water management associated with potential shortage conditions. Recent Development in the Rio Grande Basin . On multiple occasions since 1994, Mexico has not met its Rio Grande delivery obligations within the five-year cycle established by the 1944 Water Treaty, most recently during the five-year cycle from 2010 to 2015. Mexico made up for those shortfalls in subsequent five-year cycles, as authorized under the 1944 Treaty. The October 2015 to October 2020 cycle is under way. Mexico offset its below-target deliveries for the first year of this cycle with additional deliveries in the second year. IBWC indicates that Mexico delivered less than its 350,000 AF in the third year of the cycle; however, higher deliveries in the second year resulted in Mexico's deliveries being almost at 98% of the three-year cumulative delivery target. In recent years, IBWC reportedly has been working toward a binational model for water management in the Rio Grande and obtaining input from binational working groups with the objective of improved predictability and reliability in water deliveries and treaty compliance. To date, Congress has been primarily involved in conducting oversight through reporting requirements for the U.S. Department of State. The FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) includes a reporting requirement from the Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs ( S.Rept. 115-282 ): Not later than 45 days after enactment of the act, the Secretary of State, in consultation with the IBWC Commissioner, shall submit to the Committee an update to the report required in section division J of Public Law 113–325 detailing efforts to establish mechanisms to improve transparency of data on, and predictability of, water deliveries from Mexico to the United States to meet annual water apportionments to the Rio Grande, in accordance with the 1944 Treaty between the United States and Mexico Respecting Utilization of Waters of the Colorado and Tijuana Rivers and of the Rio Grande, and actions taken to minimize or eliminate future water deficits to the United States. Pursuant to the various reporting requirements, various reports have been delivered to various committees of Congress, including in the spring of 2019. Recent Development in Wastewater and River Pollution . On border wastewater issues, congressional appropriators have shown interest in increasing oversight through statements and reporting requirements related to the pollution in the Tijuana River. Authorizing committees have engaged on issues related to wastewater management near Nogales, AZ. The FY2019 Consolidated Appropriations Act ( P.L. 116-6 ) includes a reporting requirement stating that Not later than 180 days after enactment of the act, the IBWC shall submit a report to the Committee quantifying the total annual volume and composition of transboundary flows that enter the United States from Mexico in the Tijuana watershed, as well as the amount of time between each discharge from Mexico and the notification of the U.S. Government and local communities, as recorded…by the IBWC. The report shall also include a description of steps taken by the IBWC and other relevant Federal agencies to implement additional mitigation measures to address increased flows in 2017 and 2018. Border Floodplain Encroachment . Discussion of increased U.S. security measures along the border, particularly the border between Texas and Mexico, may revive concerns regarding compliance with treaty provisions related to the construction of structures in the binational floodplain that increase flood risk. In addition to the water management and conservation issues addressed by the IBWC, the U.S. and Mexican governments have worked together on broader environmental issues in the border region since signing the La Paz Agreement in 1983. Led by the U.S. Environmental Protection Agency (EPA) and the Mexican secretary of environmental resources, the agreement committed the two governments to regularly consult and review environmental concerns. Federal funding and interest in border environmental issues peaked in the 1990s during the negotiations for and implementation of the environmental side agreement to NAFTA that created the North American Development Bank (NADB) and the Border Environment Cooperation Commission (BECC). Even after federal funding for border environmental projects decreased post-2000, the governments have continued to design and implement binational environmental programs. The current 10-year border program, Border 2020, is focused on cooperation in five areas: (1) reducing air pollution; (2) improving access to clean water; (3) promoting materials and waste management; (4) enhancing joint preparedness for environmental response; and (5) enhancing environmental stewardship. The Trump Administration's FY2020 budget request would zero out funding and staff for the U.S.-Mexican border programs run by the EPA. In FY2018 and FY2019, the Administration did not requested any funding for the programs, but Congress provided $3.0 million in EPA funding each year. In 2009, President Obama and then-President Calderón announced the Bilateral Framework on Clean Energy and Climate Change to jointly develop clean energy sources and encourage investment in climate-friendly technologies. Among others, its goals included enhancing renewable energy, combating climate change, and strengthening the reliability of cross-border electricity grids. USAID and Mexico also expanded cooperation through the Mexico Global Climate Change (GCC) Program, which began in 2010 and provided $50 million in funding through FY2016, although bilateral efforts on climate change began around 1990. By 2016, environmental protection and clean energy became a priority for North American cooperation. Mexico, Canada, and the United States all became parties to the Paris Agreement, which entered into force on November 4, 2016, under the U.N. Framework Convention on Climate Change. The Mexican Congress and the Canadian parliament ratified the Paris Agreement. In contrast, U.S. executive branch officials stated that the Paris Agreement is an executive agreement not requiring Senate advice and consent to ratification. President Obama signed an instrument of acceptance on behalf of the United States on August 29, 2016, without submitting it to Congress. On June 1, 2017, President Trump announced his intention to withdraw from the Paris Agreement. The Administration's FY2018 budget request, released on May 23, 2017, proposed to "eliminate U.S. funding for the Green Climate Fund (GCF) in FY2018, in alignment with the President's promise to cease payments to the United Nations' climate change programs." The FY2018 budget request also eliminates funding for Global Climate Change programs run by USAID, the Department of State, and the Department of the Treasury. Congress did not provide funding for those programs in FY2018. President López Obrador's 2018-2014 plan for the environment includes pledges to adjust government policies to comply with the Paris Accord and meet Mexico's Nationally Determine Contribution (NDC). It is unlikely that those pledges will be met, however, as López Obrador has also pledged to bolster hydrocarbons production rather than renewable energy sources. Environmental groups are concerned about López Obrador's plans to build a coal-fired refinery, which would reverse prior pledges to reduce the country's coal-based electricity generation beginning in 2017. According to data from Mexico's National Institute of Ecology and Climate Change, Mexico would need to invest $8 billion per year from 2014 to 2030 to meet its NDC. In 2017, the country reportedly invested $2.4 billion. Educational and research exchanges between the United States and Mexico have been occurring for decades, but they rose higher in the bilateral agenda during the Obama Administration as part of the High-Level Economic Dialogue. In 2011, President Obama established a program called "100,000 Strong in the Americas" to boost the number of U.S. students studying in Latin America (including Mexico) to 100,000 (and vice versa) by 2020. Similarly, President Peña Nieto implemented Proyecta 100,000, which aimed to have 100,000 Mexican students and researchers studying in the United States by 2018. Together, the U.S. and Mexican governments launched a Bilateral Forum on Higher Education, Innovation, and Research (FOBESII) in May 2013, which led to more than 80 partnerships between U.S. and Mexican universities. Both programs are still being implemented, albeit mostly with private funding. Country and bilateral efforts face continued challenges. In 2016-2017 (the latest year available), the number of U.S. students studying in Mexico increased by 10.8% compared to 2015-2016. In contrast, the number of Mexicans studying in the United States decreased by 8.9% in 2017-2018 as compared to the previous year. Mexico ranks ninth on the Institute of International Education's list of countries with students studying in the United States. China is number one and India is number two. A lack of scholarship funding and a lack of English language skills have been barriers for many Mexican students. Many analysts praised President Peña Nieto and his advisers for shepherding structural reforms through the Mexican Congress but predicted that the reforms' impact would depend on their implementation. Mexico's ranking in the World Economic Forum's Global Competiveness Index for 2017 improved, in part due to some of the reforms. Nevertheless, critics have alleged that votes in favor of the reforms "were duly purchased" by the PRI." Some of Mexico's reforms have faced problems due to issues in implementation; others have faced opposition from entrenched interest groups. Still others have faced unfavorable global conditions. Fiscal reforms faced challenges in tax collection, and a 2017 Supreme Court ruling reportedly watered down the telecommunications reform. Teachers unions, particularly in southern Mexico, vehemently opposed education reforms requiring teacher evaluations and accountability measures. In June 2016, 8 people died and more than 100 were injured after unions and police clashed in Oaxaca. Although Mexico's energy sector has attracted significant international investment, low global oil prices thus far have rendered shale resources and other unconventional fields unfeasible to develop.
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Congress has maintained significant interest in Mexico, an ally and top trade partner. In recent decades, U.S.-Mexican relations have grown closer through cooperative management of the 2,000-mile border, the North American Free Trade Agreement (NAFTA), and security and rule of law cooperation under the Mérida Initiative. Relations have been tested, however, by President Donald J. Trump's shifts in U.S. immigration and trade policies. On December 1, 2018, Andrés Manuel López Obrador, the leftist populist leader of the National Regeneration Movement (MORENA) party, which he created in 2014, took office for a six-year term after winning 53% of votes in the July 1, 2018, presidential election. Elected on an anticorruption platform, López Obrador is the first Mexican president in over two decades to enjoy majorities in both chambers of Congress. López Obrador succeeded Enrique Peña Nieto of the Institutional Revolutionary Party (PRI). From 2013-2014, Peña Nieto shepherded reforms through the Mexican Congress, including one that opened Mexico's energy sector to foreign investment. He struggled, however, to address human rights abuses, insecurity, and corruption. President López Obrador has pledged to make Mexico a more just and peaceful society, but also to govern with austerity. Given fiscal constraints and rising insecurity, observers question whether his goals are attainable. López Obrador aims to build infrastructure in southern Mexico, revive the state oil company, promote social programs, and maintain a noninterventionist position in foreign affairs, including the crisis in Venezuela. His power is constrained, however, by MORENA's lack of a two-thirds majority in Congress, which he would need to enact constitutional reforms or to roll back reforms. Non-MORENA governors have also opposed some of his policies. Still, as of April 2019, López Obrador had an approval rating of78%. U.S. Policy Despite predictions to the contrary, U.S.-Mexico relations under the López Obrador government have thus far remained friendly. Nevertheless, tensions have emerged over several key issues, including trade disputes and tariffs, immigration and border security issues, and Mexico's decision to remain neutral in the crisis in Venezuela. The new government has accommodated U.S. migration and border security policies, despite the domestic criticism it has received for agreeing to allow Central American asylum seekers to await U.S. immigration proceedings in Mexico and for rapidly increasing deportations. The Trump Administration requested $76.3 million for the Mérida Initiative for FY2020 (a 35% decline from the FY2018-enacted level). In November 2018, Mexico, the United States, and Canada signed a proposed U.S.-Mexico-Canada (USMCA) free trade agreement that, if approved by Congress and ratified by Mexico and Canada, would replace NAFTA. Mexico has applied retaliatory tariffs in response to U.S. tariffs on steel and aluminum imports imposed in 2018. Legislative Action The 116th Congress may consider approval of the USMCA. Congressional concerns regarding the USMCA include possible effect on the U.S. economy, working conditions in Mexico and the protection of worker rights, enforceability of USMCA labor provisions, U.S.-Mexican economic relations, and other issues. It is not known whether or when Congress will consider implementing legislation for USMCA. In January 2019, Congress provided $145 million for the Mérida Initiative ($68 million above the budget request) in the FY2019 Consolidated Appropriations Act (P.L. 116-6) and asked for reports on how bilateral efforts are combating flows of opioids, methamphetamine, and cocaine. The House also passed H.R. 133 (Cuellar), a bill that would promote economic partnership between the United States and Mexico, as well as educational and professional exchanges. A related bill, S. 587 (Cornyn), has been introduced in the Senate. Further Reading CRS In Focus IF10578, Mexico: Evolution of the Mérida Initiative, 2007-2019. CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation. CRS In Focus IF10215, Mexico's Immigration Control Efforts. CRS Report R45489, Recent Migration to the United States from Central America: Frequently Asked Questions. CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications. CRS Report R44981, NAFTA Renegotiation and the Proposed United States-Mexico-Canada Agreement (USMCA) CRS Report R45430, Sharing the Colorado River and the Rio Grande: Cooperation and Conflict with Mexico
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Over the last decade, migration to the United States from Central America—in particular from El Salvador, Guatemala, and Honduras (known collectively as the Northern Triangle)—has increased considerably. From 2006 to 2016, the number of individuals living in the United States who were born in the Northern Triangle grew from 2.2 million to almost 3 million; this increase (37%) was more than twice the increase for the total foreign-born population (16%). During the same period, the foreign-born population from Mexico living in the United States held steady at 11.5 million (which is more than any other country-of-birth group). In 2016, the foreign-born population from the Northern Triangle comprised less than 1.0% of the U.S. population and 6.8% of the 43.7 million foreign-born residents of the United States, up from 5.8% in 2006. Even though total apprehensions of illegal border crossers were at a 45-year low in FY2017, the number of families from the Northern Triangle apprehended at the U.S.-Mexico border has increased in recent years. While earlier migrants apprehended at the Southwest border were predominantly single, adult males from Mexico, currently the majority of apprehended migrants are families and unaccompanied children, and the majority of apprehended migrants come from the Northern Triangle. An increasing share of those arriving at the Southwest border are requesting asylum, some at official ports of entry and others after entering the United States "without inspection" (i.e., illegally) between U.S. ports of entry. This is adding to a large backlog of asylum cases in U.S. immigration courts. In the past year, news reports of migrant "caravans" from the Northern Triangle traveling toward the U.S. border have sparked intense interest and many questions from Congress, including the following: What factors are contributing to the increase in migration from the Northern Triangle to the United States? Is the choice to migrate in large groups a new trend? How are the United States, Mexico, and Central American governments responding? How are U.S. policies at the border—including security screening, removal proceedings, military involvement, and asylum processing—being implemented? This report addresses these and other frequently asked questions. The increase in the number of Central American migrants apprehended at the Southwest border is occurring within the context of historically low levels of total alien apprehensions (see Figure 1 ). Apprehensions of migrants of all nationalities increased consistently beginning in 1960, fluctuated between two peaks of 1.62 million in FY1986 and 1.64 million in FY2000, and then declined to a 45-year low of approximately 304,000 in FY2017. Apprehensions increased in FY2018 to 397,000, which was comparable to the annual Southwest border average (401,000) for the most recent 10-year period (FY2009-FY2018). Two demographic shifts, illustrated in the apprehension data, characterize recent migrant flows. First, over the past two decades the national origins of apprehended aliens have changed. In FY2000, almost all Southwest border apprehensions (98%) were of Mexican nationals. Beginning in FY2012, however, the percentage of apprehended aliens from Honduras, Guatemala, and El Salvador started to increase as a share of total apprehensions. By FY2018, foreign nationals from those three countries made up 52% of all apprehensions. Second, the type of migrants apprehended has also shifted. In the past, single adult males made up over 90% of apprehended aliens. Currently, the majority of apprehended migrants are families and unaccompanied children. From FY2012 to FY2018, the predominant national origins of such families changed from Mexico to the Northern Triangle countries (see Figure 2 ). (For more information, see CRS Report R45266, The Trump Administration's "Zero Tolerance" Immigration Enforcement Policy .) Many factors—including those in their countries of origin, destination countries (often the United States), and other countries—contribute to people's decisions to emigrate from the Northern Triangle. Drivers of migration are interrelated, often reinforcing one another. Over time, weak institutions and corrupt government officials, economic growth that does not significantly reduce chronic poverty, rising levels of crime, and demand for illicit drugs result in insecurity and citizens' low levels of confidence in government institutions. These in turn contribute to an increased desire to leave a country. The Northern Triangle countries have long histories of autocratic rule, weak institutions, and corruption. A lack of political will and capacity, rampant bribery and embezzlement of state funds, and some of the lowest tax collection rates in Latin America divert and diminish resources, leaving state institutions and programs underfunded. These problems also limit the governments' abilities to respond to crises such as natural disasters and food insecurity. All of these factors help perpetuate chronic poverty. While often cited as a leading cause of emigration from the Northern Triangle, poverty alone does not explain it. Over the past decade, transnational criminal organizations have used the Central American corridor for a range of illicit activities, including trafficking approximately 90% of cocaine bound for the United States. As a result, Northern Triangle countries have experienced extremely elevated homicide rates and general crime committed by drug traffickers, gangs, and other criminal groups. For instance, clashes between street gangs and, in El Salvador, between gangs and security forces, have paralyzed cities and some rural areas. A recent study found that the probability that an individual intends to migrate is 10-15 percentage points higher for Salvadorans and Hondurans who have been victims of multiple crimes than for those who have not. Finally, Central America has always been particularly subject to climate variability. According to the World Risk Index, Guatemala and El Salvador are among the 15 countries in the world most exposed to natural disasters, especially earthquakes and droughts. About one-fourth of those employed in the Northern Triangle work in the agriculture sector; widespread crop failures can have a devastating impact on people's livelihoods and ability to feed their families. According to the 2018 Global Hunger Index, Guatemala and Honduras ranked second and third in hunger levels in Central America and the Caribbean, behind Haiti. Research indicates that more intense and erratic weather patterns in recent years are strongly linked to food insecurity and migration. (For more information, see CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress ; CRS Report RL34027, Honduras: Background and U.S. Relations ; CRS Report R43616, El Salvador: Background and U.S. Relations ; CRS Report R42580, Guatemala: Political and Socioeconomic Conditions and U.S. Relations ; and CRS Report RL34112, Gangs in Central America .) The factors discussed above intersect with factors attracting migrants to the United States. Economic opportunity may motivate Northern Triangle families and unaccompanied children to migrate. Despite challenging labor market conditions for low-skilled minority youth in the United States, economic prospects for industrial sectors employing low-skilled workers have improved recently. Educational opportunities may also be a motivating factor in migration, as perceptions of free public education through high school may be widespread among young migrants. Family reunification is a key motive, as many migrants have family members among the sizable Salvadoran, Guatemalan, and Honduran foreign-born populations residing in the United States. While the impacts of actual and perceived U.S. immigration policies have been widely debated, it remains unclear if, and how, specific immigration policies have motivated families and children to migrate to the United States. Some contend that the United States' asylum policy, which allows asylum seekers to remain in the United States while they await a decision on their cases, has encouraged recent family and unaccompanied child migration to the country. Currently, immigration courts face a backlog of over 700,000 asylum cases, resulting in wait times of months or years, and a substantial portion of asylum seekers fail to appear in court. Others have argued that the revised humanitarian relief policies for unaccompanied children included in the Trafficking Victims Protection Reauthorization Act (TVPRA) of 2008, which expanded immigration relief options for such children, fostered a similar result among this migrant population. (For more information, see archived CRS Report R43628, Unaccompanied Alien Children: Potential Factors Contributing to Recent Immigration .) Migrants from the Northern Triangle traveling to the United States customarily have used various means to get to the Mexico-U.S. border, including walking, hitchhiking, riding on the top of trains through Mexico, and riding buses, all with or without the assistance of smugglers. Central American migrants have joined into groups to make the journey together as a way to share resources, avoid the cost of smugglers, and gain protection by the safety offered in numbers. "Caravans" have reportedly occurred for a least a decade, but they received little attention until last spring when a group of roughly 1,000 Central American migrants headed to the United States. About 400 migrants eventually made it to the U.S. border. In past years, ad hoc processions have been loosely organized by nonprofit groups wanting to call attention to the plight of migrants in their home communities, particularly those of families with children fleeing unsafe environments, poverty, and lack of protection from gang violence and extortion. Mobile phone technology has facilitated navigation and affords communication with impromptu groups, resulting in migrations that can expand and contract along the way. Under the U.S. Strategy for Engagement in Central America, the United States is working with Central American governments to promote economic prosperity, improve security, and strengthen governance in the region. The Obama Administration launched the strategy following a surge in apprehensions of unaccompanied alien children in 2014, and the Trump Administration largely has left the strategy in place. Congress appropriated an estimated $2.1 billion to support the strategy from FY2016-FY2018, roughly doubling annual aid levels for the region. The governments of El Salvador, Guatemala, and Honduras are carrying out complementary efforts under their Plan of the Alliance for Prosperity in the Northern Triangle. They collectively allocated an estimated $7.7 billion to the initiative from 2016-2018, though some analysts have questioned whether those funds have been targeted effectively. On December 18, 2018, the Trump Administration committed to providing $5.8 billion in public and private investment to support institutional reforms and development in the Northern Triangle. Nearly all of the foreign assistance included in that figure was appropriated in prior years and the remainder consists of potential loans, loan guarantees, and private sector resources that the U.S. Overseas Private Investment Corporation could mobilize if it is able to identify commercially viable projects. (For more information, see CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress .) It is too early to assess the full impact of recent U.S. efforts because implementation did not begin until 2017 for many of the programs funded under the U.S. Strategy for Engagement in Central America. Nevertheless, the Northern Triangle countries, with U.S. support, have made some tentative progress. For example, they have implemented some policy changes that have contributed to economic stability. At the same time, living conditions have yet to improve for many residents because the Northern Triangle governments have not invested in effective poverty-reduction programs. Security conditions also have improved in some respects, as homicide rates have declined for three consecutive years. Still, many Northern Triangle residents continue to feel insecure, and the percentage of individuals reporting they were victims of crime increased in all three nations between 2014 and 2017. The countries' attorneys general—with the support of the U.N.-backed International Commission against Impunity in Guatemala and the Organization of American States-backed Mission to Support the Fight against Corruption and Impunity in Honduras—have made significant progress in the investigation and prosecution of high-level corruption cases. Those efforts could be undermined, however, as they have received considerable pushback from political and economic elites in the region. (For more information, see CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress .) Since a surge of unaccompanied child migrants from the Northern Triangle transited Mexico to the United States in 2014, Mexico has helped the United States manage flows of Central American migrants and has received more than $100 million in U.S. funding for those efforts. From 2015 through 2018, Mexico returned almost 524,000 migrants who entered it from the Northern Triangle countries. At the same time, Mexico has provided temporary visas for those who want to work in its southern border states, as well as humanitarian visas and access to asylum for those who do not raise criminal or terrorist concerns when their biometric information is run against U.S. databases. President Andrés Manuel López Obrador has thus far been willing to shelter some U.S.-bound Central American migrants, but he urged the U.S. government to invest in southern Mexico and Central America to prevent future unauthorized migration. On December 18, 2018, the two governments made a joint announcement in support of economic development in Mexico and the Northern Triangle. The Mexican government has faced pressure from the United States to help contain and disperse recent caravans of Central American migrants transiting the country; humanitarian groups, by contrast, have urged it to assist the migrants. In fall 2018, Mexican citizens, aid groups, and local, state, and federal entities provided migrants with food, shelter, and emergency aid. As of early December 2018, the U.N. High Commissioner for Refugees (UNHCR) reported that 3,300 members of migrant caravans had applied for asylum in Mexico. At the same time, more than 3,000 people had accepted voluntary repatriation to their countries of origin. With U.S. ports of entry limiting the number of migrants accepted each day for asylum screening, border cities may have to shelter thousands of migrants for many months. Mexico's refugee agency, which has received support from UNHCR (discussed below), was overwhelmed processing record numbers of applications prior to the arrival of recent migrant caravans. In late 2018, the U.S. and Mexican governments were negotiating an agreement—dubbed "Remain in Mexico"—that would have required U.S.-bound asylum seekers who could not demonstrate that they faced imminent danger in Mexico to remain there as their U.S. asylum claims were processed. Prior to the conclusion of a final bilateral agreement, the U.S. Department of Homeland Security (DHS) notified Mexico that it would implement a new policy under Section 235(b)(2)(C) of the Immigration and Nationality Act to return some non-Mexican asylum seekers (excluding unaccompanied minors) to Mexico to await their immigration court decisions. Mexico responded with a statement declaring that it has the right to admit or reject foreigners arriving in its territory, and that it would provide humanitarian visas and work permits to certain non-Mexicans awaiting U.S. immigration proceedings and offer some individuals the ability to apply for asylum in Mexico. Mexico reportedly began implementing this policy in mid-January, and the United States returned the first asylum seeker to Mexico under its new policy—dubbed the "Migrant Protection Protocols"—on January 29, 2019. Mexican officials have reportedly stated that they will not accept minors or individuals over age 60 awaiting asylum claims. Concerns over the costs to local governments of sheltering migrants and the safety of migrants could make this policy difficult to maintain. (For more information, see CRS In Focus IF10215, Mexico's Immigration Control Efforts .) A range of organizations provide humanitarian assistance to people traveling from the Northern Triangle toward the United States, including U.N. entities and other intergovernmental organizations, local and national non-governmental organizations, and the private sector. According to UNHCR —a key U.N. entity operating in the region— comprehensive assistance is needed at all phases of the journey, including food, medical care, shelter, protection, and, in many cases, legal support. Experts characterize this flow of people from the Northern Triangle as mixed migration, defined as different groups—such as economic migrants, refugees, asylum-seekers, trafficked persons, and unaccompanied children—who travel the same routes and use the same modes of transportation. The distinctions between groups in mixed migration flows raise questions about their status and rights. While refugees are granted certain rights and protection under international refugee law, migrants are not protected by a comparable set of rules or treaties. Nevertheless, UN HCR asserts that transit and destination countries should provide all of these groups access to humanitarian assistance, protection , and due process to assess their asylum claims, even if they do not qualify as refugees. Those who flee are often unsafe not only in their home countries, but also during their journey north where they face recruitment into criminal gangs, sexual and gender-based violence, and murder. Many are vulnerable, including women, children, the elderly, and those with disabilities. In Mexico, UNHCR provides immediate and longer-term support by working with local and federal governments and alongside civil society and other partners. In addition to shelter and cash-based humanitarian assistance, broader safety mechanisms include improved screening procedures and dissemination of information for those fleeing violence, increased ways to guard against smugglers and traffickers, and enhanced access to the Mexican asylum system. Even with additional support from UNHCR, Mexico's Commission for the Aid of Refugees (COMAR) lacks sufficient capacity to process claims. UNHCR and other organizations are also being mobilized along the caravan routes in places such as Chiapas, Oaxaca, and Tijuana. International humanitarian efforts aim to align with the Comprehensive Regional Protection and Solutions Framework, an intergovernmental agreement that defends the rights of migrants and refugees who live in or cross the territories of Belize, Costa Rica, Guatemala, Honduras, Mexico, and Panama. In general, most Latin American and Caribbean countries are part of an ongoing forum to address issues driving displacement such as poverty, economic decline, inflation, violence, disease, and food insecurity. In the current situation, U.N. and other experts urge donors to provide timely and predictable international funding to support host governments and local communities that are assisting arriv als. Several federal agencies are involved in immigration processing at land, air, and sea ports of entry and along U.S. borders shared with Mexico and Canada. The following descriptions are not exhaustive of all the duties carried out by each entity; they are a selection of duties relevant to immigration enforcement at the Southwest border at and between land ports of entry. The Department of Homeland Security (DHS) includes several relevant components: Customs and Border Protection (CBP) is responsible for facilitating lawful trade and travel while preventing unauthorized people and contraband from entering the country. Within CBP, U.S. Border Patrol is the law enforcement agency that secures U.S. borders at and between ports of entry; Border Patrol agents apprehend and hold foreign nationals who have no valid entry documents when they reach ports of entry or who attempt to cross between ports of entry. CBP's Office of Field Operations (OFO) operates U.S. ports of entry and conducts immigration inspections of arriving foreign nationals to determine their admissibility to the United States. Immigration and Customs Enforcement (ICE) is responsible for protecting the country from cross-border crime and illegal immigration that threatens national security and public safety. ICE's Enforcement and Removal Operations (ERO) enforces immigration laws pertaining to the detention and removal of unauthorized aliens and oversees detention centers, including family detention centers. ICE also finds and removes deportable aliens located in the U.S. interior. United States Citizenship and Immigration Services (USCIS) is responsible for adjudication of immigration and naturalization petitions, consideration of refugee and asylum claims and related humanitarian and international concerns, and other services, such as issuing employment authorizations and processing nonimmigrant change-of-status petitions. At the border, USCIS asylum officers interview foreign nationals who arrive without admissions documents at a port of entry or who encounter a Border Patrol agent and express a fear of return to their home countries based on persecution. If migrants are found to have "credible fear," they are referred to an immigration judge for a hearing. The Department of Justice (DOJ) runs the Executive Office for Immigration Review (EOIR ), the federal government's immigration courts. Immigration judges determine whether an alien is removable or is eligible for some type of immigration relief during the removal process (e.g., asylum or withholding of removal). The standard removal process is a civil administrative proceeding involving a DHS attorney and an EOIR immigration judge to determine whether an alien should be removed. (For more information, see CRS Report R43892, Alien Removals and Returns: Overview and Trends .) The Department of Health and Human Services' (HHS ' ) Office of Refugee Resettlement (ORR) is responsible for the care of unaccompanied alien children (UAC) and their subsequent placement in appropriate custody. ICE handles custody transfer or repatriation. (For more information, see archived CRS Report R43599, Unaccompanied Alien Children: An Overview .) Aliens apprehended for illegally entering the United States between U.S. ports of entry generally face civil penalties for illegal presence in the United States and may face criminal penalties for illegal entry. Aliens who have been removed face additional criminal penalties if they are apprehended for illegal reentry. Aliens apprehended for illegal entry and reentry are subject to prosecution in federal criminal courts by DOJ. All apprehended aliens, including children, are placed into one of two types of immigration removal proceedings: standard proceedings that involve formal hearings in an immigration court run by DOJ's EOIR before an immigration judge, or streamlined "expedited removal" proceedings without such hearings. ICE is responsible for legally representing the government during removal proceedings. CBP may refer aliens to DOJ for criminal prosecution depending on whether they meet current criminal enforcement priorities. If CBP does not refer apprehended aliens to DOJ for criminal prosecution, CBP may either return them to their home countries using expedited removal or transfer them to ICE custody for immigration detention while they are in formal removal proceedings. (For more information, see CRS Report R45314, Expedited Removal of Aliens: Legal Framework .) Aliens who wish to request asylum may do so at a U.S. port of entry before a CBP officer or upon apprehension by a CBP officer between U.S. ports of entry. Aliens requesting asylum at the border are entitled to an interview assessing the credibility of their asylum claims. (For more information, see " What is the process for seeking asylum in the United States? " below.) During the brief period when the Trump Administration's "zero tolerance" policy was in effect (May and June 2018), DOJ sought the prosecution of all adults caught entering illegally, including asylum seekers and adults accompanied by children. On June 20, 2018, following considerable and largely negative public attention to family separations stemming from the zero tolerance policy, President Trump issued an executive order (EO) effectively ending the policy. While it was in effect, DHS classified all children accompanying criminally prosecuted adults as UAC and turned them over to HHS' ORR, where they were housed temporarily in its shelters. After the prosecuted adults served any applicable criminal sentence, they were transferred to ICE custody, placed in immigration detention, and eventually, in most cases, reunited with their children, either in family detention or upon release into the United States on bond, an order of supervision, or another condition of release. Other parents were deported before they were reunited with their children, and a small number of parents still in the United States remain separated from their children. (For more information, see CRS Report R45266, The Trump Administration's "Zero Tolerance" Immigration Enforcement Policy .) The Immigration and Nationality Act (INA) provides, subject to certain exceptions and restrictions, that aliens who are in the United States or who arrive in the United States (whether or not at an official port of entry) may apply for asylum, regardless of their immigration status. Asylum may be granted by a USCIS asylum officer or a DOJ EOIR immigration judge. To receive asylum, an alien must establish, among other requirements, that he or she is unable or unwilling to return to his or her home country because of past persecution or a well-founded fear of future persecution based on one of five protected grounds (race, religion, nationality, membership in a particular social group, or political opinion). Certain aliens, such as those who are determined to pose a danger to U.S. security, are ineligible to receive asylum. Special asylum provisions apply to aliens who are subject to a streamlined removal process known as expedited removal. In order for such an alien to be considered for asylum, a USCIS asylum officer first must determine that the alien has a credible fear of persecution. (For more information, see CRS Report R45314, Expedited Removal of Aliens: Legal Framework .) In June 2018, the Attorney General, whose decisions are binding on DHS officers and immigration judges, issued a decision regarding the adjudication of asylum claims based on "membership in a particular social group." In the decision, Attorney General Sessions stated that "[g]enerally, claims by aliens pertaining to domestic violence or gang violence perpetrated by non-governmental actors will not qualify for asylum" based on the "membership in a particular social group" ground. He further noted that because such claims would not generally qualify for asylum, they also would not generally meet the threshold for a finding of a credible fear of persecution. USCIS subsequently issued a policy memorandum to provide guidance to its asylum officers in light of the Attorney General's decision. The memorandum included guidance on determining whether an alien is eligible for asylum as well as whether an alien has a credible fear of persecution and thus can pursue an asylum claim. The new policies regarding credible fear of persecution determinations were challenged in federal court. In December 2018, a federal district court judge permanently enjoined the U.S. government from continuing some of the new credible fear policies. Other components of the former Attorney General's decision and the USCIS memorandum, including standards for adjudicating asylum claims, remain in effect. (For more information, CRS Legal Sidebar LSB10207, Asylum and Related Protections for Aliens Who Fear Gang and Domestic Violence .) TECS (not an acronym) is the main system that CBP officers employ at the border and elsewhere to screen arriving travelers and determine their admissibility. CBP also uses the Automated Targeting System (ATS), which is a decision support tool. As one of its functions, ATS "compares information about travelers and cargo arriving in, transiting through, or exiting the country, against law enforcement and intelligence databases," including information from the Terrorist Screening Databased (TSDB, commonly referred to as the terrorist watchlist). As its name suggests, Automated Targeting System-Passenger (ATS-P) is the portion of ATS focused on passengers, "for the identification of potential terrorists, transnational criminals, and, in some cases, other persons who pose a higher risk of violating U.S. law" and is used by CBP personnel at the border, ports of entry, and elsewhere, including screening the passenger manifests of all U.S. bound international flights. (For more information, see CRS Report R44678, The Terrorist Screening Database and Preventing Terrorist Travel .) Active duty and National Guard personnel have performed a variety of missions on the Southwest border in the past, including ground and aerial surveillance, road and fencing construction, intelligence analysis, transportation, maintenance, and communications support. According to a DOD news release, the National Guard personnel who deployed to the border in April 2018 would provide "surveillance, engineering, administrative and mechanical support to border agents." A subsequent DOD news release announcing the deployment of active duty personnel in October 2018 stated that CBP " requested aid in air and ground transportation, and logistics support, to move CBP personnel where needed. Officials also asked for engineering capabilities and equipment to secure legal crossings, and medical support units. CBP also asked for housing for deployed Border Protection personnel and extensive planning support." The Trump Administration issued a memo on November 20, 2018, which authorized military personnel to perform those military protective activities that the Secretary of Defense determines are reasonably necessary to ensure the protection of Federal personnel, including a show or use of force (including lethal force, where necessary), crowd control, temporary detention and cursory search. Department of Defense personnel shall not, without further direction from the President, conduct traditional civilian law enforcement activities, such as arrest, search, and seizure in connection with the enforcement of the laws. During a discussion with reporters on November 21, 2018, Secretary of Defense James Mattis responded to questions about the potential use of military personnel in a law enforcement role: The one point I want to make again is we are not doing law enforcement. We do not have arrest authority. Now the governors could give their troops arrest authority. I don't think they've done that, but there are—is no arrest authority under Posse Comitatus for the U.S. federal troops. You know, that can be done but it has to be done in accordance with the law, and that has not been done nor has it been anticipated. Later in the interview he stated On detention, we do not have arrest authority. Detention would—I would put it in terms of minutes. In other words, if someone's beating on a Border Patrolman and if we were in position to have to do something about it, we could stop them from beating on them and take him over and deliver him to a Border Patrolman, who would then arrest him for it…. There's no violation of Posse Comitatus, there's no violation here at all. We're not going to arrest or anything else. To stop someone from beating on someone and turn them over to someone else—this is minutes not even hours, okay? According to a January 14 news release from DOD, Acting Secretary of Defense Patrick Shanahan approved continued DOD assistance to DHS through September 30, 2019. It also noted that "DOD is transitioning its support at the southwestern border from hardening ports of entry to mobile surveillance and detection, as well as concertina wire emplacement between ports of entry. DOD will continue to provide aviation support." The Posse Comitatus Act constrains how military personnel may be used in a law enforcement capacity at the border. The Posse Comitatus Act is a criminal prohibition that provides Whoever, except in cases and under circumstances expressly authorized by the Constitution or Act of Congress, willfully uses any part of the Army or the Air Force as a posse comitatus or otherwise to execute the laws shall be fined under this title or imprisoned not more than two years, or both. Consequently, there must be a constitutional or statutory authority to use federal troops in a law enforcement capacity to enforce immigration or customs laws directly by, for example, stopping aliens from entering the country unlawfully, apprehending gang members, or seizing contraband. As noted in a section below, federal law permits the Armed Forces to act in a supporting role for civil authorities by providing logistics or operating and maintaining equipment, among other things. Case law suggests that the Posse Comitatus Act is violated when (1) civilian law enforcement officials make a direct active use of military personnel to execute the law; (2) the use of the military pervades the activities of the civilian officials; or (3) the military is used so as to subject persons to the exercise of military power which is regulatory, prescriptive, or compulsory in nature. The Posse Comitatus Act does not apply to the National Guard unless it is activated for federal service. One possible statutory exception the President could potentially invoke for direct military enforcement is the Insurrection Act provision for sending troops whenever he determines that "unlawful obstructions, combinations, or assemblages, or rebellion against the authority of the United States, make it impracticable to enforce the laws of the United States … by the ordinary course of judicial proceedings." However, the Insurrection Act appears never to have been invoked to respond to unlawful migrant border crossings, and its application in such a situation has not been tested in court. The executive branch has long asserted two constitutional exceptions to the Posse Comitatus Act "based upon the inherent legal right of the U.S. Government … to insure the preservation of public order and the carrying out of governmental operations within its territorial limits, by force if necessary." These exceptions include the emergency authority "to prevent loss of life or wanton destruction of property and to restore governmental functioning and public order when sudden and unexpected civil disturbances, disasters, or calamities seriously endanger life and property and disrupt normal governmental functions to such an extent that duly constituted local authorities are unable to control the situation"; and the authority to "protect Federal property and Federal governmental functions when the need for protection exists and duly constituted local authorities are unable or decline to provide adequate protection." (For more information, see CRS Report R42659, The Posse Comitatus Act and Related Matters: The Use of the Military to Execute Civilian Law .) President Trump has contemplated proclaiming a national emergency pursuant to the National Emergencies Act (NEA) in order to fund a physical barrier at the southern border with Mexico using DOD funds. Declaring a national emergency could permit the President to invoke two statutes that could potentially permit either the use of unobligated military construction funds or the reprogramming of Army Corps of Engineers civil works funds. Military Construction Funds . Upon declaring a national emergency pursuant to the NEA, the President may invoke the emergency military construction authority in 10 U.S.C. §2808. Originally enacted in 1982, Section 2808 provides that upon the President's declaration of a national emergency "that requires use of the armed forces," the Secretary of Defense may "without regard to any other provision of law ... undertake military construction projects ... not otherwise authorized by law that are necessary to support such use of the armed forces." Section 2808 limits the funds available for emergency military construction to "the total amount of funds that have been appropriated for military construction" that have not been obligated. With certain limited exceptions, Presidents have generally invoked this authority in connection with construction at military bases in foreign countries. The circumstances in which the Section 2808 authority could be used to deploy barriers along the border appears to be a question of first impression, and one that is likely to be vigorously litigated. It appears that three interpretive questions could impede such use. First , there may be dispute about whether conditions at the border provide a sufficient factual basis to invoke Section 2808. Before the Section 2808 authority may be used, the President must determine that the relevant construction project would address a problem qualifying as a national emergency "that requires use of the armed forces." Moreover, the construction project must be "necessary to support such use of the armed forces." Second , if the above criteria are met, then an assessment would be necessary to determine whether construction of a border wall qualifies as a "military construction project" within the meaning of Section 2808. Title 10 defines the term "military construction project" for purposes of Section 2808 to include "military construction work," and defines "military construction" as "includ[ing] any construction, development, conversion, or extension of any kind carried out with respect to a military installation ... or any acquisition of land or construction of a defense access road." Because there does not appear to be case law addressing the scope of this definition of "military construction," the question of whether Section 2808 extends to the construction of a border wall appears to be an issue of first impression. Third , if a court were to review the invocation of Section 2808 to construct a border wall, its analysis might be informed by the location of particular barriers. It is possible that a border wall will be "necessary to support such use of the armed forces" at some locations but not others. Likewise, the construction of a wall over certain areas of the border—specifically, areas that directly abut military bases—would appear to have a greater claim to qualifying as construction undertaken "with respect to a military installation" than construction at other locations along the border. Army Corp s of Engineers Funds. Section 2293 of Title 33, U.S. Code, authorizes the Secretary of the Army to terminate or defer Army civil works projects that are "not essential to the national defense" upon a declaration of a national emergency under the NEA "that requires or may require the use of the Armed Forces." The Secretary of the Army can then use the funds otherwise allocated to those projects for "authorized civil works, military construction, and civil defense projects that are essential to the national defense." As with Section 2808, it is unsettled whether the construction of a border wall would qualify as an "authorized civil works, military construction, [or] civil defense project[]." This uncertainty is compounded by the difficulty of determining whether the qualifier "authorized" modifies all of the items enumerated in Section 2293 or only the term "civil works." If the term "authorized" modifies all of the items in the relevant sentence, then Section 2293 arguably would not allow the President to construct a border wall if that term is read to mean specifically authorized by Congress. Courts have traditionally afforded significant deference to executive claims of military necessity, deference which may stand as a substantial obstacle to legal challenges to any factual findings supporting the invocation of either Section 2808 or Section 2293. (For more information, see CRS Legal Sidebar LSB10242, Can the Department of Defense Build the Border Wall? ) The President's authority to use military personnel to support border security operations depends on whether those personnel are active duty troops serving under Title 10, U.S. Code, or National Guard troops operating under Title 32, U.S. Code. Section 502 of Title 32, U.S. Code, provides the authority for the Secretary of the Army and the Secretary of the Air Force to call National Guard units to full-time duty under Title 32 status for training "or other duty in addition to" mandatory training. Section 502(f) "other duty" may include "homeland defense activities." Such activities are defined to mean activities: undertaken for the military protection of the territory or domestic population of the United States, or of infrastructure or other assets of the United States determined by the Secretary of Defense as being critical to national security, from a threat or aggression against the United States. Chapter 15 of Title 10, U.S. Code—Military Support for Civilian Law Enforcement Agencies—provides general legislative authority for the Armed Forces to provide certain types of support to federal, state, and local law enforcement agencies, particularly in counterdrug, counterterrorism, and counter-transnational crime efforts. Such authorities permit the military to provide certain types of support for border security and immigration control operations. These authorities permit DOD to share information collected during the normal course of military operations, loan equipment and facilities, provide expert advice and training, and maintain and operate equipment. To assist federal law enforcement agencies, military personnel may maintain and operate equipment in conjunction with counterterrorism operations or the enforcement of counterdrug laws, immigration laws, and customs requirements. To assist federal law enforcement agencies in counter drug operations, military personnel may, among other things, engage in the "[c]onstruction of roads and fences and installation of lighting to block drug smuggling corridors across international boundaries of the United States." Chapter 15 support authority "does not include or permit direct participation by a member of the Army, Navy, Air Force, or Marine Corps in a search, seizure, arrest, or other similar activity unless participation in such activity by such member is otherwise authorized by law." One other possible source of authority is Section 1059 of the National Defense Authorization Act of 2016. That provision authorized the Secretary of Defense, with the concurrence of the Secretary of Homeland Security, to spend up to $75 million of 2016 DOD funds to provide assistance to CBP "for purposes of increasing ongoing efforts to secure the southern land border of the United States." The types of assistance permitted include "deployment of members and units of the regular and reserve components of the Armed Forces to the southern land border of the United States" along with "manned aircraft, unmanned aerial surveillance systems, and ground-based surveillance systems to support continuous surveillance of the southern land border of the United States" and "[i]ntelligence analysis support." (For more information, see CRS Legal Sidebar LSB10121, The President's Authority to Use the National Guard or the Armed Forces to Secure the Border .) Congress provided the President with significant discretion to reduce foreign assistance to Central America in FY2018. In the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), Congress designated "up to" $615 million for the Central America strategy, effectively placing a ceiling on aid but no floor. The act also requires the State Department to withhold 75% of assistance for the central governments of El Salvador, Guatemala, and Honduras until the Secretary of State certifies that those governments are addressing a variety of congressional concerns, including improving border security, combating corruption, and protecting human rights. The act empowers the Secretary of State to suspend and reprogram aid if he determines the governments have made "insufficient progress" in addressing the legislative requirements. The President's ability to modify assistance to the Northern Triangle countries for FY2019 will depend on provisions Congress may include in future appropriations legislation. Citing constitutional and statutory authority, the President issued a presidential proclamation on November 9, 2018, to immediately suspend the entry into the United States of aliens who cross the Southwest border between ports of entry. The proclamation indicates that its entry suspension provisions will expire 90 days after its issuance date or on the date that the United States and Mexico reach a bilateral agreement that allows for the removal of asylum seekers to Mexico, whichever is earlier. Also on November 9, 2018, DHS and DOJ jointly issued an interim final rule to bar an alien who enters the United States in contravention of the proclamation from eligibility for asylum. Under the rule, an asylum officer is to make a negative credible fear determination in the case of such an alien. (For more information, see CRS Insight IN10993, Presidential Proclamation on Unlawful Border Crossers and Asylum .) The proclamation and the rule are being challenged in federal court. As of the date of this report, the changes to the asylum process set forth in the rule are not in effect. (For more information, see CRS Legal Sidebar LSB10222, District Court Temporarily Blocks Implementation of Asylum Restrictions on Unlawful Entrants at the Southern Border .) For more information on relevant topics and issues Congress may consider, see the following reports or contact the authors: CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer CRS Report R45120, Latin America and the Caribbean: Issues in the 115th Congress , coordinated by Mark P. Sullivan (see "Migration Issues" section) CRS In Focus IF10215, Mexico's Immigration Control Efforts , by Clare Ribando Seelke and Carla Y. Davis-Castro CRS Report R43616, El Salvador: Background and U.S. Relations , by Clare Ribando Seelke CRS Report RL34027, Honduras: Background and U.S. Relations , by Peter J. Meyer CRS Report R42580, Guatemala: Political and Socioeconomic Conditions and U.S. Relations , by Maureen Taft-Morales CRS Report R45266, The Trump Administration's "Zero Tolerance" Immigration Enforcement Policy , by William A. Kandel CRS Insight IN10993, Presidential Proclamation on Unlawful Border Crossers and Asylum , by Andorra Bruno CRS Report RS20844, Temporary Protected Status: Overview and Current Issues , by Jill H. Wilson CRS Legal Sidebar LSB10150, An Overview of U.S. Immigration Laws Regulating the Admission and Exclusion of Aliens at the Border , by Hillel R. Smith CRS Report R42138, Border Security: Immigration Enforcement Between Ports of Entry , coordinated by Audrey Singer CRS Report R43356, Border Security: Immigration Inspections at Ports of Entry , by Audrey Singer CRS Report R43599, Unaccompanied Alien Children: An Overview , by William A. Kandel CRS Legal Sidebar LSB10121, The President's Authority to Use the National Guard or the Armed Forces to Secure the Border , by Jennifer K. Elsea
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Over the last decade, migration to the United States from Central America—in particular from El Salvador, Guatemala, and Honduras (known collectively as the Northern Triangle)—has increased considerably. Families migrating from this region, many seeking asylum, have made up an increasing share of the migrants seeking admission to the United States at the U.S.-Mexico border. In the past year, news reports of migrant "caravans" from the Northern Triangle traveling toward the United States have sparked intense interest and questions from Congress. Many factors, both in their countries of origin and elsewhere, contribute to people's decisions to emigrate from the Northern Triangle. Weak institutions and corrupt government officials, chronic poverty, rising levels of crime, and demand for illicit drugs result in insecurity and citizens' low levels of confidence in government institutions. These "push" factors intersect with "pull" factors attracting migrants to the United States, including economic and educational opportunities and a desire to reunify with family members. Addressing these factors is complex. Under the U.S. Strategy for Engagement in Central America, the United States is working with Central American governments to promote economic prosperity, improve security, and strengthen governance in the region. Since 2014, Mexico has helped the United States manage flows of Central American migrants, including a recent decision to allow certain U.S.-bound asylum seekers to remain in Mexico while awaiting U.S. immigration proceedings. The United Nations High Commissioner for Refugees (UNHCR)—in collaboration with local and federal governments and civil society—is providing immediate and longer-term support for Mexico's refugee agency and migrants in transit. Central Americans who wish to request asylum in the United States may do so at a U.S. port of entry before a Customs and Border Protection (CBP) officer or upon apprehension by a CBP officer between U.S. ports of entry. Those requesting asylum at the border undergo screening to determine whether they can pursue an asylum claim. To receive asylum, a foreign national must establish, among other requirements, that he or she is unable or unwilling to return to his or her home country because of past persecution or a well-founded fear of future persecution based on one of five protected grounds (race, religion, nationality, membership in a particular social group, or political opinion). In 2018, President Trump, the Department of Homeland Security (DHS), and the Department of Justice (DOJ) took various actions to tighten the U.S. asylum system. These actions have been met with legal challenges. For example, on November 9, 2018, the President issued a presidential proclamation to suspend immediately the entry into the United States of aliens who cross the Southwest border between ports of entry. This proclamation and a related DHS-DOJ rule are being challenged in federal court. Chapter 15, Title 10 of the U.S. Code provides general legislative authority for the Armed Forces to provide certain types of support to federal, state, and local law enforcement agencies. In October 2018, active-duty personnel were deployed to the Southwest border to provide assistance in air and ground transportation, logistics support, engineering capabilities and equipment, medical support, housing, and planning support. The Posse Comitatus Act constrains the manner in which military personnel may be used in a law enforcement capacity at the border. President Trump has contemplated proclaiming a national emergency pursuant to the National Emergencies Act (NEA) in order to fund a physical barrier at the southern border with Mexico using DOD funds. Congress provided the President with significant discretion to reduce foreign assistance to Central America in FY2018, dependent on the governments of El Salvador, Guatemala, and Honduras addressing a variety of congressional concerns, including improving border security, combating corruption, and protecting human rights. The President's ability to modify assistance to the Northern Triangle for the remainder of FY2019 will depend on provisions Congress may include in future appropriations legislation.
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The consumer data industry collects and subsequently provides information to firms about behavior when consumers conduct various financial transactions. Firms use this data to determine whether consumers have engaged i n behaviors that could be costly or beneficial to the firms. For example, lenders rely upon credit reports and scoring systems to determine the likelihood that prospective borrowers will repay their loans. The data may also be used to predict consumer behaviors that would financially benefit firms. Although the general public is likely to be more familiar with the use of credit reporting and scoring to qualify for mortgage and other consumer loans, the scope of consumer data use is much broader. Insured depository institutions (i.e., banks and credit unions) rely on consumer data service providers to determine whether to make checking accounts or loans available to individuals. Insurance companies use consumer data to determine what insurance products to make available and to set policy premiums. Some payday lenders use data regarding the management of checking accounts and payment of telecommunications bills to determine the likelihood that a consumer will fail to repay small-dollar cash advances. Merchants rely on the consumer data industry to determine whether to approve payment by check or electronic payment card. Employers may use consumer data information to screen prospective employees to determine, for example, the likelihood of fraudulent behavior. In short, numerous firms rely upon consumer data to identify and evaluate the risks associated with entering into financial relationships or transactions with consumers. Greater reliance by firms on consumer data significantly affects consumer access to financial products or opportunities. For example, negative or derogatory information, such as multiple overdrafts, involuntary account closures, loan defaults, and fraud incidents, may influence a lender to deny a consumer access to credit. Further, such information may stay on a consumer's reports for several years. The inclusion of negative information may be particularly limiting to consumers under circumstances in which such information is inaccurate or needs to be updated to reflect more current and possibly more favorable financial situations. Furthermore, consumers may find the process of making corrections to consumer data reports to be time-consuming, complex, and perhaps ineffective. The exclusion of more favorable information, such as the timely repayment of noncredit obligations, from standard credit reporting or scoring models may also limit credit access. This report first provides background information on the consumer data industry and various specialty areas. The report examines one prominent specialty area—consumer scoring—and describes various factors used to calculate credit scores. Next, the report provides a general description of the current regulatory framework of the consumer data industry. Finally, the report discusses selected policy issues pertaining to consumer data reports. Specifically, the report addresses policy issues concerning inaccurate or disputed consumer data provided in consumer data reports; how long negative or derogatory information should remain in consumer data reports; differences in billing and collection practices that can adversely affect consumer data reports, an issue of particular concern with medical billing practices; consumer's rights; whether uses of credit bureau data outside of the financial services, such as for employment decisions, adversely affect consumers and should be limited; whether the use of alternative consumer data or newer versions of credit scores may increase accuracy and credit access; and how to address data protection and security issues in consumer data reporting. For each policy issue, the report addresses corresponding legislative and regulatory developments. In the 116 th Congress, credit reporting and the consumer data industry is a topic of interest. On February 26, 2019, the House Financial Services Committee held a hearing on the consumer data industry, entitled, " Who ' s Keeping Score? Holding Credit Bureaus Accountable and Repairing a Broken System ." House Financial Services Committee Chairwoman Maxine Waters has also released two draft bills: the Comprehensive Credit Reporting Reform Act of 2019 (CCRRA) and the Protecting Innocent Consumers Affected by a Shutdown Act, which, if enacted, would address many of the policy issues discussed in this report. Where relevant, the report discusses the approach these bills would take to addressing the policy issues examined. This section provides background information on the consumer data industry, which generally includes credit reporting agencies (CRAs), also referred to as credit bureaus (both terms are used interchangeably in this report). This section also provides background on credit scoring, a specialty service the industry provides, including a summary of the key factors known to affect credit scores. According to the Fair Credit Reporting Act (FCRA), which generally regulates the business of credit reporting, CRAs are firms that prepare consumer reports based upon individuals' financial transactions history data. Such data may include historical information about credit repayment, tenant payment, employment, insurance claims, arrests, bankruptcies, and check writing and account management. Consumer files, however, do not contain information on consumer income or assets. Consumer reports generally may not include information on items such as race or ethnicity, religious or political preference, or medical history. Equifax, Experian, and TransUnion are the three largest nationwide providers of credit reports. Other CRAs provide a variety of specialized consumer reporting services. Some specialty CRAs collect data regarding payment for phone, utilities (e.g., electric, gas, water), and telecommunication (e.g., cable) services. Utility and telecommunication service providers use the reports to verify the identity of customers and determine downpayment requirements for new customers. Property management companies and rent payment services may report to CRAs that specialize in collecting rent payment data for tenant and employment screening. Some CRAs specialize in consumer reporting for the underbanked, near prime, and subprime consumer segments, including consumers with minimal recorded data. Some CRAs specialize in debt collection (recovering past due funds) and fraud verification data. Firms that use consumer reports may also report information to CRAs, thus serving as furnishers . A tradeline is an account attached to a particular consumer that is reported to a CRA by a furnisher. A tradeline serves as a record of the transaction (payment) activity associated with the account. Furnishing tradelines is voluntary, and furnishers are not required to submit tradelines to all CRAs. Furnishers also have different business models and policies, resulting in different reporting practices. Some furnishers may report all unpaid customer obligations that were deemed uncollectible and written off their balance sheets; some report when money balances owed surpass minimum threshold levels; some report only the principal balances owed minus the penalties and fees; and others may report all monies owed. Furnishers also have discretion over the types of obligations they wish to report. Benefits to users of consumer data increase as more individual companies choose to participate as furnishers, but furnishers do incur costs to report data. To become furnishers, firms must be approved and comply with the policies of a CRA, such as fee registration requirements. The transfer of consumer data involves security risks, and many CRAs have adopted standardized reporting formats and requirements approved by the Consumer Data Industry Association (CDIA) for transferring data. Furnishers must be able to comply with industry data transfer requirements or some CRAs are unlikely to accept their data. Compliance may require investing in technology compatible with the computer systems of a CRA. Compliance costs may be more burdensome for smaller firms, causing some to choose not to be furnishers. In addition, entities that elect to become furnishers face legal obligations under the FCRA. The FCRA requires furnishers to report accurate and complete information as well as to investigate consumer disputes. Hence, reporting obligations could possibly, under some circumstances, result in legal costs, which may also influence a firm's decision to become a furnisher. Business models and policies of CRAs are also different. Different CRAs may collect the same information on the same individuals but adopt different conventions for storing the information. One CRA may report a delinquent debt obligation separately from the penalties and fees whereas another CRA may choose to combine both items into one entry. Consequently, consumer reports obtained from different CRAs on the same consumer are likely to differ due to different policies adopted by furnishers, CRAs, or both. A consumer score is a (numeric) metric that can be used to predict a variety of financial behaviors. Consumer credit scores are prepared for lenders to determine, for example, the likelihood of loan default. Other consumer scores can be prepared to predict the likelihood of filing an insurance claim, overdrawing a bank account, failing to pay a utility bill, committing fraud, or a host of other adverse financial behaviors. Consumer scores are typically computed using the information obtained from one or more consumer reports. Rather than maintaining a repository of credit records, some firms are primarily engaged in the production of consumer scores. Hence, consumer scoring can be considered a specialty service in the consumer data industry. For example, if a user of a consumer report subsequently wants a consumer score, it may be charged an additional fee. Given the variety of different financial behaviors to predict, there are many consumer scores that can be calculated. Consumer scores for the same individual and behavior calculated by different scoring firms are also likely to differ. Consumer scoring firms may have purchased consumer information from different CRAs, which have their own policies for storing and reporting information. Each scoring firm has its own proprietary statistical model(s), meaning that each firm decides what consumer information should be included and excluded from calculations. Each firm can choose its own weighting algorithms. For example, included information can be equally weighted, or heavier weights can be placed on more recent information or on information otherwise deemed more pertinent. Sometimes the consumer scoring firm selects the appropriate weighting scheme, and sometimes the requestor of a consumer score may provide instructions to the preparer. Hence, consumers may not see the actual scores used until after the decisionmaking firms release them, particularly in cases when customized scores were requested and used in the decisionmaking process. This section provides a brief overview of existing consumer protections and regulation related to credit reporting. As noted, the Fair Credit Reporting Act, enacted in 1970, is the main statute regulating the credit reporting industry. The FCRA requires "that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information." The FCRA establishes consumers' rights in relation to their credit reports, as well as permissible uses of credit reports. It also imposes certain responsibilities on those who collect, furnish, and use the information contained in consumers' credit reports. The FCRA includes consumer protection provisions. Under the FCRA, consumers must be told when their information from a CRA has been used after an adverse action (generally a denial of credit) has occurred, and disclosure of that information must be made free of charge. Consumers have a right to one free credit report every year (from each of the three largest nationwide credit reporting providers) even in the absence of an adverse action (e.g., credit denial). Consumers also have the right to dispute inaccurate or incomplete information in their report. After a consumer alerts a CRA of such a discrepancy, the CRA must investigate and correct errors, usually within 30 days. The FCRA also limits the length of time negative information may remain on reports. Negative collection tradelines typically stay on credit reports for 7 years, even if the consumer pays in full the item in collection; a tradeline associated with a personal bankruptcy stays on a credit report for 10 years. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) established the Bureau of Consumer Financial Protection (CFPB), consolidating many federal consumer financial protection powers from other federal agencies. The CFPB has rulemaking and enforcement authorities over all CRAs for certain consumer protection laws; it has supervisory authority, or the authority to conduct examinations, over the larger CRAs. In July 2012, the CFPB announced that it would supervise CRAs with $7 million or more in annual receipts, which included 30 firms representing approximately 94% of the market. The CFPB conducts examinations of the CRAs, reviewing procedures and operating systems regarding the management of consumer data and enforcing applicable laws. In 2017, the CFPB released a report of its supervisory work in the credit reporting system. The report discusses the CFPB's efforts to work with credit bureaus and financial firms to improve credit reporting in three specific areas: data accuracy, dispute handling and resolution, and furnisher reporting. As the report describes, credit bureaus and financial firms have developed data governance and quality control programs to monitor data accuracy through working with the CFPB. In addition, the CFPB has encouraged credit bureaus to improve their dispute and resolution processes, including making it easier and more informative for consumers. Recently, Congress has also been interested in improving consumer protections in the credit reporting system, particularly in response to the 2017 Equifax data breach, which exposed personal information of millions of consumers. The Economic Growth, Regulatory Relief, and Consumer Protection Act ( P.L. 115-174 ), which was enacted in 2018, established new consumer protections relating to credit reporting, including the right to a free credit freeze. Credit freezes allow consumers to stop new credit from being opened in their name, to protect themselves from fraud and identity theft. This section examines selected policy issues pertaining to the use of credit reports and scores in consumer lending decisions. For each policy issue, the report highlights recent legislative and regulatory developments and discusses selected legislative proposals from the 116 th Congress that would address the issue. The accuracy of consumer information in consumer data reports has been an ongoing policy concern. Inaccurate information in a credit report may limit a consumer's access to credit in some cases or increase the costs to the consumer of obtaining credit in others. In 2012, the Federal Trade Commission (FTC) reported that 26% of participants in a survey of credit report accuracy were able to identify at least one potentially material error on at least one of approximately three different credit reports prepared using their consumer information. After the reports were corrected, 13% of participants in the FTC study saw one or more of their credit scores increase. For those who saw an increase, over 40% of their scores rose by more than 20 points, which could increase the likelihood that the consumer would be offered less expensive credit terms. Credit reporting inaccuracies may occur for various reasons. Consumers may inadvertently provide inaccurate data when applying for financial services. Furnishers may inadvertently input inaccurate information into their databases. Matching information to the proper individual poses challenges, such as in cases when multiple individuals have similar names and spellings. In some cases, the information may be properly matched, but the individual could be a victim of fraud or identity theft. The predictive power of consumer data, or the ability to accurately predict a consumer's likelihood to default on a loan, would be enhanced to the extent that consumer tradelines are regularly updated with correct and current information. As mentioned in the previous section, the CFPB has recently encouraged credit bureaus and financial firms to improve data accuracy in credit reporting. For example, since 2014, the CFPB has required the largest consumer reporting firms to provide standardized accuracy reports on a regular basis. The accuracy reports must specify the frequency that consumers dispute information, list furnishers and industries with the most disputes, and provide dispute resolution information. According to the CFPB, the top 100 furnishers provide 76% of tradeline information to the largest nationwide CRAs, and the furnishers regularly update the account status of reported tradelines. In addition, the larger CRAs have also made improvements to the communication tool they use to facilitate the dispute resolution process between consumers and furnishers. Further, effective July 1, 2017, the CRAs enhanced public record data standards for the collection and timely updating of civil judgements and tax liens. Public record data must contain minimum identifying information (i.e., name, address, and Social Security number or date of birth) and must be updated at least every 90 days; otherwise, the tax lien and civil judgment information will no longer be reported. The accuracy of credit reports, nonetheless, ultimately depends upon consumers to monitor and dispute any discrepancies. If enacted, Chairwoman Waters' draft bill—the Comprehensive Credit Reporting Reform Act of 2019 (CCRRA)—would address some concerns relating to inaccurate or disputed data by establishing new consumer rights around the dispute process. These rights would include guaranteeing consumers more information about dispute investigations and granting consumers the right to appeal disputes to credit bureaus, thus formalizing the process. The CCRRA also would explicitly establish consumers' right to seek injunctive relief, a legal remedy where a court requires future behavior change (e.g., removing adverse information from a credit record). Lastly, the bill would provide credit restoration to consumers who are the victims of some predatory activities, such as deceptive lender acts or discrimination. Policymakers have also considered the appropriate length of time negative information should be allowed to remain on a credit report. Negative information generally refers to delinquencies or defaults, which typically remain on credit reports for seven years. Negative information in a credit report often results in a consumer appearing to pose a greater risk of default or other negative behavior. This may lead a consumer to either pay more for financial services or, in some cases, be denied access to credit entirely. Limiting a consumer's access to certain financial services, such as depository checking accounts or lower cost loans, may disproportionately affect the consumer's cost of engaging in financial transactions. Similarly, the use of consumer data reports by potential employers, discussed further below, may limit job opportunities that could arguably help applicants overcome financial challenges and thereby improve their credit histories. Retaining negative information on credit reports for an extended period of time may pose benefits and detriments. On the one hand, under circumstances in which the underlying information in a consumer data report is inaccurate or out of date, consumers may improperly be considered to pose a greater risk to a firm. In that case, the consumer may be offered costlier credit options (or even face denials of credit) that do not accurately reflect the consumer's actual risk of default. In other cases, consumers also may unfairly be considered to pose a greater risk now due to circumstances in the past that they have since overcome. On the other hand, the longer information remains on the credit report arguably allows lenders to see long-term trends that may be helpful for distinguishing between a rare occurrence and a consistent pattern in a consumer's behavior. Shorter or insufficient periods of time in which negative tradelines appear on consumer reports may also compromise the ability to compute reliable scores. If lenders view credit reports and scores as unreliable due to premature removal of negative information, they could increase downpayment requirements across the board for all credit applicants or reduce loan amounts. In short, lenders who are uncertain about data reliability might adopt stricter underwriting and lending policies. In addition to restricting credit access generally, this could reduce competition by allowing lenders with an established relationship and more information on a consumer to provide more favorable terms to that consumer than other companies. In addition, the Association of Certified Fraud Examiners (ACFE) found that poor credit can signal criminal activity, and earlier removal of negative information may make it more difficult for an organization to detect fraud, which may be particularly costly for small businesses and nonprofit organizations. Many preparers and users of credit scores have adopted weighting schemes that place less weight on older information in a consumer data report. Maintaining longer (rather than shorter) durations of negative tradelines on reports allows preparers to make greater use of variable-weighted algorithms to calculate scores, which may be useful when the importance of a weight needs to be modified over time. In addressing this policy issue, the CCRRA would shorten the time period that adverse information could remain on a person's credit report by three years (such that it remains on the report for a total of four years), among other things. Another policy issue that often arises in connection with credit reporting is that different holders of consumer debt bill differently and report to the CRAs differently. Inconsistent reporting practices result in variation of the timing with which unpaid debts appear on consumer reports. For example, medical providers may assign unpaid bills to debt collectors or sell outstanding debts to debt buyers. Some medical providers may assign or sell the debt after 60 days, but some may do so after 30 days (by comparison, most bank credit card delinquencies are assigned or sold after 180 days). Some firms may turn obligations over to collections as a tool to encourage consumers to settle unpaid balances, blurring the distinction between billing and collecting policies. Debt collectors or buyers subsequently furnish negative information to CRAs, causing tradeline accounts to appear on consumer reports. The CFPB used a random sample of approximately 5 million consumers as of December 2012 to determine what types of tradeline accounts were reported most frequently and the amounts. The CFPB found that approximately 33% of credit reports surveyed had collection tradelines, and approximately 52% of those collection tradelines were related to medical collections. After medical obligations, the CFPB found that the remaining collection tradelines of significant relevance were associated with unclassified debts (17.3%), cable or cellular bills (8.2%), utilities (7.3%), and retail stores (7.2%). All other categories of collectible tradelines were approximately 2% or less of the survey. For 85% of the respondents, the amounts owed for medical debt were for less than $1,000. In short, more than half of collection tradelines were associated with medical debt, and they were for relatively small amounts. Specifically, the median amount owed for the medical collection tradelines was $207, and 75% of all medical collection tradelines were under $490. One form of consumer debt—medical debt—is most often disputed by consumers and raises specific policy issues related to inconsistent billing and reporting practices. According to the CFPB study, consumers are unlikely to know when and how much various medical services cost in advance, particularly those associated with accidents and emergencies. People often have difficulty understanding co-pays and health insurance deductibles. Consequently, consumers may delay paying medical obligations as they either assume their insurance companies will pay or attempt to figure out why they have been billed, which often results in medical debt appearing unpaid on credit reports. Regulators and industry have taken actions that may reduce medical tradelines and their associated negative effects on consumer credit data. On December 31, 2014, the Internal Revenue Service (IRS) announced a final rule requiring the separation of billing and collection policies of nonprofit hospitals. Under the rule, hospitals that have or are pursuing tax-exempt status are required to make reasonable efforts to determine whether their patients are eligible for financial assistance before engaging in "extraordinary collection actions," which may include turning a debt over to a collection agency (thus creating a medical tradeline) or garnishing wages. In short, tax-exempt hospitals must allow patients 120 days from the date of the first billing statement to pay the obligation before initiating collection procedures. The IRS rule only impacts nonprofit hospitals, but, on September 15, 2017, the three major credit reporting agencies—Experian, Equifax, and TransUnion—established a 180-day (6 month) waiting period before posting a medical collection of any type on a consumer credit report. In addition, P.L. 115-174 , Section 302, amends the FCRA to provide credit reporting protections for veterans as follows: CRAs must exclude certain medical debt incurred by a veteran from his or her credit report if the hospital care or medical services relating to the debt predates the credit report by less than one year. CRAs must remove from the credit report a veteran's fully paid or settled medical debt previously characterized as delinquent, charged off, or in collection. CRAs must establish a dispute process and verification procedures for veterans' medical debt. Active duty military personnel receive free credit monitoring. The CCRRA would impose restrictions on the appearance of medical collections on consumer credit reports, codifying the CRA's 2017 180-day rule. It would also require expedited removal of all fully repaid or settled debts, including medical collections. Consumers sometimes find it difficult to advocate for themselves when credit reporting issues arise because they are not aware of their rights and how to exercise them. According to a CFPB report, some consumers are confused about what credit reports and scores are, find it challenging to obtain credit reports and scores, and struggle to understand the contents of their credit reports. The CFPB receives more credit reporting complaints than complaints in any other industry it regulates. Currently, the CFPB provides financial education resources on its website to help educate consumers about their rights regarding consumer reporting. The credit bureaus' websites also provide information about how to dispute inaccurate information, and consumers can contact them by phone or mail. The CCRRA proposes that CRAs provide free credit scores and explanations of those scores to consumers in their annual free credit report. In addition, consumers would be entitled to these free credit reports at other times, for example, whenever they apply for a new mortgage, auto loan, or student loan, or if a consumer's identity is stolen. The report and score used to make underwriting decisions in connection with these events would be provided to the consumer. The CCRRA also would direct the credit bureaus to give consumers more information on dispute rights, and it would require hard inquires to be limited for a longer 120-day shopping window for certain consumer credit products (as described in the box "Some Factors Frequently Used to Calculate Credit Scores" above). Policy questions exist regarding the appropriate uses of credit bureau data, particularly for uses outside of extending credit to consumers. For example, credit information can be used for employment decisions. According to the Society for Human Resource Management (a human resources professional society), in 2012, almost half of surveyed organizations in their membership used credit background checks on some of their job applications. Employers report that they use this information to reduce the likelihood of employee theft or embezzlement and to reduce legal liability for negligent hiring. To comply with the FCRA, employers must inform an applicant that his or her credit report is a part of a hiring decision, and acquire the applicant's written permission to obtain the report. If an applicant is denied a job, or if the employer takes another adverse action due to information on a credit report, then the applicant must be given a copy of the report and a summary of their FCRA rights. Whether the use of credit information in employment decisions unnecessarily harms prospective job applicants is debatable. For some occupations, past financial difficulties may increase the likelihood, for example, that the employee could be bribed or compromised in some way; however, this information may not be essential for success in all occupations. Currently, many states limit employers' use of credit information for employment decisions. The CCRRA would ban the use of credit information for employment decisions, unless required by law or for a national security investigation. The CFPB estimates that credit scores cannot be generated for approximately 20% of the U.S. population due to their limited credit histories. The CFPB distinguishes between different types of consumers with limited credit histories. One category of consumers, referred to as credit invisibles , have no credit record at the three largest credit bureaus and, thus, do not exist for the purposes of credit reporting. According to the CFPB, this group represents 11.0% of the U.S. adult population, or 26 million consumers. Another category of consumers do exist (have a credit record), but they still cannot be scored or are considered non scorable . Nonscorable consumers either have insufficient (short) histories or outdated (stale) histories. The insufficient and stale unscored groups, each containing more than 9 million individuals, collectively represent 8.3% of the U.S. adult population, or approximately 19 million consumers according to the CFPB. Younger adults may be part of the credit invisible or nonscorable population because they lack a sufficient credit history. As consumers get older, however, the problem of being credit invisible or belonging to the insufficient part of the nonscorable group typically declines, but may begin to reoccur after the age of 60. Older adults, who may have considerably reduced their credit usage, perhaps as they prepare to enter retirement years, may encounter the problem of having stale credit records. Because credit scoring models vary by firms, consumers that cannot be scored by some models might still have the ability to be scored by other models; thus, the state of being nonscorable may depend upon the credit reporting data records and scoring models used. Borrowers with missing or impaired credit histories may be able to improve their ability to get reliable credit scores by using credit building loans, such as secured credit cards that require either security deposits as collateral for the amount of the line of credit or links to checking or savings accounts, thereby allowing lenders to recover funds if payments are missed. The security deposit is refunded if borrowers do not miss payments. Secured credit card lending can help borrowers build or repair their credit histories, assuming that the more favorable customer payment activity is reported to credit bureaus. In addition, the use of alternative credit scores may also help the credit invisibles because other types of consumer payment activity (discussed below) may be predictive in regard to how borrowers would manage credit. In short, options that increase the ability to calculate scores for the invisible or currently nonscoreable consumer groups could allow lenders to better determine the quantity and scope of financial relationships they can establish with such groups. A lternative credit scoring models could potentially increase accuracy by including additional information beyond that which is traditionally included in a credit report. For example, some credit score models do not distinguish between unpaid and paid (resolved) tradelines. Most credit scores are calculated without utility and rent payments information. Arguably, including this information would benefit the credit scores for some individuals with limited or no credit histories, potentially increasing their access to—and lowering their costs of—credit. Conversely, information about medical debts has often been included in credit scores, but the unevenness in medical reporting, as previously discussed, and possibly the consumers' lack of choice in incurring medical debt raises questions about whether medical debt tradelines should be considered reliable predictors of creditworthiness or credit performance. For this reason, some newer versions of credit scoring apply less weight to medical debt. In short, developing credit scores with new information might allow lenders to find new creditworthy consumers. Regulators and Congress have considered the potential for alternative credit scoring. In 2014, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac—the government-sponsored enterprises (GSEs) that purchase mortgages in the secondary market—to consider using more updated credit scoring models in their mortgage underwriting. Under P.L. 115-174 , FHFA is required to define, through rulemaking, the standards and criteria the GSEs will use for validating credit score models used when evaluating whether to purchase a residential mortgage. If enacted, the CCRRA would direct the CFPB to report to Congress on the impact of using nontraditional data on credit scoring. Full implementation of newer versions of credit scoring models, however, may not occur quickly. In the mortgage market, upgrading automated underwriting systems is costly for the GSEs, FHA, and loan originators. Not all originators will choose to update their automated underwriting systems. Even if alternative credit scoring models were widely adopted, the credit score is not the only variable considered during the underwriting process. Just as several factors are included in the development of a credit score, a credit score is only one of several factors included in an automated underwriting model (also referred to as an underwriting scorecard). The debt-to-income ratio, for example, may still be an important variable for mortgage underwriting. Higher levels of medical and student loan debts may still affect mortgage underwriting decisions. Hence, the use of alternative credit scores may help some borrowers close to a threshold or borderline, yet still not translate into significant changes in credit access across the board. Congressional interest in data protection and security in the consumer data industry has increased following the announcement, on September 7, 2017, of the Equifax cybersecurity breach that potentially revealed sensitive consumer data information for 143 million U.S. consumers. CRAs are subject to the data protection requirements of Section 501(b) of the Gramm-Leach-Bliley Act (GLBA). Section 501(b) requires the federal financial institution regulators to "establish appropriate standards for the financial institutions subject to their jurisdiction relating to administrative, technical, and physical safeguard—(1) to insure the security and confidentiality of consumer records and information; (2) to protect against any anticipated threats or hazards to the security or integrity of such records; and (3) to protect against unauthorized access or use of such records or information which could result in substantial harm or inconvenience to any customer." The CFPB does not have the authority to prescribe regulations with regard to safeguarding the security and confidentiality of customer records. Instead, the FTC has the authority to enforce Section 501(b) as the federal functional regulator of nonbank financial institutions, including CRAs. The FTC has promulgated rules implementing the GLBA requirement. Because the FTC has little upfront supervisory or enforcement authority, the agency typically must rely upon its enforcement authority after an incident has occurred. In the 116 th Congress, bills such as H.R. 331 and H.R. 1282 would direct the FTC to ensure sufficient standards for safeguarding consumer information, including for the credit bureaus and data furnishers. In addition, in March 2019, a Government Accountability Office report became public that recommended actions for the FTC, the CFPB, and Congress to strengthen oversight of credit bureaus' data security. Meanwhile, P.L. 115-174 , Section 301, requires credit bureaus to provide fraud alerts for consumer files for at least a year under certain circumstances. In addition, credit bureaus must provide consumers with one free freeze alert and one free unfreeze alert per year. The law also established further requirements to protect minors. Currently, many credit bureaus provide consumers services such as credit monitoring for identity theft victims. In general, credit bureaus charge fees for these services, paid for by either a consumer or private company after a data breach incident. The CCRRA would expand protections for identity theft victims, including the right to free credit monitoring and identity theft services. It would require the CFPB to create new regulations to define the parameters for these new consumer benefits, including how long they should be provided and what services should be included.
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The consumer data industry—generally referred to as credit reporting agencies or credit bureaus—collects and subsequently provides information to firms about the behavior of consumers when they participate in various financial transactions. Firms use consumer information to screen for the risk that consumers will engage in behaviors that are costly for businesses. For example, lenders rely upon credit reports and scores to determine the likelihood that prospective borrowers will repay their loans. Insured depository institutions (i.e., banks and credit unions) rely on consumer data service providers to determine whether to make available checking accounts or loans to individuals. Some insurance companies use consumer data to determine what insurance products to make available and to set policy premiums. Some payday lenders use data regarding the management of checking accounts and payment of telecommunications and utility bills to determine the likelihood of failure to repay small-dollar cash advances. Merchants rely on the consumer data industry to determine whether to approve payment by check or electronic payment card. Employers may use consumer data information to screen prospective employees to determine the likelihood of fraudulent behavior. In short, numerous firms rely upon consumer data to identify and evaluate potential risks a consumer may pose before entering into a financial relationship with that consumer. Greater reliance by firms on consumer data significantly affects—and potentially limits—consumer access to financial products or opportunities. Specifically, negative or derogatory information, such as late payments, loan defaults, and multiple overdrafts, may stay on consumer reports for several years and lead firms to deny a consumer access to credit, a financial product, or a job opportunity. Having a nonexistent, insufficient, or a stale credit history may also prevent credit access. Accordingly, various policy issues have been raised about the consumer data industry, most notably including the following: How to address inaccurate or disputed consumer data provided in consumer data reports; How long negative or derogatory information should remain in consumer data reports; How to address differences in billing and collection practices that can adversely affect consumer data reports, an issue of particular concern with medical billing practices; How to ensure that consumers are aware of their rights and how to exercise them in the event of a consumer data dispute; Whether uses of consumer data reports outside of the financial services, such as for employment decisions, adversely affect consumers and should be limited; Whether the use of alternative consumer data or newer versions of credit scores may increase accuracy and credit access; and How to address data protection and security issues in consumer data reporting. Congress has shown continuing interest in these and other policy questions surrounding the consumer data industry, particularly in its regulation and whether such regulation currently provides sufficient protection to consumers. In the 116th Congress, legislation has been introduced to address many of these concerns. The Comprehensive Credit Reporting Reform Act of 2019 (CCRRA) and the Protecting Innocent Consumers Affected by a Shutdown Act, both released as drafts by Chairwoman Maxine Waters, would amend the Fair Credit Reporting Act (FCRA) and create additional laws to address these concerns. Other relevant bills introduced in the 116th Congress address topics such as credit reporting and cybersecurity (H.R. 331 and H.R. 1282); credit information used for auto insurance (H.R. 1756); and federal employees affected by the shutdown (H.R. 935, H.R. 799, H.R. 1286, and S. 535).
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The Military Personnel Records division of the National Personnel Records Center (NPRC), a component of the National Archives and Records Administration (NARA) located in St. Louis, Missouri, holds most existing U.S. military personnel, health, and medical records of discharged and deceased veterans of all services from World War I to the present. Neither the NPRC nor the Department of Defense (DOD) intends to destroy the physical records of U.S. servicemembers. Some older records have been electronically scanned to reduce the handling of fragile records. See NARA's site "Access to Military Service and Pension Records" at https://www.archives.gov/research/order/order-vets-records.html . Official Military Personnel File (OMPF) records may be requested online at https://www.archives.gov/veterans/military-service-records , by using the Standard Form 180 and submitting by mail (the appropriate address listed on the back of the form), or fax (314-801-9195). Veterans and their next-of-kin (NOK) may request these records. According to the NPRC, for the Air Force, Navy, Marine Corps, and Coast Guard, the NOK is defined as the unremarried widow or widower, son, daughter, father, mother, brother or sister; for the Army, the NOK is defined as the surviving spouse, eldest child, father or mother, eldest sibling or eldest grandchild. If an individual does not meet the definition of a NOK, he or she is considered a member of the general public and may request military personnel records via the Freedom of Information Act (FOIA). See "Access to OMPFs for the General Public" at https://www.archives.gov/st-louis/military-personnel/public/general-public.html . In 1973, a fire at NPRC destroyed approximately 16 million to 18 million Army and Air Force official military personnel files. In such cases where files were lost, NPRC uses alternate sources of information to respond to requests. More information about obtaining military personnel files can be found on the NPRC website, http://www.archives.gov/st-louis/military-personnel/ , or by contacting the center at National Personnel Records Center Military Personnel Records 1 Archives Drive St. Louis, MO 63138 Tel: [phone number scrubbed] congressional line Tel: [phone number scrubbed] public line Status Update Request Form: https://www.archives.gov/st-louis/forms Older military personnel records (generally prior to 1917) are located at National Archives and Records Administration (NARA) Textual Archives Division Washington, DC 20408 http://www.archives.gov/veterans/military-service-records/pre-ww-1-records.html For guidance on the review of discharges and military corrections boards, see NARA's " Veterans' Service Records: Correcting Military Service Records " . For i nformation on the military service review boards (Air Force, Army, Coast Guard, and Navy and Marine Corps) , see " Boards for Correction of Military Records (BCMR) / Discharge Upgrades " site. NARA's site also provides the following BCMR guidance: " Prior to submitting a request to a Board for Correction of Military Records, ALL administrative avenues must be used. Generally, that means a request to NPRC for a correction (minor corrections can be made by NPRC), then a request to the military service department (service departments can make more corrections than NPRC), and finally if both these fail, then submit DD Form 149, with supporting evidence as instructed on the form ." The NPRC also provides information and guidance on how to request military awards and decorations online and by mail for veterans and their NOK; replacing certain military medals; and obtaining a Cold War Recognition Certificate. This is available for the records of a servicemember who separated before or during 1956. For records for individuals who separated after 1956, these records can be requested through FOIA. The general public may also purchase a copy of the veteran's OMPF to determine the awards due and obtain the medals from a commercial source. Individuals can request information on military service medals, decorations and awards online: https://www.archives.gov/personnel-records-center/awards-and-decorations . By military service (Army, Navy, Marine Corps, and Air Force including Army Air Corps & Army Air Forces) via mail: National Personnel Records Center 1 Archives Drive St. Louis, MO 63138 For Coast Guard: Coast Guard Personnel Service Center 4200 Wilson Blvd., Suite 900 (PSC-PSD-MA) Stop 7200 Arlington, VA 20598-7200 The National Defense Authorization Act (NDAA) for Fiscal Year 1998 ( P.L. 105-85 ) in Section 1084 required the Secretary of Defense to prepare a certificate recognizing the Cold War service of qualifying members of the Armed Forces and civilian personnel of DOD and other government agencies contributing to national security. This certificate, known as the "Cold War Recognition Certificate," may be awarded upon individual request to all members of the Armed Forces and qualified federal government civilian personnel who served the United States during the Cold War era from September 2, 1945, to December 26, 1991. The Modern Military Records office of NARA has custody of records relating to World War I, World War II, Korea, and Vietnam. The records vary by conflict and branch of service; for example, the records for Army units active during the interwar periods (1920-1939 and 1945-1950) are incomplete. For more information, contact the Textual Records office at Textual Records Office National Archives and Records Administration at College Park 8601 Adelphi Road College Park, MD 20740-6001 Tel: [phone number scrubbed] Email: [email address scrubbed] If a military unit record is not publicly available, a FOIA request may be submitted to the agency where the record is held. For example, for special access records held at the National Archives at College Park, contact the Archives FOIA office at the following: Special Access and FOIA Division National Archives at College Park 8601 Adelphi Road College Park, MD 20740-6001 Tel: [phone number scrubbed] Email: [email address scrubbed] For more information on how to submit a FOIA request, visit https://www.foia.gov/how-to.html . Other types of auxiliary and organizational records, including Army morning reports, Army unit rosters, Army officer pay cards, Navy muster rolls, U.S. Army Surgeon General's office records and Veterans Administration index cards are maintained at the National Archives in St. Louis, Missouri. Further information regarding these records, as well as the timespan of available records for each category, are available at http://www.archives.gov/st-louis/archival-programs/other-records/index.html . Certain published unit histories can also be found in the collections of the military departments (see Table 1 ). To support disability claims of exposure to hazardous materials (Agent Orange, asbestos, etc.), numerous veterans are culling through Army morning reports, unit rosters, pay cards, Navy muster rolls, Captain logs/Navy Deck logs, etc. during their military service. For more information on military exposures, see the VA's Military Exposure site: https://www.publichealth.va.gov/exposures/index.asp . At this time, VA continues to study the long-term health issues of deployed veterans and their exposure to burn pits used at military waste sites in Iraq and Afghanistan. Currently, there is no compensation available for exposure to burn pits. For more information, see the VA's Public Health site on Burn Pits at https://www.publichealth.va.gov/exposures/burnpits/ and related CRS products on VA health care and disability in the sources below. CRS Report R41386, Veterans' Benefits: Burial Benefits and National Cemeteries , by Scott D. Szymendera CRS Report R42324, Who Is a "Veteran"?—Basic Eligibility for Veterans' Benefits , by Scott D. Szymendera CRS Report R42747, Health Care for Veterans: Answers to Frequently Asked Questions , by Sidath Viranga Panangala CRS Report R44837, Benefits for Service-Disabled Veterans , by Benjamin Collins, Scott D. Szymendera, and Libby Perl CRS Report 95-519, Medal of Honor: History and Issues , by Barbara Salazar Torreon CRS Report R42704, The Purple Heart: Background and Issues for Congress , by Barbara Salazar Torreon CRS Report RS21405, U.S. Periods of War and Dates of Recent Conflicts , by Barbara Salazar Torreon American Battle Monuments Commission (ABMC) at http://www.abmc.gov The website contains databases of veterans interred or memorialized at overseas American military cemeteries and memorials. The Civil War Soldiers and Sailors System, National Park Service https://www.nps.gov/civilwar/soldiers-and-sailors-database.htm This website contains a database of the men who served in the Union and Confederate armies during the Civil War, as well as information on regiment histories, significant battles, and some prisoner-of-w ar records and cemetery records. Confederate States of America (CSA) Records at the Library of Congress https://www.loc.gov/collections/confederate-states-of-america-records/about-this-collection/ The records of the C SA span the years 1854-1889, with the bulk of the material concentrated in the period 1861-1865, during the Civil War . Provides links to Official Records of the Union and Confederate Armies External ; Official Records of the Union and Confederate Navies External ; and War Department Collection of Confederate Records. Military Resources: Veterans at the National Archives Library Information Center (ALIC) https://www.archives.gov/research/alic/reference/military/veterans-related.html This site provides links to v eterans ' i nformation , m ilitary c asualties , Prisoners of War/Missing in Action (POW/MIAs) , and m edals & h onors . Philippine Army and Guerilla Records at the National Archives http://www.archives.gov/st-louis/military-personnel/philippine-army-records.html The collection includes records of the Philippine Commonwealth Army of the United States Armed Forces Far East (USAFFE), including recognized Philippine Guerrilla forces ( not the Army of the United States or Philippine Scouts) during World War II. Veterans History Project (VHP) at the Library of Congress at http://www.loc.gov/vets/ VHP collects, preserves, and makes accessible the personal accounts of American veterans. Veterans Affairs (VA) Nationwide Gravesite Locator at http://gravelocator.cem.va.gov/ The database contains burial locations of veterans and their family members. Beers, Henry Putney. The Confederacy: A Guide to the Archives of the Government of the Confederate States of America . Washington, DC: National Archives and Records Administration, 1998. Borch, Fred L. For Military Merit: Recipients of the Purple Heart . Annapolis, MD: Naval Institute Press, 2010. Center of Military History. Order of Battle of the United States Land Force s in the World War. Washington, DC: Center of Military History, U.S. Army, 1988. 3 volumes. Controvich, James T. United States Army U nit and Organizational H istories: A B ibliography . Lanham, MD: Scarecrow Press, 2003. —— United States Air Force and I ts A ntecedents: P ublished and P rinted U nit H istories, a B ibliography . Lanham, MD: Scarecrow Press, 2004. Dinackus, Thomas D. Order of Battle: Allied Ground Forces of Operation Desert Storm. Central Point, OR: Hellgate Press, 2000. Dornbusch, C. E. Military Bibliography of the Civil War. New York: New York Public Library, 1971. Dyer, Frederick H. A Compendium of the War of the Rebellion. New York: T. Yoseloff, 1959. Johnson, Lt. Col. Richard S., and Debra Johnson Knox. How to Locate Anyone Who Is or Has Been in the Military: Armed Forces Locator Guide. Spartanburg, SC: MIE Publishing, 1999. Owens, Ron. Medal of Honor: Historical Facts and Figures. Paducah, KY: Turner Publishing Company, 2004. Plante, Trevor K. Military Service Records at the National Archives. Washington, DC: National Archives and Records Administration, 2009. Stanton, Shelby L. World War II O rder of B attle, U.S. Army ( G round F orce U nits ) . Mechanicsburg, PA: Stackpole Books, 2006. —— Vietnam Order of Battle. Mechanicsburg, PA: Stackpole Books, 2003. U.S. Department of the Army. Office of Military History. Order of Battle of the United States Army Ground Forces in World War II, Pacific Theater of Operations: Administrative and Logistical Commands, Armies, Corps, and Divisions. Washington, DC: Department of the Army, 1959. U.S. Naval War Records Office. Official Records of the Union and Confederate Navies in the War of the Rebellion. Harrisburg, PA: National Historical Society, 1987. 30 v. U.S. War Department. The War of the Rebellion: A Compilation of the Official Records of the Union and Confederate Armies . Washington, DC: GPO, 1880-1901. 70 v.
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This guide provides information on locating military unit histories and individual service records of discharged, retired, and deceased military personnel. It also provides information on locating and replacing military awards and medals. Included is contact information for military history centers, websites for additional sources of research, and a bibliography of other publications, including related CRS reports.
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On a daily basis, the restaurants, cafeterias, and carryout facilities operated by the House of Representatives and the Senate serve Members of Congress, congressional employees, constituents, and other visitors to the Capitol, House office buildings, and Senate office buildings. The House and Senate restaurant systems have existed since the early 1800s and have grown and modernized over time. Although many of their services may seem similar, food operations are separately administered and managed for the House, for the Senate, and for the Capitol Visitor Center (CVC). By meeting congressional dining needs during workdays that frequently can be unpredictable, the restaurant systems help facilitate the legislative and representational work of Congress. Because many Members and staff visit these restaurants every day, they remain a subject of ongoing congressional interest. Since 1994, the House restaurants have been operated by a private vendor, with oversight provided by the House. Under the Rules of the House of Representatives, the House restaurants fall under the jurisdiction of the Committee on House Administration, which delegates much of the daily oversight and financial management of the restaurant system to the Chief Administrative Officer (CAO) of the House. On June 9, 2015, the CAO announced that Sodexo Government Services would be the new food service provider for the House. The contract with Sodexo is for an initial term of four years. Starting in 2019, six two-year options may extend the contract for up to 12 additional years. A comprehensive survey of House food service needs, based on analysis of restaurant records, and the experiences of secret shoppers, focus groups, and surveys, had been commissioned during fall 2013 to help inform the vendor selection process. The CAO issued a request for proposals (RFP) for vendors interested in running any or all of the House restaurants in October 2014. Prospective contractors were notified that "the House will have no financial responsibility or liability under the terms of the contract," and that the contractor selected would pay the House a monthly commission, determined by an agreed-upon percentage of gross receipts. The CAO encouraged ideas from vendors to improve operations in the Members' dining room and also initiated service schedule changes. Food service providers would not be required to operate the Members' dining room when late votes were scheduled in the evenings, on weekends, or on holidays, and instead, the room would be available for hosting catered events. To address some of the suggestions from the 2013 food service study, the RFP required that contractors include three-tier pricing strategies (value, standard, and premium) for all areas except vending. Once prices were set, any price increases would be prohibited for the first two years of service. Vendors were also required to introduce a minimum of two branded eatery concepts that would suit the needs of House customers. Catering requirements and responsibilities for different locations in the Capitol and office buildings were detailed, and the new contractor would be expected to "successfully execute events with less than four (4) hours' notice." The new contractor would be required to conduct at least one formal focus group per year to help ensure long-term customer satisfaction and was encouraged to "utilize a variety of assessment tools" to appraise customer service. Individuals from outside of the CAO's office were included on the panel that reviewed and evaluated vendor proposals, and the panel also included a staff member from a Member office. To aid in the service transition, once Sodexo was chosen as the new vendor, it designated a community relations officer, a position unique to its House operation, to help address comments and resolve problems raised by House dining patrons. It is not publicly known whether or not the past provider, Restaurant Associates, submitted a bid to renew its contract. Sodexo assumed its responsibilities as the House vendor on August 7, 2015, and immediately began renovations and other changes related to the transition, some of which continued in 2016. Currently, 10 dining areas and carryouts in the House of Representatives and the House office buildings are operated by Sodexo as part of the House food services. Additionally, Sodexo is responsible for in-house catering services and most vending machines for the House. Sodexo introduced SoGo Cards, a new form of payment, for House staff to use in the House cafeterias. The cards are available at the cash registers of the dining facilities, can be reloaded with funds online, and provide a reward program regular customers may enroll in. All the House food service facilities, including the vending machines, are required to accept all major credit and debit cards, and many vending machines also accept Apple Pay and Google Pay. Additional "pop-up" lunch options in the O'Neill House Office Building main lobby operate through a partnership with Fooda on certain weekdays, featuring foods from local restaurants. The facilities operated under the House restaurant system are listed in Table 1 . With the arrival of Sodexo in 2015, the CAO announced several major changes to House dining operations, including the following: For lunch and dinner, the Members' dining room would replace a la carte service with a buffet. The introduction of an online system that allows users to preorder their food items and pick them up in the Longworth Cafeteria. The replacement of some eateries with popular branded restaurant concepts. Members of the House Appropriations Subcommittee on Legislative Branch expressed continuing concerns about food quality, high prices, and poor service in the House restaurants under Sodexo during the House of Representatives FY2018 budget hearing in May 2017. At the hearing, the CAO stated that a quality assurance surveillance team, comprised of five CAO employees, had been created to continually appraise contractor performance in a number of areas. According to the CAO, observations and feedback from the surveillance team during its first two months had led to some improvements in food quality and changes in restaurant management personnel. A new chef was brought in to the Members' dining room and some table service was reintroduced in response to feedback. Several branded restaurant concepts have been introduced to the House dining facilities, beginning with a Dunkin' Donuts/Baskin Robbins in the Longworth House Office Building and a Subway in the Rayburn House Office Building, which opened in 2016. In January 2018, a food service survey conducted within the House community by the CAO "indicated a strong desire for both cafeteria and branded food options," and the legislative branch conference report for FY2019 "encourage[d] the CAO to continue exploring opportunities to add more [branded concepts]" throughout the House restaurant system. Beginning in 2018, "pop-up restaurants" have been featured on a weekly basis in the Longworth cafeteria, offering food options from branded restaurant chains. Three additional branded concepts have opened or are scheduled to open in the House during 2019: an &pizza in Rayburn, an Au Bon Pain in Cannon, and a Steak 'n Shake in Rayburn. The FY2019 legislative branch appropriations conference report also directed the CAO to explore applying a "branded option concept" to the Members' dining room "in an effort to provide consistent service, better food selection, and quality food to Members and their guests." Beginning in September 2018, the Members' dining room also began providing service to congressional employees. Since 2008, food services in the Senate have been provided by a private contractor, under the jurisdiction of the AOC and subject to policy directives from the Committee on Rules and Administration. Rule XXV of the Standing Rules of the Senate grants the committee authority over "Services to the Senate, including the Senate restaurant." The food service vendor selected for the Senate in 2008 was Restaurant Associates, part of Compass Group, which was selected again under a new seven-year contract, signed December 18, 2015. A 2016 Department of Labor investigation revealed wage-related infractions that could lead to contract renegotiations sooner than 2022. Under current arrangements, additional food vendors may be subcontracted to provide some Senate restaurant services. In 2012, for example, requests to bring kosher meals to the Dirksen cafeterias were ultimately fulfilled by Bubbie's Gourmet; the decision was authorized by the Senate Rules and Administration Committee, and Restaurant Associates was responsible for selecting the subcontractor and overseeing its operations. In 2001, a coffee shop and cafe owned by a local family, Cups & Company, opened in the Russell Senate Office Building and remains independently operated. In the Senate and its office buildings, 12 dining areas and carryouts are operated as a part of the Senate Restaurant System, along with additional vending areas. The facilities included in the Senate Restaurant System are listed in Table 2 . Restaurant Associates also provides in-house catering services, including a "Café to Go" option that can serve groups of 40 or less with advance notice of 24 hours. Some of the issues affecting the restaurant systems are unique to the House and others are unique to the Senate, resulting from the fact that each chamber administers its own restaurant services. Other issues affect the restaurants in both chambers or are typical challenges in any food service operation. This section focuses on current issues related to the congressional restaurants, but many of the challenges the House and Senate restaurants face today are similar to issues they have faced in the past. For more background on these topics, see CRS Report R44600, History of House and Senate Restaurants: Context for Current Operations and Issues , by Sarah J. Eckman. Throughout history, the House and Senate restaurants have faced financial challenges. In part, this is a consequence of the operating practices adopted by the House and Senate restaurants tending to reflect the needs of Congress, even when these choices sometimes hurt the ability of the restaurants to break even. This approach illustrates the view that the restaurants should operate as a necessary service rather than a profit-generating enterprise—a perspective that originated with the earliest congressional restaurants in an underdeveloped Washington, DC, and persisted long after. Although more dining options exist in the Capitol Hill neighborhood today, the dining facilities in the Capitol and congressional office buildings often remain a more convenient option for Members, staff, and visitors. The operating hours of the House and Senate restaurants are one factor that, historically, have contributed to their financial challenges. The House and Senate restaurants, for example, operate primarily for breakfast and lunch service during weekdays, whereas some claim that typical restaurants often rely on dinner service and weekend customers to generate much of their revenue. The cost of labor associated with staffing the restaurants during nonpeak operating hours has often been a significant expense for the restaurant systems. While the restaurants were under congressional management during much of the 20 th century, their finances were particularly affected by legislative measures that established the wages and benefits of federal or congressional employees. Some dining establishments in each chamber have been consistently more profitable than others. Eateries that serve a smaller number of patrons, close when Congress is out of session, or offer full table service can be more expensive to operate. Over the years, the restaurant systems have sometimes operated at a net loss; in other years, revenue from catering or the cafeterias can help offset losses from other establishments to help the overall system break even or make a profit. Obtaining a complete picture of the House and Senate restaurant system finances has always been difficult, given that restaurant responsibilities have often been distributed across multiple actors. When the House and Senate managed their own restaurants, multiple congressional entities were involved in the restaurants' operation, which created challenges for obtaining a complete financial picture. Since the restaurants have been run by private contractors, many business records are not subject to the same public disclosure requirements that government entities would be. This ambiguity has sometimes led to incomplete reports about restaurant finances. The House and Senate restaurants today receive commission-based fees from the food service providers, but more detail is unavailable, since most of the financial records regarding the restaurants are maintained by the vendors and are not publicly accessible. Attempts to improve House and Senate restaurant finances over the years have frequently involved food price increases. Many of these price increases have been minimal adjustments required to keep up with increasing costs of food, energy, and labor, while others have been larger adjustments. Sometimes, the relatively small increase to revenue from price increases has not been sufficient to completely offset increased expenses. Contract agreements with vendors sometimes prohibit price increases for a specified amount of time, which can make it difficult for vendors to adjust and compensate for unexpected increases in their operating expenses. Thus, when price changes do occur, the restaurants are often adjusting for several years of increased costs, which can appear as a large jump to customers. In the transition to Sodexo in the House during 2015, for example, the CAO acknowledged that prices on many menu items would increase, explaining that while prices on many items will increase when the new contract takes effect, no price increases have been approved in House food service facilities over the past six years. Bidders were required to propose pricing comparable to similar government and corporate food service facilities. The new contract limits any future increases to changes in a subset of the Producer Price Index, with a three percent annual cap. Complaints about restaurant prices have persisted over the history of the restaurant systems, and the 2013 study of dining operations in the House suggested that many customers, particularly staff and visitors, remain price-conscious. When possible, customers may be willing to trade the convenience of on-site services for off-site alternatives if the dining options in the Capitol complex are not perceived as good values. In addition to reasonable prices, the House and Senate restaurants are expected to meet other customer standards, often related to food quality, nutrition, and variety. Food service vendors, through their experience in the broader restaurant industry, are often aware of current consumer interests, and the House and Senate restaurants solicit customer feedback to help ascertain what needs and values their particular customers have. When the current vendor, Sodexo, was selected for the House restaurants, the CAO acknowledged that providing quick dining options was a main priority for the restaurant service, although the quality of food, nutrition, and customer service were also considerations. The requirement for two branded restaurant concepts also reflected customer preferences. On its website for Senate dining, Restaurant Associates has, at times, highlighted its initiatives in "sustainability as well as social and environmental responsibility." These include its efforts to provide organic food, locally produced food, sustainable seafood, cage-free eggs, and no trans-fats. To continue to meet expectations for food quality and safety, efficiency in service, and customer satisfaction, dining facilities may require more frequent updates and renovations than other areas within the Capitol complex. Many of the most significant changes to the restaurant facilities occur during or soon after the transition to a new restaurant system vendor, but upgrades to equipment may be an ongoing concern. The age of the rooms that house dining services may present additional construction challenges and safety concerns. In January 2016, for example, the Longworth Cafeteria was evacuated and temporarily closed after several employees reported feeling ill from possible exposure to lead paint dust stirred up by ongoing nighttime kitchen renovations. In addition to periodic updates to the restaurants themselves, large-scale renovations are sometimes necessary to improve and maintain the Capitol, House, and Senate facilities. Any closures to particular buildings can have an impact on House and Senate restaurant services, which are spread throughout these locations. The closure of a cafeteria with a full kitchen may require additional resources for other cafeterias, or a greater reliance on prepackaged food items prepared elsewhere in the restaurant system or off-site. The Cannon Renewal Project, for example, necessitated the closure of the Cannon Café in December 2014, and it was replaced with a convenience store, Cannon Twelve, which is expected to operate until the renovation is complete. The Longworth Cafeteria operated under limited hours and periodically closed while major renovations were undertaken between July and November of 2016. Because many customers value convenience, the temporary reorganization of congressional office space due to renovations may also shift demand for cafeterias or carryouts from one building to another. The degree to which Congress can and should be involved in the daily management of the House and Senate restaurants is a question that has persisted over time. Both chambers currently use private food service vendors to run the day-to-day operations of the restaurants, while retaining general authority for oversight of the restaurant systems. This, however, has not always been the case; the House operated its own restaurants as recently as 1994, and the Senate operated its own restaurants until 2008. The reasons given in support of congressional management or private management have varied over time and often overlap, as each side has claimed that its approach would be financially advantageous, benefit employees, and improve the quality of food services provided. Those who have advocated for private management note that modern restaurant systems are larger and more complex than many of the internal operations managed by the House or the Senate. Food service requires consistent quality, safety, and efficiency, and some believe professional contractors familiar with the business of running large institutional restaurants are better able to achieve these objectives. Those who have supported congressional management, however, believe that each chamber has sufficient administrative means to operate the restaurants, and that Congress better understands the unique needs of the House and Senate restaurant systems and the constraints under which they operate. Private management may also raise oversight challenges for Congress if company financial records are not made available for review. Some Members have expressed concerns that contractors do not have to follow the same guidelines for personnel or procurement that the federal government does, even though the restaurants operate within the Capitol complex. Issues related to employee wages and benefits affected the House and Senate restaurants during the 114 th Congress (2015-2016). A new contract for the House restaurants went into effect in August 2015, and a new contract for the Senate restaurants went into effect in December 2015. This created an opportunity for employees and others to advocate for changes, including higher wages for all restaurant employees and union representation for Senate restaurant employees, that they hoped to see before the terms of the new agreements were settled upon in each chamber. A summary of these recent events and ongoing concerns is below. Wages for House restaurant employees are a concern expressed by some House Members. While the search for a new vendor was underway in 2015, Representative Debbie Wasserman Schultz proposed an amendment during the committee markup of the FY2016 Legislative Branch Appropriations Bill that would affect House restaurant employee wages. The proposal "directed the [CAO] to solicit and select a food service contractor who provides a livable wage to its employees to meet basic needs for food and shelter," using local economic indices to determine an appropriate wage amount. In a 21-29 vote, the amendment was not agreed to. The CAO noted that its office shares the "understandable desire to ensure that the people who provide services to the House are compensated fairly," and indicated that the new House vendor was chosen, in part, based on "the signals that Sodexo sent regarding the value it places on a strong, effective, fairly compensated workforce." When Sodexo took over the House restaurants in August 2015, it announced plans to voluntarily follow the D.C. Displaced Workers Protection Act of 1994, which guaranteed that no employees would be laid off for at least 90 days after the contractor change. Sodexo also agreed to recognize the restaurant employees' union, UNITE HERE Local 23, and signed a collective bargaining agreement. Many provisions in the collective bargaining agreement with Sodexo remain similar to those that applied to the previous House vendor, Restaurant Associates, including the pay scale, annual and sick leave, health insurance, short-term disability benefits, life insurance, and union pension. Workers who received higher wages or benefit levels based on their service under past House restaurant employer agreements continue to receive these levels. Sodexo provided starting wages for new employees ranging from $10.15 to $19.00 an hour, with a $0.20 per hour increase scheduled for June 1, 2016, and an additional $0.25 per hour increase to follow on December 1, 2016. Additionally, Sodexo offers House Restaurant System employees the option to enroll in a 401(k) plan and will match $0.35 of every dollar an employee contributes, up to 6% of the employee's earnings. Concerns have been raised about wages and benefits for Senate restaurant employees. A number of protests and advocacy initiatives occurred during late 2014 and throughout 2015 addressing pay and union representation for Senate restaurant employees. On April 22, 2015, approximately 40 Senate contract workers, some of whom were restaurant employees, participated in what was characterized as a strike with other workers and activists, calling for an executive order giving preference to federal contractors who would provide an hourly wage of at least $15 for their workers. Other labor action occurred during the summer and fall months, and an additional strike occurred on December 8, 2015. In addition to higher wages, some Senate restaurant employees also sought to form a union. Some Senators indicated their support for the restaurant employees' concerns. On April 27, 2015, nine Senators signed a letter to the Senate Rules and Administration Committee, arguing that it was wrong for "American taxpayers [to] subsidize these contractors by allowing them to pay low wages that must be augmented by taxpayer-funded benefits." The Senators also wanted federal contractors to provide healthcare and other benefits. Another letter, reiterating these goals and advocating further executive action to "[make] the government a 'model employer,'" was signed by 18 Senators and sent to the President of the United States on May 15. An additional letter was sent on August 5 to the Rules and Administration Committee, advocating for higher restaurant employee wages, signed by 40 Senators. A group of 34 Senators signed a letter on November 13 to the CEO of Compass Group, the parent company of Restaurant Associates, asking the company to recognize a union if a majority of the restaurant employees wanted to unionize. Some Senators and congressional staffers also participated in the protests and advocacy for restaurant employees, including Wednesday "sit-in" lunches or "brown bag boycotts" throughout the fall in the Dirksen cafeteria. Senate restaurant employees maintained that, given the high costs of living in the Washington, DC, area, a wage increase was needed so they could live above the poverty line and provide for their families. The new seven-year contract with Restaurant Associates went into effect January 2016. It included pay increases, reportedly raising the average hourly wage from $11.50 to $14.50 and the minimum starting wage to $13.30. Workers received additional benefits for health insurance, retirement savings, or transportation amounting to $4.27 per hour. On July 26, 2016, the Department of Labor (DOL) found that Restaurant Associates, and its subcontractor, Personnel Plus, owed $1,008,302 in back wages to 674 Senate restaurant employees. DOL found that many Senate restaurant workers were improperly classified into lower paying job categories and were required to work without compensation prior to their scheduled start times, which also resulted in underestimated overtime pay. This finding has led to renewed calls by some Senators to terminate the Senate's contract with Restaurant Associates. Restaurant Associates stated that the error was due to "administrative technicalities," and that it had paid the workers in full. The DOL investigation began after Good Jobs Nation, an advocacy group, filed a complaint on behalf of the restaurant employees with DOL on January 14, 2016. After the AOC's December 2015 contract with Restaurant Associates went into effect, employees alleged that job misclassification had occurred. Federal contractor worker occupational titles and job descriptions are set forth under the Service Contract Act of 1965, and the contract with Restaurant Associates specified particular minimum wages for different occupational titles in the Senate restaurant system. Employees were supposed to receive raises under the new contract, but if the employee's title changed from a higher-paying position to a lower-paying position when the contract took effect, the employee could receive little or no pay increase. The AOC identified some of the misclassified employees through its own internal investigation in early 2016 and worked with Restaurant Associates to provide back pay for these workers and correct the misclassifications. On March 15, 2016, the AOC spoke at a Senate Appropriations Legislative Branch Subcommittee hearing, noting that "we thought that we were doing a good thing [by including a pay raise in the new contract], only to be surprised just a week or two later ... that the pay rates that we had adjusted to were not being implemented." The AOC also indicated that he believed Restaurant Associates' reclassifications did constitute a violation of the contract terms. A subsequent Government Accountability Office (GAO) review between December 2016 and May 2017 found that "[t]he AOC's oversight of the Senate food services contract with Restaurant Associates has been consistent with its established oversight policies and practices in the AOC contracting manual." In addition to providing back pay to affected employees, DOL reports that Restaurant Associates agreed to retain an independent compliance monitor (at its own expense) and will not bid on any new federal service contracts for two years. DOL also reports that Restaurant Associates "is taking additional proactive steps to ensure future compliance," including the appointment of a compliance manager and compliance supervisors and the creation of a confidential telephone hotline for employees or managers to report issues. In many regards, the House and Senate food services operate like many large, institutional cafeterias do. Similar to many office cafeterias, House and Senate food services primarily serve breakfast, lunch, and snacks during regular workday business hours, and provide vending options for patrons who may be on-site during other times. Recognizing the availability of other dining options, the House and Senate food service providers attempt to provide convenient service, keep their prices competitive, and offer the types of menu items that customers enjoy. Some aspects of House and Senate dining operations, however, are necessarily unique, given the congressional environment in which they exist. The Members' dining rooms, for example, provide an ambiance not typically found in workplace eateries. In addition to their historic and architectural value, these dining rooms also provide Members of Congress and staff members a more formal and private setting in which to meet with guests or one another. Another feature House and Senate dining operations must account for is that the schedule of Congress can be less predictable than that of other institutions, which can have a variety of effects on food services. An unscheduled recess, for example, can significantly reduce the number of customers the House and Senate dining services can expect. This often results in higher costs to the restaurants, which have to account for lost food and sometimes pay employees; as a result, recesses can also lead to temporary worker layoffs or reduced hours. Conversely, when Congress is in session, House and Senate food services must be able to handle high volumes of customers with a variety of needs. Because events like hearings or briefings can be added to, or moved around, the congressional schedule, food service providers, and catering in particular, must to be able to accommodate last-minute requests and changes. The House and Senate restaurants are operated by private food service contractors who handle most of the day-to-day concerns. Despite this delegation, the House and Senate remain responsible for food service oversight. This shared administration resulted from how the congressional restaurant systems developed and grew over time. As a result, many of the issues faced by the restaurants today are addressed by the contractors themselves. Other issues are addressed by the House Administration Committee, Senate Rules and Administration Committee, or other congressional support offices. Together, these entities strive to meet the needs of the Members and staff who rely upon congressional dining services to help them carry out their daily legislative and representational work.
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Dining facilities in the Capitol and in House and Senate office buildings provide an essential convenience for Members of Congress and congressional staff, enabling them to easily obtain meals, beverages, and snacks, and quickly return to work. By providing an efficient way to meet congressional dining needs during unpredictable workdays, the restaurant systems help facilitate the legislative and representational work of Congress. These restaurants also provide spaces for constituents and other visitors to meet with staff and Members of Congress, or to purchase refreshments. House and Senate restaurant services are also available to provide catering to Members of Congress when they host events on Capitol grounds. The restaurants remain a subject of ongoing congressional interest, as many Members and staff visit them on a daily basis. Those involved with restaurant administration in the House and Senate have often considered how management choices affect operating costs, services available, oversight, and other elements of the restaurant systems. For much of their histories, the House and Senate operated their own restaurants, but since 1994 in the House and since 2008 in the Senate, private vendors have run the restaurants. In August 2015, the House entered an agreement with Sodexo to operate the 17 facilities in the House restaurant system, subject to direction from the Chief Administrative Officer (CAO) and the Committee on House Administration. In December 2015, the Senate entered a new contract with Restaurant Associates to operate the 12 facilities in the Senate restaurant system, subject to direction from the Architect of the Capitol (AOC) and the Committee on Rules and Administration. Many argue that this professional restaurant management experience is necessary to meet the variety of customer needs in the House and Senate restaurants in a cost-effective manner. Numerous nearby eateries compete with the congressional restaurants for customers. Often, an advantage the House and Senate restaurants are able to provide is convenience for Members, staff, and visitors. This advantage, however, may be undermined if the restaurants are not responsive to customer input and are unable to provide consistent food quality, sufficient variety, or reasonably priced service, relative to their competitors. Food and price issues, along with other day-to-day operational issues, including personnel matters, are largely the responsibility of the restaurant contractors. Some Members and observers have raised concerns about the degree of accountability for the House and Senate restaurant contractors, believing that the restaurants' administration reflects upon Congress and that the restaurants should set an example for other businesses to follow. Although the House and Senate are responsible for restaurant oversight, the delegation of restaurant operations to private contractors means the chambers have less control over employee wages and benefits, procurement, or other business decisions that affect the restaurant systems. The combination of entities involved in House and Senate dining operations creates a unique organizational arrangement, unlike other institutional dining systems. Other features of Congress also distinguish the House and Senate restaurants from similar-seeming restaurant operations. The restaurants' business volume, for example, is highly contingent on the congressional calendar, consisting of a fairly constant weekday breakfast and lunch business, but experiencing substantial, and sometimes unexpected, decreases if Congress adjourns for a recess. Information specific to the House and Senate restaurant systems may therefore be of particular interest to those concerned with their operations. Additional background and context on House and Senate restaurant operations is found in CRS Report R44600, History of House and Senate Restaurants: Context for Current Operations and Issues, by Sarah J. Eckman.
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The Trump Administration's Nuclear Posture Review, released on February 2, 2018, includes plans for the United States to deploy two new types of nuclear weapons "to enhance the flexibility and responsiveness of U.S. nuclear forces." The report highlights that these weapons represent a response to Russia's deployment of a much larger stockpile of lower-yield nonstrategic nuclear weapons and to Russia's apparent belief "that limited nuclear first use, potentially including low yield weapons" can provide "a coercive advantage in crises and at lower levels of conflict." The two capabilities identified in the NPR are a new low-yield nuclear warhead to be deployed on U.S. long-range submarine-launched ballistic missiles and a new sea-launched cruise missile that could be deployed on Navy ships or attack submarines. The report states that the United States does not need to deploy "non-strategic nuclear capabilities that quantitatively match or mimic Russia's more expansive arsenal." But it indicates that "expanding flexible U.S. nuclear options now, to include low yield options, is important for the preservation of credible deterrence against regional aggression." The NPR's recommended deployment of U.S. nonstrategic nuclear weapons follows growing concerns, both in Congress and among analysts outside of government, about new nuclear challenges facing the United States. For example, In late January 2015, Representatives Mike Rogers and Mike Turner, both members of the House Armed Services Committee, sent a letter to then-Secretary of State John Kerry and then-Secretary of Defense Chuck Hagel, seeking information about the agreements that would be needed and costs that might be incurred if the United States sought to deploy dual-capable aircraft and nuclear bombs at bases on the territories of NATO members in Eastern Europe. Neither NATO, as an organization, nor any of the nations who are members of NATO had called on the United States to pursue such deployments. However, Representatives Rogers and Turner noted that Russian actions in 2014—including aggression against Ukraine, noncompliance with the 1987 INF Treaty, and threats to deploy nuclear weapons in Crimea—threatened European security and warranted a more potent U.S. response. Some analysts outside government have also called for the deployment of greater numbers and/or types of nuclear weapons in Europe in response to Russia's continuing aggression in Ukraine and its apparent increased reliance on nuclear weapons. Others, however, have argued that more nuclear weapons would do little to enhance NATO's security and that NATO would be better served by enhancing its conventional capabilities. This interest in possible new deployments of U.S. nonstrategic, or shorter-range, nuclear weapons differs sharply from previous years, when Members of Congress, while concerned about Russia's larger stockpile of such weapons, seemed more interested in limiting these weapons through arms control than expanding U.S. deployments. During the Senate debate on the 2010 U.S.-Russian Strategic Arms Reduction Treaty (New START), many Members noted that this treaty did not impose any limits on nonstrategic nuclear weapons and that Russia possessed a far greater number of these systems than did the United States. Some expressed particular concerns about the threat that Russian nonstrategic nuclear weapons might pose to U.S. allies in Europe; others argued that these weapons might be vulnerable to theft or sale to nations or groups seeking their own nuclear weapons. In response to these concerns, the Senate, in its Resolution of Ratification on New START, stated that the United States should seek to initiate within one year, "negotiations with the Russian Federation on an agreement to address the disparity between the non-strategic (tactical) nuclear weapons stockpiles of the Russian Federation and of the United States and to secure and reduce tactical nuclear weapons in a verifiable manner." In addition, in the FY2013 Defense Authorization Act ( H.R. 4310 , §1037), Congress again indicated that "the United States should pursue negotiations with the Russian Federation aimed at the reduction of Russian deployed and nondeployed nonstrategic nuclear forces." Although the United States did raise the issue of negotiations on nonstrategic nuclear weapons with Russia within the year after New START entered into force, the two nations have not moved forward with efforts to negotiate limits on these weapons. Russia has expressed little interest in such a negotiation, and has stated that it will not even begin the process until the United States removes its nonstrategic nuclear weapons from bases in Europe. According to U.S. officials, the United States and NATO have been trying to identify and evaluate possible transparency measures and limits that might apply to these weapons. This report provides basic information about U.S. and Russian nonstrategic nuclear weapons. It begins with a brief discussion of how these weapons have appeared in public debates in the past few decades, then summarizes the differences between strategic and nonstrategic nuclear weapons. It then provides some historical background, describing the numbers and types of nonstrategic nuclear weapons deployed by both nations during the Cold War and in the past decade; the policies that guided the deployment and prospective use of these weapons; measures that the two sides have taken to reduce and contain their forces, and the 2018 NPR's recommendation for the deployment of new U.S. nonstrategic nuclear weapons. The report reviews the issues that have been raised with regard to U.S. and Russian nonstrategic nuclear weapons, and summarizes a number of policy options that might be explored by Congress, the United States, Russia, and other nations to address these issues. During the Cold War, nuclear weapons were central to the U.S. strategy of deterring Soviet aggression against the United States and U.S. allies. Toward this end, the United States deployed a wide variety of systems that could carry nuclear warheads. These included nuclear mines; artillery; short-, medium-, and long-range ballistic missiles; cruise missiles; and gravity bombs. The United States deployed these weapons with its troops in the field, aboard aircraft, on surface ships, on submarines, and in fixed, land-based launchers. The United States articulated a complex strategy, and developed detailed operational plans, that would guide the use of these weapons in the event of a conflict with the Soviet Union and its allies. During the Cold War, most public discussions about U.S. and Soviet nuclear weapons—including discussions about perceived imbalances between the two nations' forces and discussions about the possible use of arms control measures to reduce the risk of nuclear war and limit or reduce the numbers of nuclear weapons—focused on long-range, or strategic, nuclear weapons. These include long-range land-based intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles (SLBMs), and heavy bombers that carry cruise missiles or gravity bombs. These were the weapons that the United States and Soviet Union deployed so that they could threaten destruction of central military, industrial, and leadership facilities in the other country—the weapons of global nuclear war. But both nations also deployed thousands of nuclear weapons outside their own territories with their troops in the field. These weapons usually had less explosive power and were deployed with launchers that would deliver them across shorter ranges than strategic nuclear weapons. They were intended for use by troops on the battlefield or within the theater of battle to achieve more limited, or tactical, objectives. These "nonstrategic" nuclear weapons did not completely escape public discussion or arms control debates. Their profile rose in the early 1980s when U.S. plans to deploy new cruise missiles and intermediate-range ballistic missiles in Europe, as a part of NATO's nuclear strategy, ignited large public protests in many NATO nations. Their high profile returned later in the decade when the United States and Soviet Union signed the 1987 Intermediate Range Nuclear Forces (INF) Treaty and eliminated medium- and intermediate-range ballistic and cruise missiles. Then, in 1991, President George Bush and Soviet President Mikhail Gorbachev each announced that they would withdraw from deployment most of their nonstrategic nuclear weapons and eliminate many of them. These 1991 announcements, coming after the abortive coup in Moscow in August 1991, but months before the December 1991 collapse of the Soviet Union, responded to growing concerns about the safety and security of Soviet nuclear weapons at a time of growing political and economic upheaval in that nation. They also allowed the United States to alter its forces in response to easing tensions and the changing international security environment. Consequently, for many in the general public, these initiatives appeared to resolve the problems associated with nonstrategic nuclear weapons. As a result, although the United States and Russia included these weapons in some of their arms control discussions, most of their arms control efforts during the rest of that decade focused on strategic weapons, with efforts made to implement the 1991 Strategic Arms Reduction Treaty (START) and negotiate deeper reductions in strategic nuclear weapons. The lack of public attention did not, however, reflect a total absence of questions or concerns about nonstrategic nuclear weapons. In 1997, President Clinton and Russia's President Boris Yeltsin signed a framework agreement that stated they would address measures related to nonstrategic nuclear weapons in a potential START III Treaty. Further, during the 1990s, outside analysts, officials in the U.S. government, and many Members of Congress raised continuing questions about the safety and security of Russia's remaining nonstrategic nuclear weapons. Congress sought a more detailed accounting of Russia's weapons in legislation passed in the late 1990s. Analysts also questioned the role that these weapons might play in Russia's evolving national security strategy, the rationale for their continued deployment in the U.S. nuclear arsenal, and their relationship to U.S. nuclear nonproliferation policy. The terrorist attacks of September 11, 2001, also reminded people of the catastrophic consequences that might ensue if terrorists were to acquire and use nuclear weapons, with continuing attention focused on the potentially insecure stock of Russian nonstrategic nuclear weapons. The George W. Bush Administration did not adopt an explicit policy of reducing or eliminating nonstrategic nuclear weapons. When it announced the results of its Nuclear Posture Review (NPR) in early 2002, it did not outline any changes to the U.S. deployment of nonstrategic nuclear weapons at bases in Europe; it stated that NATO would address the future of those weapons. Although there was little public discussion of this issue during the Bush Administration, reports indicate that the United States did redeploy and withdraw some of its nonstrategic nuclear weapons from bases in Europe. It made these changes quietly and unilaterally, in response to U.S. and NATO security requirements, without requesting or requiring reciprocity from Russia. The Bush Administration also did not discuss these weapons with Russia during arms control negotiations in 2002. Instead, the Strategic Offensive Reductions Treaty (Moscow Treaty), signed in June 2002, limited only the number of operationally deployed warheads on strategic nuclear weapons. When asked about the absence of these weapons in the Moscow Treaty, then-Secretary of State Colin Powell noted that the treaty was not intended to address these weapons, although the parties could address questions about the safety and security of these weapons during less formal discussions. These discussions, however, never occurred. Nevertheless, Congress remained concerned about the potential risks associated with Russia's continuing deployment of nonstrategic nuclear weapons. The FY2006 Defense Authorization Act ( P.L. 109-163 ) contained two provisions that called for further study on these weapons. Section 1212 mandated that the Secretary of Defense submit a report that would determine whether increased transparency and further reductions in U.S. and Russian nonstrategic nuclear weapons were in the U.S. national security interest; Section 3115 called on the Secretary of Energy to submit a report on what steps the United States might take to bring about progress in improving the accounting for and security of Russia's nonstrategic nuclear weapons. In the 109 th Congress, H.R. 5017 , a bill to ensure implementation of the 9/11 Commission Report recommendations, included a provision (§334) that called on the Secretary of Defense to submit a report that detailed U.S. efforts to encourage Russia to provide a detailed accounting of its force of nonstrategic nuclear weapons. It also would have authorized $5 million for the United States to assist Russia in completing an inventory of these weapons. The 109 th Congress did not address this bill or its components in any detail. In the 110 th Congress, H.R. 1 sought to ensure the implementation of the 9/11 Commission Report recommendations. However, in its final form ( P.L. 110-53 ), it did not include any references to Russia's nonstrategic nuclear weapons. Several events in the past decade have served to elevate the profile of nonstrategic nuclear weapons in debates about the future of U.S. nuclear weapons and arms control policy. For example, in January 2007, four senior statesmen published an article in the Wall Street Journal that highlighted the continuing threat posed by the existence, and proliferation, of nuclear weapons. They called on leaders in nations with nuclear weapons to adopt the goal of seeking a world free of nuclear weapons. After acknowledging that that this was a long-term enterprise, they identified a number of urgent, near-term steps that these nations might take. They included among these steps a call for nations to eliminate "short-range nuclear weapons designed to be forward-deployed." In a subsequent article published in January 2008, they elaborated on this step, calling for "a dialogue, including within NATO and with Russia, on consolidating the nuclear weapons designed for forward deployment to enhance their security, as a first step toward careful accounting for them and their eventual elimination." They noted, specifically, that "these smaller and more portable nuclear weapons are, given their characteristics, inviting acquisition targets for terrorist groups." In addition, as a part of its renewed interest in the role of nuclear weapons in U.S. national security strategy, Congress established, in the FY2008 Defense Authorization Bill ( P.L. 110-181 §1062), a Congressional Commission on the Strategic Posture of the United States. The Congressional Commission, which issued its report in April 2009, briefly addressed the role of nonstrategic nuclear weapons in U.S. national security strategy and noted that these weapons can help the United States assure its allies of the U.S. commitment to their security. It also noted concerns about the imbalance in the numbers of U.S. and Russian nonstrategic nuclear weapons and mentioned that Russia had increased its reliance on these weapons to compensate for weaknesses in its conventional forces. The 110 th Congress also mandated ( P.L. 110-181 , §1070) that the next Administration conduct a new Nuclear Posture Review (NPR). The Obama Administration completed this NPR in early April 2010. This study identified a number of steps the United States would take to reduce the roles and numbers of nuclear weapons in the U.S. arsenal. A few of these steps, including the planned retirement of nuclear-armed, sea-launched cruise missiles, affected U.S. nonstrategic nuclear weapons. At the same time, though, the NPR recognized the role that U.S. nonstrategic nuclear weapons play in assuring U.S. allies of the U.S. commitment to their security. It indicated that the United States would "retain the capability to forward-deploy U.S. nuclear weapons on tactical fighter-bombers" and that the United States would seek to "expand consultations with allies and partners to address how to ensure the credibility and effectiveness of the U.S. extended deterrent. No changes in U.S. extended deterrence capabilities will be made without close consultations with our allies and partners." Discussions about the presence of U.S. nonstrategic nuclear weapons at bases in Europe and their role in NATO's strategy also increased in 2009 and 2010 during the drafting of NATO's most recent strategic concept. Officials in some NATO nations called for the removal of U.S. nonstrategic weapons from bases on the continent, noting that they had no military significance for NATO's security. Others called for the retention of these weapons, arguing that they played a political role in NATO, with shared rights and responsibilities, and that they helped balance Russia's deployment of greater numbers of nonstrategic nuclear weapons. When it was published, the Strategic Concept did not call for the removal of U.S. nonstrategic nuclear weapons. It stated that "deterrence, based on an appropriate mix of nuclear and conventional capabilities, remains a core element of our overall strategy." It also indicated that "the circumstances in which any use of nuclear weapons might have to be contemplated are extremely remote," but indicated that "as long as nuclear weapons exist, NATO will remain a nuclear alliance." It then concluded that NATO would "maintain an appropriate mix of nuclear and conventional forces." NATO nations continue to share responsibility for basing and delivery of the weapons and would weigh in on decisions about their possible use. At the same time, NATO recognized that the new Strategic Concept would not be the last word on the role or presence of nonstrategic nuclear weapons in NATO. In the declaration released at the conclusion of the November 2010 Lisbon Summit, the allies agreed that they would continue to review NATO's overall posture in deterring and defending against the full range of threats to the Alliance. They commissioned a comprehensive Deterrence and Defense Posture Review (DDPR) that would examine the range of capabilities required for defense and deterrence, including nuclear weapons, missile defense, and other means of strategic deterrence and defense. The DDPR was presented at the May 2012 NATO summit in Chicago. It did not, however, recommend any changes in NATO's nuclear posture. Instead, it noted that "nuclear weapons are a core component of NATO's overall capabilities for deterrence and defence," and that "the Alliance's nuclear force posture currently meets the criteria for an effective deterrence and defence posture." NATO reaffirmed this conclusion after its summit in Wales in September 2014, noting that "deterrence, based on an appropriate mix of nuclear, conventional, and missile defence capabilities, remains a core element of our overall strategy." NATO addressed this issue again during its summit in Warsaw in July 2016, and did not alter this conclusion about the value of nuclear weapons to the alliance. Moreover, although the alliance did not call for the deployment of additional nuclear weapons in Europe, the communique released at the end of the summit highlighted the continuing importance of U.S. nuclear weapons deployed in Europe and the nuclear sharing arrangements among the allies. Specifically, the allies reiterated that "as long as nuclear weapons exist, NATO will remain a nuclear alliance" and that "the strategic forces of the Alliance, particularly those of the United States, are the supreme guarantee of the security of the Allies." At the same time, they noted that "NATO's nuclear deterrence posture also relies, in part, on United States' nuclear weapons forward-deployed in Europe and on capabilities and infrastructure provided by Allies concerned." At the same time, NATO has begun to implement numerous initiatives in response to Russia's aggression in Ukraine and aggressive posture toward Europe. While some of these initiatives may strengthen NATO's planning and exercise capabilities, they are unlikely to result in changes in the numbers of deployed nuclear weapons. The 2018 Nuclear Posture Review picks up on many of the same themes highlighted in documents published in the past decade. Like the Strategic Posture Commission Report published in 2009, the NPR highlights the imbalance in the numbers of U.S. and Russian nonstrategic nuclear weapons and states that Russia has increased its reliance on these weapons in its national security strategy. It argues that Russia believes it could use these weapons to coerce the United States and its NATO allies to back down during a conventional conflict in Europe. The 2018 NPR also echoes the Obama Administration's NPR, indicating that the United States will maintain "the capability to forward deploy nuclear bombers and DCA around the world." It also states that the United States will continue Obama-era programs to communicate with and consult allies "on policy, strategy and capabilities." The 2018 NPR also supports of the recent changes in NATO's approach to nuclear modernization and planning, indicating that the United States is "committed to upgrading DCA [dual capable aircraft] with the nuclear-capable F-35 aircraft" and that the United States will "work with NATO to best ensure—and improve where needed—the readiness, survivability, and operational effectiveness of DCA based in Europe." However, while the 2010 NPR called for the retirement of U.S. Tomahawk nuclear-armed sea-launched cruise missiles (TLAMN), the 2018 NPR calls for the development of a new sea-launched cruise missile (SLCM). The 2010 NPR argued that "this system serves a redundant purpose in the U.S. nuclear stockpile" and, although the United States "remains committed to providing a credible extended deterrence posture and capabilities," the "deterrence and assurance roles of TLAMN can be adequately substituted by these other means." The 2018 NPR disputes this conclusion. It states that "the rapid development of a modern SLCM" will address "the increasing need for flexible and low-yield options to strengthen deterrence and assurance" and "will strengthen the effectiveness of the sea-based nuclear deterrence force." The distinction between strategic and nonstrategic (also known as tactical) nuclear weapons reflects the military definitions of, on the one hand, a strategic mission and, on the other hand, the tactical use of nuclear weapons. According to the Department of Defense Dictionary of Military Terms, a strategic mission is Directed against one or more of a selected series of enemy targets with the purpose of progressive destruction and disintegration of the enemy's warmaking capacity and will to make war. Targets include key manufacturing systems, sources of raw material, critical material, stockpiles, power systems, transportation systems, communication facilities, and other such target systems. As opposed to tactical operations, strategic operations are designed to have a long-range rather than immediate effect on the enemy and its military forces. In contrast, the tactical use of nuclear weapons is defined as "the use of nuclear weapons by land, sea, or air forces against opposing forces, supporting installations or facilities, in support of operations that contribute to the accomplishment of a military mission of limited scope, or in support of the military commander's scheme of maneuver, usually limited to the area of military operations." During the Cold War, it was relatively easy to distinguish between strategic and nonstrategic nuclear weapons because each type had different capabilities that were better suited to the different missions. The long-range missiles and heavy bombers deployed on U.S. territory and missiles deployed in ballistic missile submarines had the range and destructive power to attack and destroy military, industrial, and leadership targets central to the Soviet Union's ability to prosecute the war. At the same time, with their large warheads and relatively limited accuracies (at least during the earlier years of the Cold War), these weapons were not suited for attacks associated with tactical or battlefield operations. Nonstrategic nuclear weapons, in contrast, were not suited for strategic missions because they lacked the range to reach targets inside the Soviet Union (or, for Soviet weapons, targets inside the United States). But, because they were often small enough to be deployed with troops in the field or at forward bases, the United States and Soviet Union could have used them to attack targets in the theater of the conflict, or on the battlefield itself, to support more limited military missions. Even during the Cold War, however, the United States and Russia deployed nuclear weapons that defied the standard understanding of the difference between strategic and nonstrategic nuclear weapons. For example, both nations considered weapons based on their own territories that could deliver warheads to the territory of the other nation to be "strategic" because they had the range needed to reach targets inside the other nation's territory. But some early Soviet submarine-launched ballistic missiles had relatively short (i.e., 500 mile) ranges, and the submarines patrolled close to U.S. shores to ensure that the weapons could reach their strategic targets. Conversely, in the 1980s the United States considered sea-launched cruise missiles (SLCMs) deployed on submarines or surface ships to be nonstrategic nuclear weapons. But, if these vessels were deployed close to Soviet borders, these weapons could have destroyed many of the same targets as U.S. strategic nuclear weapons. Similarly, U.S. intermediate-range missiles that were deployed in Europe, which were considered nonstrategic by the United States, could reach central, strategic targets in the Soviet Union. Furthermore, some weapons that had the range to reach "strategic" targets on the territory of the other nations could also deliver tactical nuclear weapons in support of battlefield or tactical operations. Soviet bombers could be equipped with nuclear-armed anti-ship missiles; U.S. bombers could also carry anti-ship weapons and nuclear mines. Hence, the range of the delivery vehicle does not always correlate with the types of targets or objectives associated with the warhead carried on that system. This relationship between range and mission has become even more clouded since the end of the Cold War because the United States and Russia have retired many of the shorter- and medium-range delivery systems considered to be nonstrategic nuclear weapons. Further, both nations could use their longer-range "strategic" systems to deliver warheads to a full range of strategic and tactical targets, even if long-standing traditions and arms control definitions weigh against this change. During the Cold War, the longer-range strategic delivery vehicles also tended to carry warheads with greater yields, or destructive power, than nonstrategic nuclear weapons. Smaller warheads were better suited to nonstrategic weapons because they sought to achieve more limited, discrete objectives on the battlefield than did the larger, strategic nuclear weapons. But this distinction has also dissolved in more modern systems. Many U.S. and Russian heavy bombers can carry weapons of lower yields, and, as accuracies improved for bombs and missiles, warheads with lower yields could achieve the same expected level of destruction that had required larger warheads in early generations of strategic weapons systems. The observable capabilities that allowed analysts to distinguish between strategic and nonstrategic nuclear weapons during the Cold War have not always been precise, and may not prove to be relevant or appropriate in the future. On the other hand, the "strategic" weapons identified by these capabilities—ICBMs, SLBMs, and heavy bombers—are the only systems covered by the limits in strategic offensive arms control agreements—the SALT agreements signed in the 1970s, the START agreements signed in the 1990s, the Moscow Treaty signed in 2002, and the New START Treaty signed in 2010. Consequently, an "easy" dividing line is one that would consider all weapons not covered by strategic arms control treaties as nonstrategic nuclear weapons. This report takes this approach when reviewing the history of U.S. and Soviet/Russian nonstrategic nuclear weapons, and in some cases when discussing remaining stocks of nonstrategic nuclear weapons. The definition by exclusion, although the most common form used in recent discussions, may not prove sufficient when discussing current and future issues associated with these weapons. Since the early 1990s, the United States and Russia have withdrawn from deployment most of their nonstrategic nuclear weapons and eliminated many of the shorter- and medium-range launchers for these weapons (these changes are discussed in more detail below). Nevertheless, both nations maintain roles for these weapons in their national security strategies. Russia has enunciated a national security strategy that allows for the possible use of nuclear weapons in regional contingencies and conflicts near the periphery of Russia. The United States also maintains these capabilities in its nuclear arsenal and does not rule out the possibility that it might need them to deter or defeat potential adversaries. Moreover, the 2018 Nuclear Posture Review, with its plans for the deployment of two new types of nonstrategic weapons, further complicates efforts to identify a single definition. The sea-launched cruise missile clearly meets several definitions of nonstrategic nuclear weapons—it would not have the long range of a strategic system, it would likely have a relatively low-yield warhead, and it would not count under existing treaties limiting strategic offensive weapons. But a new low-yield warhead for submarine-launched ballistic missiles is more complicated. For the NPR, yield seems to be the distinguishing characteristic. But the delivery system—a submarine-launched ballistic missile—is clearly a strategic system, as it has the long range of a strategic delivery vehicle and it is counted within the limits of the New START Treaty. Moreover, missiles with low-yield warheads could be deployed on the same submarines as missiles with higher yield, or strategic, warheads, complicating efforts to distinguish between strategic and nonstrategic SLBMs. Then-Secretary of Defense James Mattis further complicated the discussion during his testimony before the House Armed Services Committee on February 6, 2018, when he stated that he does not believe "there is any such thing as a tactical nuclear weapon. Any nuclear weapon used any time is a strategic game changer." He also resisted using the phrase "nonstrategic" to describe U.S. capabilities, and instead referred to the U.S. ability to deliver a "low-yield" response. While his resistance to the phrases "tactical" and "nonstrategic" seemed to contradict the NPR's widespread use of the phrase "non-strategic nuclear weapons," his response likely reflects a different definition of the dividing line between strategic and nonstrategic nuclear weapons. His comments reflect the view that any use of nuclear weapons would have "strategic effect," possibly meaning that it would expand and escalate the conflict beyond the immediate battlefield. The distinction, therefore, between a strategic and a nonstrategic nuclear weapon could well reflect the nature of the target or the implications for the conflict, not the yield or delivery vehicle of the attacking warhead. Throughout the Cold War, the United States deployed thousands of shorter-range nuclear weapons with U.S. forces based in Europe and Asia and on ships around the world. The United States maintained these deployments to extend deterrence and to defend its allies. Not only did the presence of these weapons (and the presence of U.S. forces, in general) increase the likelihood that the United States would come to the defense of its allies if they were attacked, the weapons also could have been used on the battlefield to slow or stop the advance of the adversaries' conventional forces. In most cases, these weapons were deployed to defend U.S. allies against aggression by the Soviet Union and its Warsaw Pact allies, but the United States did not rule out their possible use in contingencies with other adversaries. In Europe, these weapons were a part of NATO's strategy of "flexible response." Under this strategy, NATO did not insist that it would respond to any type of attack with nuclear weapons, but it maintained the capability to do so and to control escalation if nuclear weapons were used. This approach was intended to convince the Soviet Union and Warsaw Pact that any conflict, even one that began with conventional weapons, could result in nuclear retaliation. As the Cold War drew to a close, NATO acknowledged that it would no longer maintain nuclear weapons to deter or defeat a conventional attack from the Soviet Union and Warsaw Pact because "the threat of a simultaneous, full-scale attack on all of NATO's European fronts has effectively been removed." But NATO documents indicated that these weapons would still play an important political role in NATO's strategy by ensuring "uncertainty in the mind of any potential aggressor about the nature of the Allies' response to military aggression." Throughout the Cold War, the United States often altered the size and structure of its nonstrategic nuclear forces in response to changing capabilities and changing threat assessments. These weapons were deployed at U.S. bases in Asia, and at bases on the territories of several of the NATO allies, contributing to NATO's sense of shared responsibility for the weapons. The United States began to reduce these forces in the late 1970s, with the numbers of operational nonstrategic nuclear warheads declining from more than 7,000 in the mid-1970s to below 6,000 in the 1980s, to fewer than 1,000 by the middle of the 1990s. These reductions occurred, for the most part, because U.S. and NATO officials believed they could maintain deterrence with fewer, but more modern, weapons. For example, when the NATO allies agreed in 1970 that the United States should deploy new intermediate-range nuclear weapons in Europe, they decided to remove 1,000 older nuclear weapons from Europe. And in 1983, in the Montebello Decision, when the NATO defense ministers approved additional weapons modernization plans, they also called for a further reduction of 1,400 nonstrategic nuclear weapons. These modernization programs continued through the 1980s. In his 1988 Annual Report to Congress, Secretary of Defense Caspar Weinberger noted that the United States was completing the deployment of Pershing II intermediate-range ballistic missiles and ground-launched cruise missiles in Europe; modernizing two types of nuclear artillery shells; upgrading the Lance short-range ballistic missile; continuing production of the nuclear-armed version of the Tomahawk sea-launched cruise missile; and developing a new nuclear depth/strike bomb for U.S. naval forces. However, by the end of that decade, as the Warsaw Pact dissolved, the United States had canceled or scaled back all planned modernization programs. In 1987, it also signed the Intermediate-Range Nuclear Forces (INF) Treaty, which eliminated all U.S. and Soviet ground-launched shorter and intermediate-range ballistic and cruise missiles. During the Cold War, the Soviet Union also considered nuclear weapons to be instrumental to its military strategy. Although the Soviet Union had pledged that it would not be the first to use nuclear weapons, most Western observers doubted that it would actually observe this pledge in a conflict. Instead, analysts argue that the Soviet Union had integrated nuclear weapons into its warfighting plans to a much greater degree than the United States. Soviet analysts stressed that these weapons would be useful for both surprise attack and preemptive attack. According to one Russian analyst, the Soviet Union would have used nonstrategic nuclear weapons to conduct strategic operations in the theater of war and to reinforce conventional units in large scale land and sea operations. This would have helped the Soviet Union achieve success in these theaters of war and would have diverted forces of the enemy from Soviet territory. The Soviet Union reportedly began to reduce its emphasis on nuclear warfighting strategies in the mid-1980s, under Soviet President Mikhail Gorbachev. He reportedly believed that the use of nuclear weapons would be catastrophic. Nevertheless, they remained a key tool of deterring and fighting a large-scale conflict with the United States and NATO. The Soviet Union produced and deployed a wide range of delivery vehicles for nonstrategic nuclear weapons. At different times during the period, it deployed devices that were small enough to fit into a suitcase-sized container, nuclear mines, shells for artillery, short-, medium-, and intermediate-range ballistic missiles, short-range air-delivered missiles, and gravity bombs. The Soviet Union deployed these weapons at nearly 600 bases, with some located in Warsaw Pact nations in Eastern Europe, some in the non-Russian republics on the western and southern perimeter of the nation, and throughout Russia. Estimates vary, but many analysts believe that, in 1991, the Soviet Union had more than 20,000 of these weapons. The numbers may have been higher, in the range of 25,000 weapons in earlier years, before the collapse of the Warsaw Pact. In September and October 1991, U.S. President George H. W. Bush and Soviet President Mikhail Gorbachev sharply altered their nations' deployments of nonstrategic nuclear weapons. Each announced unilateral, but reciprocal initiatives that marked the end of many elements of their Cold War nuclear arsenals. On September 27, 1991, U.S. President George H. W. Bush announced that the United States would withdraw all land-based tactical nuclear weapons (those that could travel less than 300 miles) from overseas bases and all sea-based tactical nuclear weapons from U.S. surface ships, submarines, and naval aircraft. Under these measures the United States began dismantling approximately 2,150 warheads from the land-based delivery systems, including 850 warheads for Lance missiles and 1,300 artillery shells. It also withdrew about 500 weapons normally deployed aboard surface ships and submarines, and planned to eliminate around 900 B-57 depth bombs, which had been deployed on land and at sea, and the weapons for land-based naval aircraft. Furthermore, in late 1991, NATO decided to reduce by about half the number of weapons for nuclear-capable aircraft based in Europe, which led to the withdrawal of an additional 700 U.S. air-delivered nuclear weapons. The United States implemented these measures very quickly. Nonstrategic nuclear weapons were removed from bases around the world by mid-1992. The Navy had withdrawn nuclear weapons from its surface ships, submarines, and forward bases by mid-1992. The warhead dismantlement process has moved more slowly, taking most of the 1990s to complete for some weapons, but this was due to the limits on capacity at the Pantex Plant in Texas, where dismantlement occurs. The first Bush Administration decided to withdraw these weapons for several reasons. First, the threat the weapons were to deter—Soviet and Warsaw Pact attacks in Europe—had diminished with the collapse of the Warsaw Pact in 1989. Further, the military utility of the land-based weapons had declined as the Soviet Union pulled its forces eastward, beyond the range of these weapons. The utility of the sea-based weapons had also declined as a result of changes in U.S. warfighting concepts that accompanied the end of the Cold War. Moreover, the withdrawal of the sea-based weapons helped ease a source of tensions between the United States and some allies, such as New Zealand and Japan, who had been uncomfortable with the possible presence of nuclear weapons during port visits by U.S. naval forces. The President's announcement also responded to growing concerns among analysts about the safety and security of Soviet nonstrategic nuclear weapons. The Soviet Union had deployed thousands of these weapons at bases in remote areas of its territory and at bases outside Soviet territory in Eastern Europe. The demise of the Warsaw Pact and political upheaval in Eastern Europe generated concerns about the safety of these weapons. The abortive coup in Moscow in August 1991 had also caused alarms about the strength of central control over nuclear weapons inside the Soviet Union. The U.S. initiative was not contingent on a Soviet response, and the Bush Administration did not consult with Soviet leadership prior to its public announcement, but many hoped that the U.S. initiative would provide President Gorbachev with the incentive to take similar steps to withdraw and eliminate many of his nation's nonstrategic nuclear weapons. On October 5, 1991, Russia's President Gorbachev replied that he, too, would withdraw and eliminate nonstrategic nuclear weapons. He stated that the Soviet Union would destroy all nuclear artillery ammunition and warheads for tactical missiles; remove warheads for nuclear antiaircraft missiles and destroy some of them; destroy all nuclear land mines; and remove all naval nonstrategic weapons from submarines and surface ships and ground-based naval aviation, destroying some of them. Estimates of the numbers of nonstrategic nuclear weapons deployed by the Soviet Union varied, with a range as great as 15,000-21,700 nonstrategic nuclear weapons in the Soviet arsenal in 1991. Consequently, analysts expected these measures to affect several thousand weapons. Russia's President Boris Yeltsin pledged to continue implementing these measures after the Soviet Union collapsed at the end of 1991. He also stated that Russia would destroy many of the warheads removed from nonstrategic nuclear weapons. These included all warheads from short-range missiles, artillery, and atomic demolition devices; one-third of the warheads from sea-based nonstrategic weapons; half of the warheads from air-defense interceptors; and half of the warheads from the Air Force's nonstrategic nuclear weapons. Reports indicate that the Soviet Union had begun removing nonstrategic nuclear weapons from bases outside Soviet territory after the collapse of the Warsaw Pact, and they had probably all been removed from Eastern Europe and the Transcaucasus prior to the 1991 announcements. Nevertheless, President Gorbachev's pledge to withdraw and eliminate many of these weapons spurred their removal from other former Soviet states after the collapse of the Soviet Union. Reports indicate that they had all been removed from the Baltic States and Central Asian republics by the end of 1991, and from Ukraine and Belarus by mid-late spring 1992. The status of nonstrategic nuclear weapons deployed on Russian territory is far less certain. According to some estimates, the naval systems were removed from deployment by the end of 1993, but the Army and Air Force systems remained in the field until 1996 and 1997. Furthermore, Russia has been far slower to eliminate the warheads from these systems than has the United States. Some analysts and experts in the United States have expressed concerns about the slow pace of eliminations in Russia. They note that the continuing existence of these warheads, along with the increasing reliance on nuclear weapons in Russia's national security strategy, indicate that Russia may reverse its pledges and reintroduce nonstrategic nuclear weapons into its deployed forces. Others note that financial constraints could have slowed the elimination of these warheads, or that Russia decided to coordinate the elimination effort with the previously scheduled retirement of older weapons. In U.S. and NATO policy, nonstrategic nuclear weapons have served not only as a deterrent to a wide range of potential aggressors, but also as an important element in NATO's cohesion as an alliance. NATO reaffirmed the importance of nonstrategic nuclear weapons for deterrence and alliance cohesion several times during the 1990s. In the press communiqué released after their November 1995 meeting, the members of NATO's Defense Planning Committee and Nuclear Planning Group stated that "Alliance Solidarity, common commitment, and strategic unity are demonstrated through the current basing of deployable sub-strategic [nuclear] forces in Europe." In 1997, in the Founding Act on Mutual Relations, Cooperation, and Security Between the Russian Federation and the North Atlantic Treaty Organization , NATO members assured Russia that it had "no intention, no plan, and no reason to deploy nuclear weapons on the territory of new members." But NATO also stated that it had no need "to change any aspect of NATO's nuclear policy—and do not foresee any future need to do so [emphasis added]." Finally, the "New Strategic Concept" signed in April 1999 stated that "to protect peace and to prevent war or any kind of coercion, the Alliance will maintain for the foreseeable future an appropriate mix of nuclear and conventional forces. Nuclear weapons make a unique contribution in rendering the risks of aggression against the Alliance incalculable and unacceptable." NATO completed the next review of its Strategic Concept in November 2010. In this document, the allies indicated that "deterrence, based on an appropriate mix of nuclear and conventional capabilities, remains a core element of our overall strategy." The document went on to indicate that NATO would remain a nuclear alliance as long as nuclear weapons continued to exist. It also noted that the alliance would "maintain an appropriate mix of nuclear and conventional forces" to ensure that "NATO has the full range of capabilities to deter and defend against any threat." However, the Strategic Concept did not refer, specifically, to the U.S. nuclear weapons based in Europe, as had the communiqué released in 1995. Instead, the Strategic Concept noted that the "supreme guarantee of the security of the Allies is provided by the strategic nuclear forces of the Alliance, particularly those of the United States [emphasis added]." It went on to indicate that "the independent strategic nuclear forces of the United Kingdom and France, which have a deterrent role of their own, contribute to the overall deterrence and security of the Allies." Moreover, the 2010 Strategic Concept alluded to the possibility of further reductions in nuclear weapons, both within the alliance and globally, in the future. The document noted that the allies are "resolved to seek a safer world for all and to create the conditions for a world without nuclear weapons in accordance with the goals of the Nuclear Non-Proliferation Treaty, in a way that promotes international stability, and is based on the principle of undiminished security for all." It also noted that the alliance had "dramatically reduced the number of nuclear weapons stationed in Europe" and had reduced the role of nuclear weapons in NATO strategy." The allies pledged to "seek to create the conditions for further reductions in the future." The Strategic Concept indicated that the goal in these reductions should be to "seek Russian agreement to increase transparency on its nuclear weapons in Europe and relocate these weapons away from the territory of NATO members." Moreover, the document noted that this arms control process "must take into account the disparity with the greater Russian stockpiles of short-range nuclear weapons." Hence, even though NATO no longer viewed Russia as an adversary, the allies apparently agreed that the disparity in nonstrategic nuclear weapons could create security concerns for some members of the alliance. In recognition of different views about the role or nuclear weapons in alliance policy, the allies agreed that they would continue to review NATO's deterrence and defense posture in a study that would be completed in time for NATO's May 2012 summit in Chicago. They agreed that the Deterrence and Defense Posture Review (DDPR) would examine the full range of capabilities required, including nuclear weapons, missile defense, and other means of strategic deterrence and defense. However, the completed DDPR did not recommend any changes in NATO's nuclear posture. Instead, it noted that "nuclear weapons are a core component of NATO's overall capabilities for deterrence and defence," and that "the Alliance's nuclear force posture currently meets the criteria for an effective deterrence and defence posture." This force posture includes shared rights and responsibilities, with nuclear weapons stored at bases on the territories of five NATO nations, and all NATO nations (except France, which has chosen not to participate in nuclear decisionmaking or operations) participating in nuclear planning and policymaking. Specifically, NATO calls for "the broadest possible participation of Allies in collective defence planning on nuclear roles, in peacetime basing of nuclear forces, and in command, control and consultation arrangements." The DDPR reiterated the alliance's interest in pursuing arms control measures with Russia to address concerns with these weapons. It noted that the allies "look forward to continuing to develop and exchange transparency and confidence-building ideas with the Russian Federation in the NATO-Russia Council, with the goal of developing detailed proposals on and increasing mutual understanding of NATO's and Russia's non-strategic nuclear force postures in Europe." It also indicated that NATO would "consider, in the context of the broader security environment, what [it] would expect to see in the way of reciprocal Russian actions to allow for significant reductions in forward-based non-strategic nuclear weapons assigned to NATO." In other words, any further changes in NATO's nuclear posture were linked to reciprocal changes in Russia's nonstrategic nuclear weapons posture. NATO has continued to review and revise its statements about nuclear weapons during its recent summits in Wales (2014), Warsaw (2016), and Brussels. These summits occurred after Russia's annexation of Crimea and in the shadow of Russia's continuing aggressive behavior in Europe. While most of the efforts announced after these summits sought to bolster NATO's conventional capabilities and demonstrate an enduring commitment to the defense of all NATO allies, some also addressed the role of nuclear weapons and arms control in NATO strategy. For example, Paragraph 51 of the Warsaw Summit Communique confirms that "the greatest responsibility of the Alliance is to protect and defend our territory and our populations against attack ... " and that "no one should doubt NATO's resolve if the security of any of its members were to be threatened." As was noted above, the statement also reaffirmed the important role of nuclear deterrence in alliance security. It indicated that "the strategic forces of the Alliance, particularly those of the United States, are the supreme guarantee of the security of the Allies" and that "the independent strategic nuclear forces of the United Kingdom and France have a deterrent role of their own and contribute to the overall security of the Alliance." Moreover, the allies reaffirmed that "NATO's nuclear deterrence posture also relies, in part, on United States' nuclear weapons forward-deployed in Europe and on capabilities and infrastructure provided by Allies concerned." In addition, in response to concerns about Russian nuclear doctrine, the statement emphasized that "any employment of nuclear weapons against NATO would fundamentally alter the nature of a conflict" and, "if the fundamental security of any of its members were to be threatened however, NATO has the capabilities and resolve to impose costs on an adversary that would be unacceptable and far outweigh the benefits that an adversary could hope to achieve." On the other hand, the Warsaw Summit Communique recognized the strains on the arms control relationship with Russia. Where the 2012 DDPR had called for discussions with Russia on transparency and confidence-building and indicated that NATO would consider negotiating reductions in forward-based forces, the 2016 Warsaw statement simply noted that "arms control, disarmament, and non-proliferation continue to play an important role in the achievement of the Alliance's security objectives." It then stated that, "in this context, it is of paramount importance that disarmament and non-proliferation commitments under existing treaties are honoured ... " and called on "Russia to preserve the viability of the INF Treaty through ensuring full and verifiable compliance." The communique released after the Brussels summit in July 2018 reiterated many of the points raised in previous communiques. In several places, the allies noted that the changing security environment necessitated efforts to bolster the deterrence "as a core element" of the alliance's collective defense and noted that credible deterrence "will continue to be based on an appropriate mix of nuclear, conventional, and missile defence capabilities." It also stated that a "robust deterrence and defence posture strengthens Alliance cohesion and provides an essential political and military transatlantic link, through an equitable and sustainable distribution of roles, responsibilities, and burdens." At the same time, the 2018 communique went further in highlighting the allies' concerns with Russia's violation of the INF Treaty. The communique noted that the INF Treaty "has been crucial to Euro-Atlantic security" and pointed out that "full compliance with the INF Treaty is essential." It supported the U.S. position on Russian noncompliance, noting that the "allies have identified a Russian missile system, the 9M729, which raises serious concerns" and that "a pattern of behaviour and information over many years has led to widespread doubts about Russian compliance." Recent discussions about the U.S. nuclear weapons policy have placed a renewed emphasis on the role of U.S. nonstrategic nuclear weapons in extended deterrence and assurance. Extended deterrence refers to the U.S. threat to use nuclear weapons in response to attacks, from Russia or other adversaries, against allies in NATO and some allies in Asia. Assurance refers to the U.S. promise, made to those same allies, to come to their defense and assistance if they are threatened or attacked. The weapons deployed in Europe are a visible reminder of that commitment; the sea-based nonstrategic nuclear weapons that were in storage that could have been deployed in the Pacific in a crisis served a similar purpose for U.S. allies in Asia. Recent debates, however, have focused on the question of whether a credible U.S. extended deterrent requires that the United States maintain weapons deployed in Europe, and the ability to deploy them in the Pacific, or whether other U.S. military capabilities, including strategic nuclear weapons and conventional forces, may be sufficient. In the 2010 Nuclear Posture Review, the Obama Administration stated that the United States "will continue to assure our allies and partners of our commitment to their security and to demonstrate this commitment not only through words, but also through deeds." The NPR indicated that a wide range of U.S. military capabilities would support this goal, but also indicated that U.S. commitments would "retain a nuclear dimension as long as nuclear threats to U.S. allies and partners remain." The Administration did not, however, specify that the nuclear dimension would be met with nonstrategic nuclear weapons; the full range of U.S. capabilities would likely be available to support and defend U.S. allies. In addition, the Administration announced that the United States would retire the nuclear-armed sea-launched cruise missiles that had helped provide assurances to U.S. allies in Asia. In essence, the Administration concluded that the United States could reassure U.S. allies in Asia, and deter threats to their security, without deploying sea-based cruise missiles to the region in a crisis. Moreover, the possible use of nuclear weapons, and extended nuclear deterrence, were a part of a broader concept that the Obama Administration referred to as "regional security architectures." The 2010 NPR indicated that regional security architectures were a key part of "the U.S. strategy for strengthening regional deterrence while reducing the role and numbers of nuclear weapons." As a result, these architectures would "include effective missile defense, counter-WMD capabilities, conventional power-projection capabilities, and integrated command and control—all underwritten by strong political commitments." In other words, although the United States would continue to extend deterrence to its allies and seek to assure them of the U.S. commitment to their security, it would draw on political commitments and a range of military capabilities to achieve these goals. During the presidential campaign, President Trump questioned the value of U.S. alliance relationships in general and the relevance of NATO in particular. He argued that the United States was overextended around the world and that U.S. allies should contribute more toward their own defense or at least pay more for U.S. security guarantees. Moreover, he suggested that some U.S. allies would be better served if they acquired their own nuclear weapons rather than relying on U.S. nuclear weapons for their defense. These ideas did not translate into policy in the 2018 Nuclear Posture Review. To the contrary, the NPR asserts that the U.S. commitment to NATO and to allies and partners in the Asia-Pacific region "is unwavering." Concerns about the regional threats to U.S. allies in Europe and Asia and about the credibility of U.S. assurances to these allies dominate the analysis in the NPR. However, while the 2010 NPR called for a strengthening of U.S. conventional capabilities and missile defenses as a part of its effort to strengthen extended deterrence, the 2018 NPR focuses almost exclusively on enhancements to U.S. nuclear capabilities. It does not completely dismiss the value of U.S. conventional capabilities, but asserts that "conventional forces alone are inadequate to assure many allies who rightly place enormous value on U.S. extended nuclear deterrence for their security." According to the NPR, these concerns are central to the recommendation that the United States develop two new types of nonstrategic nuclear weapons. In the past, U.S. discussions about nonstrategic nuclear weapons have also addressed questions about the role they might play in deterring or responding to regional contingencies that involved threats from nations that may not be armed with their own nuclear weapons. For example, former Secretary of Defense Perry stated, during the Clinton Administration, that "maintaining U.S. nuclear commitments with NATO, and retaining the ability to deploy nuclear capabilities to meet various regional contingencies , continues to be an important means for deterring aggression, protecting and promoting U.S. interests, reassuring allies and friends, and preventing proliferation (emphasis added)." Specifically, both during the Cold War and after the demise of the Soviet Union, the United States maintained the option to use nuclear weapons in response to attacks with conventional, chemical, or biological weapons. For example, in 1999, Assistant Secretary of Defense Edward Warner testified that "the U.S. capability to deliver an overwhelming, rapid, and devastating military response with the full range of military capabilities will remain the cornerstone of our strategy for deterring rogue nation ballistic missile and WMD proliferation threats. The very existence of U.S. strategic and theater nuclear forces, backed by highly capable conventional forces, should certainly give pause to any rogue leader contemplating the use of WMD against the United States, its overseas deployed forces, or its allies." These statements do not indicate whether nonstrategic nuclear weapons would be used to achieve battlefield or tactical objectives, or whether they would contribute to strategic missions, but it remained evident, throughout the 1990s, that the United States continued to view these weapons as a part of its national security strategy. The George W. Bush Administration also emphasized the possible use of nuclear weapons in regional contingencies in its 2001 Nuclear Posture Review. The Bush Administration appeared to shift toward a somewhat more explicit approach when acknowledging that the United States might use nuclear weapons in response to attacks by nations armed with chemical, biological, and conventional weapons, stating that the United States would develop and deploy those nuclear capabilities that it would need to defeat the capabilities of any potential adversary whether or not it possessed nuclear weapons. This does not, by itself, indicate that the United States would plan to use nonstrategic nuclear weapons. However, many analysts concluded from these and other comments by Bush Administration officials that the United States was planning for the tactical, first use of nuclear weapons. The Bush Administration never confirmed this view, and, instead, indicated that it would not use nuclear weapons in anything other than the most grave of circumstances. The Obama Administration, on the other hand, seemed to foreclose the option of using nuclear weapons in some regional contingencies. Specifically, it stated, in the 2010 NPR, that "the United States will not use or threaten to use nuclear weapons against non-nuclear weapons states that are party to the Nuclear Non-Proliferation Treaty (NPT) and in compliance with their nuclear non-proliferation obligations." Specifically, if such a nation were to attack the United States with conventional, chemical, or biological weapons, the United States would respond with overwhelming conventional force, but it would not threaten to use nuclear weapons if the attacking nation was in compliance with its nuclear nonproliferation obligations and it did not have nuclear weapons of its own. At the same time, though, the NPR stated that any state that used chemical or biological weapons "against the United States or its allies and partners would face the prospect of a devastating conventional military response—and that any individuals responsible for the attack, whether national leaders or military commanders, would be held fully accountable." The 2018 NPR echoes some of this policy from the Obama Administration, but alters it in ways that track more closely with the policy of the Bush Administration. First, the 2018 NPR repeats the paragraph from the 2010 NPR stating that "the United States will not use or threaten to use nuclear weapons against non-nuclear weapons states that are party to the NPT and in compliance with their nuclear non-proliferation obligations." But it then states that "the United States reserves the right to make any adjustment in the assurance that may be warranted by the evolution and proliferation of non-nuclear strategic attack technologies [emphasis added] and U.S. capabilities to counter that threat." Elsewhere in the document the NPR indicates that non-nuclear strategic attacks could include chemical, biological, cyber, and large-scale conventional aggression. Hence, where the Obama Administration left open the possibility of nuclear retaliation in response to biological attacks, but stated that other threats could be deterred by the prospect of a devastating conventional response, the Trump Administration includes a wider range of circumstances where the United States might retaliate with nuclear weapons after an attack. Through the late 1990s and early in George W. Bush Administration, the United States maintained approximately 1,100 nonstrategic nuclear weapons in its active stockpile. Unclassified reports indicate that, of this number, around 500 were air-delivered bombs deployed at bases in Europe. The remainder, including some additional air-delivered bombs and around 320 nuclear-armed sea-launched cruise missiles, were held in storage areas in the United States. After the Clinton Administration's 1994 Nuclear Posture Review, the United States eliminated its ability to return nuclear weapons to U.S. surface ships (it had retained this ability after removing the weapons under the 1991 PNI). It retained, however, its ability to restore cruise missiles to attack submarines, and it did not recommend any changes in the number of air-delivered weapons deployed in Europe. During this time, the United States also consolidated its weapons storage sites for nonstrategic nuclear weapons. It reportedly reduced the number of these facilities "by over 75%" between 1988 and 1994. It eliminated two of its four storage sites for sea-launched cruise missiles, retaining only one facility on each coast of the United States. It also reduced the number of bases in Europe that store nuclear weapons from over 125 bases in the mid-1980s to 10 bases, in seven countries, by 2000. The Bush Administration did not recommend any changes for U.S. nonstrategic nuclear weapons after completing its Nuclear Posture Review in 2001. Reports indicate that it decided to retain the capability to restore cruise missiles to attack submarines because of their ability to deploy, in secret, anywhere on the globe in time of crisis. The NPR also did not recommend any changes to the deployment of nonstrategic nuclear weapons in Europe, leaving decisions about their status to the members of the NATO alliance. Nevertheless, according to unclassified reports, the United States did reduce the number of nuclear weapons deployed in Europe and the number of facilities that house those weapons during the George W. Bush Administration. Some reports indicate that most of the weapons were withdrawn from Europe between 2001 and 2006. According to unclassified reports, some are stored at U.S. bases and would be delivered by U.S. aircraft; others are stored at bases operated by the "host nation" and would be delivered by that nation's aircraft if NATO decided to employ nuclear weapons. The Obama Administration did not announce any further reductions to U.S. nuclear weapons in Europe but it indicated that the United States would "consult with our allies regarding the future basing of nuclear weapons in Europe." In the months prior to the completion of NATO's 2010 Strategic Concept, some politicians in some European nations did propose that the United States withdraw these weapons. For example, Guido Westerwelle, Germany's foreign minister, stated that he supported the withdrawal of U.S. nuclear weapons from Germany. As was noted above, NATO did not call for the removal of these weapons in its new Strategic Concept, but did indicate that it would be open to reducing them as a result of arms control negotiations with Russia. Moreover, in the 2010 NPR, the Obama Administration indicated that it would take the steps necessary to maintain the capability to deploy U.S. nuclear weapons in Europe. It indicated that the U.S. Air Force would retain the capability to deliver both nuclear and conventional weapons as it replaced aging F-16 aircraft with the new F-35 Joint Strike Fighter. The NPR also indicated that the United States would conduct a "full scope" life extension program for the B61 bomb, the weapon that is currently deployed in Europe, "to ensure its functionality with the F-35." This life extension program will consolidate four versions of the B61 bomb, including the B61-3 and B61-4 that are currently deployed in Europe, into one version, the B61-12. Reports indicate that this new version will reuse the nuclear components of the older bombs, but will include enhanced safety and security features and a new "tail kit" that will increase the accuracy of the weapon. On the other hand, the 2010 NPR indicated that the U.S. Navy would retire its nuclear-armed, sea-launched cruise missiles (TLAM-N). It indicated that "this system serves a redundant purpose in the U.S. nuclear stockpile" because it is one of several weapons the United States could deploy forward. The NPR also noted that "U.S. ICBMs and SLBMs are capable of striking any potential adversary." As a result, because "the deterrence and assurance roles of TLAM-N can be adequately substituted by these other means," the United States could continue to extend deterrence and provide assurance to its allies in Asia without maintaining the capability to redeploy TLAM-N missiles. As was noted above, the Trump Administration's NPR reaffirms many of the policies and programs the United States has pursued in recent years. It does not announce any changes to the current basing of U.S. nuclear weapons in Europe, and reaffirms the U.S. commitment to upgrading U.S. dual-capable aircraft (DCA) with the nuclear-capable F-35 aircraft. It indicates that the United States will "maintain, and enhance as necessary, the capability to forward deploy nuclear bombers and DCA around the world" and will "work with NATO to best ensure—and improve where needed—the readiness, survivability, and operational effectiveness of DCA based in Europe." The 2018 NPR also reinforces U.S. support for measures that NATO is taking to ensure that its "overall deterrence and defense posture, including its nuclear forces, remain capable of addressing any potential adversary's doctrine and capabilities." These measures include, among other things, enhancing "the readiness and survivability of NATO DCA" and improving the "capabilities required to increase their operational effectiveness"; promoting "the broadest possible participation of Allies in their agreed burden sharing arrangements"; and enhancing "the realism of training and exercise programs to ensure the Alliance can effectively integrate nuclear and non-nuclear operations." On the other hand, the 2018 NPR reverses the Obama Administration's decision to remove sea-launched cruise missiles from the U.S. force structure. Where the 2010 NPR asserted that the capabilities provided by a SLCM were redundant with those available on other forward-deployable systems, the 2018 NPR argues that the SLCM will provide the United States with "a needed non-strategic regional presence" that will address "the increasing need for flexible and low-yield options." According to the NPR, this will strengthen deterrence of regional adversaries and assure allies of the U.S. commitment to their defense. The NPR also indicates that a new SLCM program could serve as a response to Russia's violation of the 1987 Intermediate-range Nuclear Forces (INF) Treaty and a "necessary incentive for Russia to negotiate seriously a reduction of its non-strategic nuclear weapons." Russia has altered and adjusted the Soviet nuclear strategy to meet its new circumstances in a post-Cold War world. It explicitly rejected the Soviet Union's no-first-use pledge in 1993, indicating that it viewed nuclear weapons as a central feature in its military and security strategies. However, Russia did not maintain the Soviet Union's view of the need for nuclear weapons to conduct surprise attacks or preemptive attacks. Instead, it seems to view these weapons as more defensive in nature, as a deterrent to conventional or nuclear attack and as a means to retaliate and defend itself if an attack were to occur. Russia has revised its national security and military strategy several times in the past 20 years, with successive versions appearing to place a greater reliance on nuclear weapons. For example, the military doctrine issued in 1997 allowed for the use of nuclear weapons "in case of a threat to the existence of the Russian Federation." The doctrine published in 2000 expanded the circumstances when Russia might use nuclear weapons to include attacks using weapons of mass destruction against Russia or its allies "as well as in response to large-scale aggression utilizing conventional weapons in situations critical to the national security of the Russian Federation." In mid-2009, when discussing the revision of Russia's defense strategy that was expected late in 2009 or early 2010, Nikolai Patrushev, the head of Russia's Presidential Security Council, indicated that Russia would have the option to launch a "preemptive nuclear strike" against an aggressor "using conventional weapons in an all-out, regional, or even local war." However, when Russia published the final draft of the doctrine, in early 2010, it did not specifically authorize the preemptive use of nuclear weapons. Instead, it stated that "Russia reserves the right to use nuclear weapons in response to a use of nuclear or other weapons of mass destruction against her and (or) her allies, and in a case of an aggression against her with conventional weapons that would put in danger the very existence of the state." Instead of expanding the range of circumstances when Russia might use nuclear weapons, this actually seemed to narrow the range, from the 2000 version that allowed for nuclear use "in situations critical to the national security of the Russian Federation" to the current form that states they might be used in a case "that would put in danger the very existence of the state." Hence, there is little indication that Russia plans to use nuclear weapons at the outset of a conflict, before it has engaged with conventional weapons, even though Russia could resort to the use of nuclear weapons first, during an ongoing conventional conflict. This is not new, and has been a part of Russian military doctrine for years. Analysts have identified several factors that have contributed to Russia's increasing dependence on nuclear weapons. First, with the demise of the Soviet Union and the economic upheavals of the 1990s, Russia no longer had the means to support a large and effective conventional army. The conflicts in Chechnya and Georgia highlighted seeming weaknesses in Russia's conventional military forces. Russian analysts also saw emerging threats in other former Soviet states along Russia's periphery. Many analysts believed that by threatening, even implicitly, that it might resort to nuclear weapons, Russia hoped it could enhance its ability to deter similar regional conflicts. Russia's sense of vulnerability, and its view that the threats to its security were increasing, also stemmed from the debates over NATO enlargement. Russia has feared the growing alliance would create a new challenge to Russia's security, particularly if NATO moved nuclear weapons closer to Russia's borders. These concerns contributed to the statement that Russia might use nuclear weapons if its national survival were threatened. For many in Russia, NATO's air campaign in Kosovo in 1999 underlined Russia's growing weakness and NATO's increasing willingness to threaten Russian interests. Its National Security Concept published in 2000 noted that the level and scope of the military threat to Russia was growing. It cited, specifically, as a fundamental threat to its security, "the desire of some states and international associations to diminish the role of existing mechanisms for ensuring international security." There are also threats in the border sphere. "A vital task of the Russian Federation is to exercise deterrence to prevent aggression on any scale and nuclear or otherwise, against Russia and its allies." Consequently, Russia concluded that it "should possess nuclear forces that are capable of guaranteeing the infliction of the desired extent of damage against any aggressor state or coalition of states in any conditions and circumstances." The debate over the role of nuclear weapons in Russia's national security strategy in the late 1990s considered both strategic and nonstrategic nuclear weapons. With concerns focused on threats emerging around the borders of the former Soviet Union, analysts specifically considered whether nonstrategic nuclear weapons could substitute for conventional weaknesses in regional conflicts. The government appeared to resolve this debate in favor of the modernization and expansion of nonstrategic nuclear weapons in 1999, shortly after the conflict in Kosovo. During a meeting of the Kremlin Security Council, Russia's President Yeltsin and his security chiefs reportedly agreed "that Moscow should develop and deploy tactical, as well as, strategic nuclear weapons." Vladimir Putin, who was then chairman of the Security Council, stated that President Yeltsin had endorsed "a blueprint for the development and use of nonstrategic nuclear weapons." Many analysts in the United States interpreted this development, along with questions about Russia's implementation of its obligations under the 1991 PNI, to mean that Russia was "walking back" from its obligation to withdraw and eliminate nonstrategic nuclear weapons. Others drew a different conclusion. One Russian analyst has speculated that the documents approved in 1999 focused on the development of operations plans that would allow Russia to conduct "limited nuclear war with strategic means in order to deter the enemy, requiring the infliction of pre-planned, but limited damage." Specifically, he argued that Russia planned to seek a new generation of nonstrategic, or low-yield, warheads that could be to be delivered by strategic launchers. Others believe Russia has also pursued the modernization of existing nonstrategic nuclear weapons and development of new nuclear warheads for shorter-range nuclear missiles. The potential threat from NATO remained a concern for Russia in its 2010 and 2014 military doctrines. The 2010 doctrine stated that the main external military dangers to Russia are "the desire to endow the force potential of the North Atlantic Treaty Organization (NATO) with global functions carried out in violation of the norms of international law and to move the military infrastructure of NATO member countries closer to the borders of the Russian Federation, including by expanding the bloc." It also noted that Russia was threatened by "the deployment of troop contingents of foreign states (groups of states) on the territories of states contiguous with the Russian Federation and its allies and also in adjacent waters." The 2014 doctrine repeated these concerns. Hence, Russia views NATO troops in nations near Russia's borders as a threat to Russian security. This concern extends to U.S. missile defense assets that may be deployed on land in Poland and Romania and at sea near Russian territory as a part of the European Phased Adaptive Approach (EPAA). In an environment where Russia also has doubts about the effectiveness of its conventional forces, its doctrine allows for the possible use of nonstrategic nuclear weapons during a local or regional conflict on its periphery. The doctrines do not say that Russia would use nuclear weapons to preempt such an attack, but it does reserve the right to use them in response. Although Russia does not use the phrase in any of these recent versions of its military doctrine, analysts both inside and outside the U.S. government often refer to this approach as the "escalate to de-escalate" doctrine. Russian statements, when combined with military exercises that simulate the use of nuclear weapons against NATO members, have led many to believe that Russia might threaten to use its nonstrategic nuclear weapons to coerce or intimidate its neighbors. These threats could occur prior to the start of a conflict, or within a conflict if Russia believed that the threat to use nuclear weapons might lead its adversaries (including the United States and its allies) to back down. This doctrine, when combined with recent Russian statements designed to remind others of the strength of Russia's nuclear deterrent, seems to indicate that Russia has increased the role of nuclear weapons in its military strategy and military planning. The 2018 Nuclear Posture Review adheres to the view that Russia has adopted such a strategy and asserts that Russia "mistakenly assesses that the threat of nuclear escalation or actual first use of nuclear weapons would serve to 'de-escalate' a conflict on terms favorable to Russia." This view underlines the NPR's recommendations for the United States to develop new low-yield nonstrategic weapons that, it argues, would provide the United States with a credible response, thereby "ensuring that the Russian leadership does not miscalculate regarding the consequences of limited nuclear first use." It is difficult to estimate the number of nonstrategic nuclear weapons remaining in the Russian arsenal. This uncertainty stems from several factors: uncertainty about the number of nonstrategic nuclear weapons that the Soviet Union had stored and deployed in 1991, when President Gorbachev announced his PNI; uncertainty about the pace of warhead elimination in Russia; and uncertainty about whether all warheads removed from deployment are still scheduled for elimination. Analysts estimate that the Soviet Union may have deployed 15,000-25,000 nonstrategic nuclear weapons, or more, in the late 1980s and early 1990s. During the 1990s, Russian officials stated publicly that they had completed the weapons withdrawals mandated by the PNIs and had proceeded to eliminate warheads at a rate of 2,000 per year. However, many experts doubt these statements, noting that Russia probably lacked the financial and technical means to proceed this quickly. In addition, Russian officials have offered a moving deadline for this process in their public statements. For example, at the Nuclear Nonproliferation Treaty review conference in 2000, Russian Foreign Minister Ivanov stated that Russia was about to finish implementing its PNIs. But, at a follow-up meeting two years later, Russian officials stated that the elimination process was continuing, and, with adequate funding, could be completed by the end of 2004. In 2007, an official from Russia's Ministry of Defense stated that Russia had completed the elimination of all of the warheads for its ground forces, 60% of its missile defense warheads, 50% of its air force warheads, and 30% of its naval warheads. In 2010, the Russian government revised this number and said it had reduced its nonstrategic nuclear weapons inventory by 75%. In 2003, General Yuri Baluyevsky, who was then the first deputy chief of staff of the Russian General Staff, stated that Russia would not destroy all of its tactical nuclear weapons and that it would, instead, "hold on to its stockpiles" in response to U.S. plans to develop new types of nuclear warheads. General Nikolai Makarov, head of the Russian General Staff, made a similar comment in 2008. He said that Russia would "keep nonstrategic nuclear forces as long as Europe is unstable and packed with armaments." Russia has also reportedly reduced the number of military bases that could deploy nonstrategic nuclear weapons and has consolidated its storage areas for these weapons. According to unclassified estimates, the Soviet Union may have had 500-600 storage sites for nuclear warheads in 1991. By the end of the decade, this number may have declined to about 100. In the past 10 years, Russia may have further consolidated its storage sites for nuclear weapons, retaining around 50 in operation. With consideration for the uncertainties in estimates of Russian nonstrategic nuclear forces, some sources indicate Russia may still have up to 4,000 warheads for nonstrategic nuclear weapons. In its 2009 report, the congressionally mandated Strategic Posture Commission indicated that Russia may have around 3,800 operational nonstrategic nuclear weapons. This number may exclude warheads slated for retirement. A more recent estimate indicates that Russia may have "nearly 2,000 nonstrategic nuclear warheads assigned for delivery by air, naval, and various defensive forces." The authors calculate that, within this total, Russia's navy maintains about 760 warheads for "cruise missiles, antisubmarine rockets, antiaircraft missiles, torpedoes, and depth charges." The Air Force may have 570 nuclear warheads available for delivery by fighters and bombers. Some of Russia's nonstrategic nuclear warheads are also allocated to Russia's air and missile defense forces, with about 140 warheads retained for short-range ballistic missiles. Another source, using a different methodology, concluded that Russia may have half that amount, or only 1,000 operational warheads for nonstrategic nuclear weapons. This estimate concludes that Russia may retain up to 210 warheads for its ground forces, up to 166 warheads for its air and missile defense forces, 334 warheads for its air force, and 330 warheads for its naval forces. Where past studies calculated the number of operational warheads by combining estimates of reductions from Cold War levels with assessments of the number of nuclear-capable units and delivery systems remaining in Russia's force structure, this author focused on the number of operational units and the likely number of nuclear warheads needed to achieve their assigned missions. Russia is also modernizing and updating its nonstrategic nuclear forces. According to unclassified sources, this effort appears to "involve phasing out Soviet-era weapons and replacing them with newer but fewer arms." Some argue that Russia will likely limit this modernization program and could retire more of these weapons than it acquires as it develops more capable advanced conventional weapons. Others, however, see Russia's modernization of its nonstrategic nuclear weapons as a partner to its "escalate to de-escalate" nuclear doctrine and argue that Russia will expand its nonstrategic nuclear forces as it raises their profile in its doctrine and war-fighting plans. The 2018 Nuclear Posture Review notes that Russia is "building a large, diverse, and modern set of non-strategic systems that ... may be armed with nuclear or conventional weapons." The NPR argues that Russia is "increasing the total number of such weapons in its arsenal, while significantly improving its delivery capabilities." The 2018 NPR also notes that one of Russia's new nonstrategic nuclear weapons is a ground-launched cruise missile with a range between 500 and 5,000 kilometers, which makes it a violation of the 1987 INF Treaty. The Obama Administration had first reported that Russia was in violation of INF in 2014, in the State Department's Report on Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments . According to the 2017 Report, Russia began deploying the missile, now known as the 9M729, in late 2016. The preceding sections of this report focus exclusively on U.S. and Soviet/Russian nonstrategic nuclear weapons. These weapons were an integral part of the Cold War standoff between the two nations. The strategy and doctrine that would have guided their use and the numbers of deployed weapons both figured into calculations about the possibility that a conflict between the two nations might escalate to a nuclear exchange. Other nations—including France, Great Britain, and China—also had nuclear weapons, but these did not affect the central conflict of the Cold War in the same way as U.S. and Soviet forces. The end of the Cold War, however, and the changing international security environment during the past 25 years has rendered incomplete any discussion of nonstrategic nuclear weapons that is limited to U.S. and Russian forces. Because both these nations maintain weapons and plans for their use, the relationship between the two nations could still affect the debate about these weapons. In addition, Russian officials have turned to these weapons as a part of their response to concerns about a range of U.S. and NATO policies. Nevertheless, both these nations have looked beyond their mutual relationship when considering possible threats and responses that might include the use of nonstrategic nuclear weapons. Both nations have highlighted the threat of the possible use of nuclear, chemical, or biological weapons by other potential adversaries or nonstate actors. Both have indicated that they might use nuclear weapons to deter or respond to threats from other nations. This theme is evident in the 2018 Nuclear Posture Review, which calls for the deployment of a new sea-launched cruise missile to address the threat, at least in part, to U.S. allies from the missile and nuclear programs in North Korea. In addition, many analysts believe that a debate about nonstrategic nuclear weapons can no longer focus exclusively on the U.S. and Russian arsenals. For example, India and Pakistan have joined the list of nations that may potentially resort to nuclear weapons in the event of a conflict. If measured by the range of delivery vehicles and the yield of the warheads, these nations' weapons could be considered to be nonstrategic. But each nation could plan to use these weapons in either strategic or nonstrategic roles. Both nations continue to review and revise their nuclear strategies, leaving many questions about the potential role for nuclear weapons in future conflicts. Pakistan, in particular, has considered deploying short-range tactical nuclear weapons with forward-deployed forces, with the intention of using them on the battlefield to blunt a possible Indian attack. China also has nuclear weapons with ranges and missions that could be considered nonstrategic. Many analysts have expressed concerns about the potential for the use of nuclear weapons in a conflict over Taiwan or other areas of China's interests. This report does not review the nuclear weapons programs in these nations. However, when reviewing the issues raised by, problems attributed to, and solutions proposed for nonstrategic nuclear weapons, the report acknowledges the role played by the weapons of these other nations. During the 2010 debate on the New START Treaty, many Senators expressed concerns about Russian nonstrategic nuclear weapons. They noted that these weapons were not covered by the new treaty, that Russia possessed a far greater number of these weapons than did the United States, and that Russia's nonstrategic nuclear weapons might be vulnerable to theft or sale to other nations seeking nuclear weapons. More recently, some Members have raised concerns about the possibility that Russia might deploy these weapons in Crimea, which Russia annexed in March 2014, bringing them closer to the borders of some NATO allies. Russia's Foreign Minister Sergei Lavrov ignited these concerns in December 2014, when he noted that Russia had a right to put nuclear weapons in Crimea because Crimea was now a part of Russia. Although he did not offer details of plans for such deployments, other reports have indicated that Russia might move missiles and bombers that could deliver either nuclear or conventional weapons into Crimea in the next few years. The 2018 Nuclear Posture Review continues to highlight concerns about Russia's nonstrategic nuclear weapons and links proposed changes in U.S. nuclear forces—including the development of a new low-yield warhead for submarine launched ballistic missiles and new sea-launched cruise missile—to Russia's apparent nuclear doctrine and the modernization of its nonstrategic nuclear forces. During the 2010 debates prior to the completion of NATO's new Strategic Concept, analysts and government officials also raised many issues about U.S. nonstrategic nuclear weapons. These debates focused on questions about whether NATO should continue to rely on nuclear weapons to ensure its security and whether the United States should continue to deploy nonstrategic nuclear weapons at bases in Europe. Many of the discussions that focused on Russian nonstrategic nuclear weapons and many of those that focused on U.S. nonstrategic nuclear weapons reached a similar conclusion—there was widespread agreement about the need for further cooperation between the United States and Russia in containing, controlling, and possibly reducing nonstrategic nuclear weapons. The 112 th Congress reiterated its support for this agenda, when in the FY2013 Defense Authorization Act ( H.R. 4310 , §1037) it indicated that "the United States should pursue negotiations with the Russian Federation aimed at the reduction of Russian deployed and nondeployed nonstrategic nuclear forces." But the tone of the discussion has changed in recent years, following Russia's annexation of Crimea, its support for separatists in Ukraine, and its military maneuvers near NATO nations. There is little discussion of possible reductions in U.S. nuclear weapons in Europe and declining interest in pursuing transparency and confidence-building measures with Russia. Instead, while the prospects for cooperation with Russia seem limited, particularly in light of its reported violation of the INF Treaty, NATO has taken steps to bolster its nuclear capabilities and the United States is considering the deployment of new nonstrategic nuclear weapons. One potential risk from Russia's continued deployment of nonstrategic nuclear weapons stems from concerns about their safety and security in storage areas and a possible lack of central control over their use when deployed in the field. These weapons were deployed, and many remain in storage, at remote bases close to potential battlefields and far from the central command authority in Moscow. The economic chaos in Russia during the 1990s raised questions about the stability and reliability of the troops charged with monitoring and securing these weapons. At the time, some raised concerns about the possibility that the weapons might be lost, stolen, or sold to other nations or groups seeking nuclear weapons. Even though economic conditions in Russia have improved significantly, some analysts still view Russian nonstrategic nuclear weapons as a possible source of instability. Specifically, some have noted that "the continuing existence of … tactical nuclear weapons … creates a risk of accidental, unauthorized or mistaken use. In addition, the risk of terrorist groups acquiring these weapons is high. Therefore, security vigilance is essential." Russian officials deny that they might lose control over their nonstrategic nuclear weapons and they contend that the problems of the 1990s were resolved as the weapons were withdrawn to central storage areas. Moreover, there is no public evidence from Western sources about any episodes of lost, sold, or stolen Russian nuclear weapons. Nevertheless, concerns remain that these weapons might find their way to officials in rogue nations or nonstate actors. For example, during comments made after a speech in October 2008, Secretary of Defense Robert Gates stated that he was worried that the Russians did not know the numbers or locations of "old land mines, nuclear artillery shells, and so on" that might be of interest to rogue states or terrorists. Russian officials noted, in response to this comment, that its stocks of nuclear weapons were secure and well-guarded and that Gates's concerns were not valid. As was noted above, many analysts argue that Russia's nonstrategic nuclear weapons pose a risk to the United States, its allies, and others because Russia has altered its national security concept and military strategies, increasing its reliance on nuclear weapons. Some fear that Russia might resort to the early use of nuclear weapons in a conflict along its periphery, which could lead to a wider conflict and the possible involvement of troops from NATO or other neighboring countries, possibly drawing in new NATO members. Some also believe that Russia could threaten NATO with its nonstrategic nuclear weapons because Russia sees NATO as a threat to its security. Russian analysts and officials have argued that NATO enlargement—with the possible deployment of nuclear weapons and missile defense capabilities on the territories of new NATO members close to Russia's borders—demonstrates how much NATO could threaten Russia. The congressionally mandated Strategic Posture Commission expressed a measure of concern about the military implications of Russia's nonstrategic nuclear forces. It noted that Russia "stores thousands of these weapons in apparent support of possible military operations west of the Urals." It further noted that the current imbalance between U.S. and Russian nonstrategic nuclear warheads is "worrisome to some U.S. allies in Central Europe." It argued that this imbalance, and the allies' worries, could become more pronounced in the future if the United States and Russia continue to reduce their numbers of deployed strategic nuclear weapons. Others have argued, however, that regardless of Russia's rhetoric, "Russia's theater nuclear weapons are not ... destabilizing." Even if modernized, these weapons will not "give Moscow the capability to alter the strategic landscape." Further, Russian weapons, even with its new military strategy, may not pose a threat to NATO or U.S. allies. Russia's doctrine indicates that it would use these weapons in response to a weak performance by its conventional forces in an ongoing conflict. Since it would be unlikely for NATO to be involved in a conventional conflict with Russia, it would also be unlikely for Russian weapons to find targets in NATO nations. This does not, however, preclude their use in other conflicts along Russia's periphery. As Russian documents indicate, Russia could use these weapons if its national survival were at stake. This view, however, has been tempered, in recent years, by both Russia's aggression in Ukraine and its frequent "nuclear saber-rattling." Not only have Russian officials reminded others of the existence and relevance of Russian nuclear weapons, Russian military exercises, bomber flights, and cruise missile launches have seemed designed to demonstrate Russia's capabilities and, possibly, its willingness to challenge NATO's eastern members. These actions have raised concerns about the possibility that Russia might threaten to use nuclear weapons during a crisis with NATO, in line with its apparent "escalate to de-escalate" strategy, to force a withdrawal by NATO forces defending an exposed ally or to terminate a conflict on terms favorable to Russia. While some analysts dispute this interpretation of Russia's doctrine, most agree that nonstrategic nuclear weapons appear to play a significant role in Russia's doctrine and war plans. The Bush Administration argued, after the 2001 Nuclear Posture Review, that the United States had reduced its reliance on nuclear weapons by increasing the role of missile defenses and precision conventional weapons in the U.S. deterrent posture. At the same time, though, the Administration indicated that the United States would acquire and maintain those capabilities that it needed to deter and defeat any nation with the potential to threaten the United States, particularly if the potential adversary possessed weapons of mass destruction. It noted that these new, threatening capabilities could include hardened and deeply buried targets and, possibly, bunkers holding chemical or biological weapons. It indicated that the United States would seek to develop the capabilities to destroy these types of facilities. Using a similar construct, the Obama Administration, in the 2010 Nuclear Posture Review, also indicated that the United States would reduce the role of nuclear weapons in U.S. regional deterrence strategies by increasing its reliance on missile defenses and precision conventional weapons. Unlike the Bush Administration, however, the Obama Administration did not seek to acquire new nuclear weapons capabilities or to extend U.S. nuclear deterrence to threats from nations armed with chemical or biological weapons. It stated that it would not consider the use of nuclear weapons in response to conventional, chemical, or biological attack if the attacking nation were in compliance with its nuclear nonproliferation obligations. Instead, in such circumstances, the United States would deter and respond to attacks with missile defenses and advanced conventional weapons. In addition, the Administration announced that it planned to retire the Navy's nuclear-armed, sea-launched cruise missiles, which had been part of the U.S. extended deterrent to allies in Asia. Nevertheless, the Administration pledged to retain and modernize the B-61 warheads, carried by U.S. tactical fighters and bombers; these are also a part of the U.S. extended deterrent. Some questioned the wisdom of this change in policy. They recognized that the United States would only threaten the use of nuclear weapons in the most extreme circumstances, but they argued that, by taking these weapons "off the table" in some contingencies, the United States might allow some adversaries to conclude that they could threaten the United States without fear of an overwhelming response. The Obama Administration argued, however, that although it was taking the nuclear option off the table in some cases, this change would not undermine the U.S. ability to deter attacks from non-nuclear nations because the United States maintained the capability to respond to attacks from these nations with overwhelming conventional force. According to Under Secretary of State Ellen Tauscher, "we retain the prospect of using devastating conventional force to deter and respond to any aggression, especially if they were to use chemical or biological weapons. No one should doubt our resolve to hold accountable those responsible for such aggression, whether those giving the orders or carrying them out. Deterrence depends on the credibility of response. A massive and potential conventional response to non-nuclear aggression is highly credible." Questions about the role of U.S. nuclear weapons in regional contingencies have resurfaced in recent years, as analysts have sought to understand how these weapons might affect a conflict with a regional ally armed with nuclear weapons. Some analysts doubt that U.S. nuclear weapons would play any role in such a contingency, unless used in retaliation after an adversary used a nuclear weapon against the United States or an ally, because U.S. conventional forces should be sufficient to achieve most conceivable military objectives. Others, however, argue that the United States might need to threaten the use of nuclear weapons, and possibly even employ those weapons, when facing an adversary seeking to use its own nuclear capabilities to intimidate the United States or coerce it to withdraw support for a regional ally. Some have suggested, specifically, that forward-deployed nuclear weapons with lower yields—in other words, nonstrategic nuclear weapons—might serve as a more credible deterrent threat in these circumstances. The 2018 Nuclear Posture Review adopts this perspective, and seems to discount the approach, taken in both the Bush and Obama NPRs, of reducing the role of nuclear weapons by expanding the role and options available with advanced conventional weapons. It does not completely dismiss the value of U.S. conventional capabilities, but asserts that "conventional forces alone are inadequate to assure many allies who rightly place enormous value on U.S. extended nuclear deterrence for their security." These concerns are central to the NPR's recommendation that the United States develop two new types of nonstrategic nuclear weapons. Where the two previous NPRs sought to fill "gaps" in deterrence with ballistic missile defenses and advanced conventional weapons, the 2018 NPR asserts that new nuclear weapons are needed for this purpose. For years after the collapse of the Warsaw Pact and demise of the Soviet Union, analysts questioned whether the United States needed to continue to deploy nuclear weapons in Europe. During the Cold War, these weapons were a part of NATO's effort to offset the conventional superiority of the Soviet Union and its Warsaw Pact allies. Some argued that this role was no longer relevant following the collapse of the Soviet-era military and alliance structure. In addition, analysts argued that NATO conventional forces were far superior to those of Russia, and sufficient for NATO's defense. However, NATO policy still views nonstrategic nuclear weapons as a deterrent to any potential adversary, and they also serve as a link among the NATO nations, with bases in several nations and shared responsibility for nuclear policy planning and decisionmaking. They also still serve as a visible reminder of the U.S. extended deterrent and assurance of its commitment to the defense of its allies. The United States, its allies, and analysts outside government engaged in a heated debate over the role of and need for U.S. nonstrategic nuclear weapons deployed in Europe in the months leading up to the completion of NATO's Strategic Concept in November 2010. In early 2010, political leaders from several NATO nations—including Belgium, Germany, Luxembourg, the Netherlands, and Norway—called for the United States to remove these weapons from Europe. They argued that these weapons served no military purpose in Europe, and that their removal would demonstrate NATO's commitment to the vision of a world free of nuclear weapons, a vision supported by President Obama in a speech he delivered in April 2009. Those who sought the weapons' removal also argued that NATO could meet the political goals of shared nuclear responsibility in other ways, and that the United States could extend deterrence and ensure the security of its allies in Europe with conventional weapons, missile defenses, and longer-range strategic nuclear weapons. Moreover, some argue, because these weapons play no military or political role in Europe, they no longer serve as a symbol of alliance solidarity and cooperation. Others, however, including some officials in newer NATO nations, argued that U.S. nonstrategic nuclear weapons in Europe not only remained relevant militarily, in some circumstances, but that they were an essential indicator of the U.S. commitment to NATO security and solidarity. This argument has gained credence as some of the newer NATO allies, such as Poland and the Baltic states, feel threatened by Russia and its arsenal of nonstrategic nuclear weapons. They would view the withdrawal of U.S. nuclear weapons as a change in the U.S. and NATO commitment to their security. NATO foreign ministers addressed the issue of U.S. nonstrategic nuclear weapons during their meeting in Tallinn, Estonia, in April 2010. At this meeting, the allies sought to balance the views of those nations who sought NATO agreement on the removal of the weapons and those who argued that these weapons were still relevant to their security and to NATO's solidarity. At the conclusion of the meeting, Secretary of State Hillary Clinton said that the United States was not opposed to reductions in the number of U.S. nuclear weapons in Europe, but that the removal of these weapons should be linked to a reduction in the number of Russian nonstrategic nuclear weapons. Moreover, according to a NATO spokesman, the foreign ministers had agreed that no nuclear weapons would be removed from Europe unless all 28 member states of NATO agreed. Some also question whether the United States and NATO might benefit from the removal of these weapons from bases in Europe for safety and security reasons. An Air Force review of nuclear surety and security practices, released in early 2008, identified potential security concerns for U.S. weapons stored at some bases in Europe. The problems were evident at some of the national bases, where the United States stores nuclear weapons for use by the host nation's own aircraft, but not at U.S. air bases in Europe. The review noted that "host nation security at nuclear-capable units varies from country to country" and that most bases do not meet DOD's security requirements. As was noted earlier, some in Congress thought the United States should consider expanding its deployment of dual-capable aircraft and nuclear bombs into eastern NATO nations, in response to Russia's aggression in Ukraine. They argued that such moves would demonstrate that "Russian actions will come at a price." Some have also suggested that the United States consider deploying new nuclear-armed missiles in Europe, in response to Russia's violation of the 1987 INF Treaty. There is little evidence that NATO has requested, or would welcome, such deployments, even though the United States has announced that it plans to withdraw from the INF Treaty. Some have argued that such steps could ignite a new arms race that could further undermine security in Europe. Others have noted that these weapons might be destabilizing if they were vulnerable to preemptive strikes. Moreover, NATO has adjusted its conventional force posture and operations in response to Russia's actions in Ukraine. According to NATO documents, these changes, when backed by the strategic nuclear forces of the United States and United Kingdom, should help assure the eastern allies of NATO's ability to defend them. The George W. Bush Administration stated that the U.S. nuclear posture adopted after the 2002 NPR, along with the research into the development of new types of nuclear warheads, would contribute to U.S. efforts to stem the proliferation of nuclear, chemical, and biological weapons. It argued that, by creating a more credible threat against the capabilities of nations that seek these weapons, the U.S. policy would deter their acquisition or deployment. It also reinforced the value of the U.S. extended deterrent to allies in Europe and Japan, thus discouraging them from acquiring their own nuclear weapons. Critics of the Bush Administration's policy questioned whether the United States needed new nuclear weapons to deter the acquisition or use of WMD by other nations; as noted above, they claim that U.S. conventional weapons can achieve this objective. Further, many analysts claimed that the U.S. policy would actually spur proliferation, encouraging other countries to acquire their own WMD. Specifically, they noted that U.S. plans and programs could reinforce the view that nuclear weapons have military utility. If the world's only conventional superpower needs more nuclear weapons to maintain its security, then it would be difficult for the United States to argue that other nations could not also benefit from these weapons. Such nations could also argue that nuclear weapons would serve their security interests. Consequently, according to the Bush Administration's critics, the United States might ignite a new arms race if it pursued new types of nuclear weapons to achieve newly defined battlefield objectives. The Bush Administration countered this argument by noting that few nations acquire nuclear weapons in response to U.S. nuclear programs. They do so either to address their own regional security challenges, or to counter U.S. conventional superiority. The Obama Administration, in the 2010 Nuclear Posture Review, set out a different relationship between U.S. nuclear weapons policy and nonproliferation policy. The Bush Administration had indicated that a policy where the United States argued that it might use nuclear weapons against non-nuclear nations would discourage these nations from acquiring or using weapons of mass destruction. In other words, they could be attacked with nuclear weapons whether or not they had nuclear weapons of their own. The Obama Administration, however, argued that its adjustment to the U.S. declaratory policy—where it indicated that it would not use U.S. nuclear weapons to threaten or attack nations who did not have nuclear weapons and were in compliance with their nonproliferation obligations—would discourage their acquisition of nuclear weapons. Nations that did not yet have nuclear weapons would know that they could be added to the U.S. nuclear target list if they acquired them. And others, like Iran and North Korea, who were already pursuing nuclear weapons, would know that, if they disbanded their programs, they could be removed from the U.S. nuclear target list. The 2018 Nuclear Posture Review, for example, explicitly states that "credible U.S. extended nuclear deterrence will continue to be a cornerstone of U.S. non-proliferation efforts." Many analysts have argued that, if allies were not confident in the reliability and credibility of the U.S. nuclear arsenal, they may feel compelled to acquire their own nuclear weapons. Such calculations might be evident in Japan and South Korea, as they face threats or intimidation from nuclear-armed neighbors like China and North Korea. In recent years, some politicians in South Korea have called for the return of U.S. nonstrategic nuclear weapons to the peninsula, or even South Korea's development of its own nuclear capability, as a response to North Korea's development and testing of nuclear weapons. This view has not received the support of the current government in South Korea, but it does demonstrate that some may see U.S. security guarantees as fragile. Many analysts note, however, that extended deterrence rests on more than just U.S. nonstrategic nuclear weapons. For example, in recent years the United States and South Korea have participated in the U.S.-ROK (Republic of Korea) Extended Deterrence Policy Committee and the United States and Japan have pursued the U.S.-Japan Extended Deterrence Dialogue to discuss issues related to regional security and to bolster the allies' confidence in the U.S. commitment to their security. Moreover, the United States occasionally flies B-2 and B-52 bombers in joint exercises with South Korea to demonstrate its ability to project power, if needed, into a conflict in the area. Concerns about the disparity between the numbers of U.S. and Russian nonstrategic nuclear weapons have dominated discussions about possible arms control measures addressing nonstrategic nuclear weapons in recent years. The United States and Russia have never employed their nonstrategic nuclear weapons to counter, or balance, the nonstrategic nuclear weapons of the other side. For NATO during the Cold War and for Russia in more recent years, these weapons have served to counter perceived weaknesses and an imbalance in conventional forces. As a result, there has been little interest, until recently, in calculating or creating a balance in the numbers of nonstrategic nuclear weapons. Some who have expressed a concern about the numerical imbalance in nonstrategic nuclear weapons argue that this imbalance could become more important as the United States and Russia reduce their numbers of strategic nuclear weapons. They fear that NATO nations located near Russia's borders may feel threatened or intimidated by Russia's nonstrategic nuclear weapons. They assert that Russia's advantage in the numbers of these weapons, when combined with a reduction in U.S. strategic forces, could convince these nations that Russia was the rising power in the region, and that they should, therefore, accede to Russia's political or economic pressure. Others, however, have questioned this logic. They agree that Russia's ability to intimidate, and possibly attack, NATO nations on its periphery may be related to the capabilities of Russia's conventional forces and the existence of Russia's nuclear forces. But this ability would exist whether Russia had dozens or hundreds of nuclear weapons in the region. And NATO's ability to resist Russian pressure and support vulnerable allies would be related more to its political cohesion and overall military capabilities than to the precise number of nuclear weapons that were deployed on European territory. Moreover, some note that, in spite of Russia's advantage in the aggregate number on nonstrategic nuclear weapons, many of Russia's weapons may be deployed at bases closer to its border with China than its borders with NATO nations, so many of these weapons should not count in the balance at all. Many analysts have argued that the United States and Russia should, at a minimum, provide each other with information about their numbers of nonstrategic nuclear weapons and the status (i.e., deployed, stored, or awaiting dismantlement) of those weapons. According to one such article, "a crucial first step ... would be to ... agree on total transparency, verification, and the right to monitor changes and movement of the arsenal." Such information might help each side to monitor the other's progress in complying with the PNIs; it could also help resolve questions and concerns that might come up about the status of these weapons or their vulnerability to theft or misuse. The United States and Russia have discussed transparency measures for nuclear weapons in the past, in a separate forum in the early 1990s, and as a part of their discussions of the framework for a START III Treaty in the late 1990s. They failed to reach agreement on either occasion. Russia, in particular, has seemed unwilling to provide even basic information about its stockpile of nonstrategic nuclear weapons. Some in the United States resisted as well, arguing that public discussions about the numbers and locations of U.S. nuclear weapons in Europe could increase pressure on the United States to withdraw these weapons. After NATO completed its new Strategic Concept in 2010 and Deterrence and Defense Posture Review in 2012, many experts recognized that NATO was unlikely to approve reductions in U.S. nonstrategic nuclear weapons in Europe unless Russia agreed to similar reductions. As a result, in recent years, some again argued that NATO and Russia should focus on transparency and confidence-building measures as a way to ease concerns and build cooperation, before they seek to negotiate actual limits or reductions in nonstrategic nuclear weapons. They could begin, for example, with discussions about which types of weapons to include in the negotiation and what type of data to exchange on these weapons. Some have suggested, in addition, that the two nations could exchange information on the locations of storage facilities that no longer house these weapons, as a way to begin the process of building confidence and understanding. Those who support this approach argue that it would serve well as a first step, and could eventually lead to limits or reductions. Others, however, believe these talks might serve as a distraction, and, if the United States and Russia get bogged down in these details, they may never negotiate limits or reductions. Moreover, Russian officials seem equally as uninterested in transparency negotiations as they are in reductions at this time. Over the years, some analysts have suggested that the United States and Russia negotiate a formal treaty to put limits and restrictions on each nation's nonstrategic nuclear weapons. This was a central theme in the debate over the New START Treaty in late 2010. Not only did Members of the Senate call on the Obama Administration to pursue such negotiations, Administration officials noted often that the New START Treaty was just a first step and that the United States and Russia would pursue limits on nonstrategic nuclear weapons in talks on a subsequent agreement. In April 2009, when Presidents Obama and Medvedev outlined their approach to nuclear arms control, they indicated that arms control would be a step-by-step process, with a replacement for the 1991 START Treaty coming first, but a more comprehensive treaty that might include deeper cuts in all types of warheads, including nonstrategic nuclear weapons, following in the future. Negotiations on a treaty to limit nonstrategic nuclear weapons could be complex, difficult, and very time-consuming. Given the large disparity in the numbers of U.S. and Russian nonstrategic nuclear weapons, and given the different roles these weapons play in U.S. and Russian security strategy, it may be difficult to craft an agreement that not only reduces the numbers of weapons in an equitable way but also addresses the security concerns addressed by the retention of these weapons. A treaty that imposed an equal ceiling on each sides' numbers of deployed nonstrategic weapons might appear equitable, but it would require sharp reductions in Russia's forces with little impact on U.S. forces. A treaty that required each side to reduce its forces by an equal percentage would have a similar result, requiring far deeper reductions on Russia's part. Even if the United States and Russia could agree on the depth of reductions to impose on these weapons, they may not be able to agree on which weapons would fall under the limit. For the United States, it may be relatively straightforward to identify the affected weapons—the limit could apply to the gravity bombs deployed in Europe and any spare weapons that may be stored in the United States. Russia, however, has many different types of nonstrategic nuclear weapons, including some that could be deployed on naval vessels, some that would be delivered by naval aircraft, and some that would be deployed with ground forces. Moreover, while many of these weapons might be deployed with units in western Russia, near Europe, others are located to the east, and would deploy with troops in a possible conflict with China. To address these problems, some analysts have suggested that the limits in the next arms control treaty cover all types of nuclear warheads—warheads deployed on strategic-range delivery vehicles, warheads deployed with tactical-range delivery vehicles, and nondeployed warheads held in storage. The Obama Administration reportedly considered this approach, and studied the contours of a treaty that would limit strategic, nonstrategic, and nondeployed nuclear warheads. This type of agreement would allow each side to determine, for itself, the size and mix of its forces, within the limits on total warheads. While this type of comprehensive agreement may seem to provide a solution to the imbalance between U.S. and Russian nonstrategic nuclear weapons, it is not clear that, once the parties move beyond limits on just their deployed strategic weapons, they will be able to limit the scope of the treaty in this way. Each side has its own list of weapons that it finds threatening; each may seek to include these in a more comprehensive agreement. For example, Russian officials, including the Foreign Minister, Sergei Lavrov, have stated that a future arms control agreement should also include limits on missile defenses, strategic-range weapons that carry conventional warheads, and possibly weapons in space. Minister Lavrov stated, specifically, that it is impossible to discuss only one aspect of the problem at strategic parity and stability negotiations held in the modern world. It is impossible to ignore such aspects as non-nuclear strategic armaments, on which the United States is actively working, plans to deploy armaments in space, which we oppose actively, the wish to build global missile defense systems, and the imbalance of conventional armaments. It is possible to hold further negotiations only with due account of all these factors…." The United States has no interest in including these types of limits in the next agreement. Hence, it is not clear that the two sides would be able to agree on which issues and what weapons systems to include in a next round of arms control negotiations. Moreover, although President Medvedev agreed, in April 2009, that the United States and Russia should pursue more arms control reductions after completing New START, Russia may have little interest in limits on nonstrategic nuclear weapons. Russian officials have denied that their weapons pose a safety and security problem, and they still consider these weapons essential to Russian military strategy and national security. Most analysts agree that the United States and Russia are unlikely to make any progress on either limits or transparency measures related to nonstrategic nuclear weapons in the current environment. Russia's annexation of Crimea, aggression against Ukraine, and violation of the INF Treaty have altered the security atmosphere in Europe and quieted calls among officials in NATO nations for reductions in these weapons. According to Obama Administration officials, the U.S. offer for further negotiations remained on the table through the end of the Administration, but "progress requires a willing partner and a conducive strategic environment." The Trump Administration reiterated this point in the 2018 Nuclear Posture Review, noting that "progress in arms control is not an end in and of itself, and depends on the security environment and the participation of willing partners." It emphasized, further, that neither of these conditions exist today, in light of Russia's violation of numerous arms control agreements and its efforts to "change borders and overturn existing norms" in Crimea and eastern Ukraine. Nevertheless, the 2018 NPR suggests the contours of a possible future arms control agreement between the United States and Russia. When discussing the need for a new sea-launched cruise missile, the NPR notes that this missile would not only provide a "non-strategic regional presence" and "an assured response capability" to bolster the U.S. commitment to its allies' defense, but would also provide "an INF-Treaty compliant response to Russia's continuing Treaty violation." Moreover, it seems to view the SLCM as a bargaining chip for a future negotiation: If Russia returns to compliance with its arms control obligations, reduces its non-strategic nuclear arsenal, and corrects its other destabilizing behaviors, the United States may reconsider the pursuit of a SLCM. Indeed, U.S. pursuit of a SLCM may provide the necessary incentive for Russia to negotiate seriously a reduction of its non-strategic nuclear weapons, just as the prior Western deployment of intermediate-range nuclear forces in Europe led to the 1987 INF Treaty. As then Secretary of State George P. Shultz stated, "If the West did not deploy Pershing II and cruise missiles, there would be no incentive for the Soviets to negotiate seriously for nuclear weapons reductions. This last sentence is a reference to NATO's 1979 Dual Track decision, which paved the way for the negotiation of the INF Treaty. In the late 1970s, the Soviet Union began to deploy a new intermediate-range ballistic missile—known as the SS-20—that threatened to upset stability in Europe and raised questions about the cohesion of NATO. As a result, in December 1979, NATO adopted a "dual-track" decision that sought to link the modernization of U.S. nuclear weapons in Europe with an effort to spur the Soviets to negotiate reductions in INF systems. In the first track, the United States and its NATO partners agreed to replace aging medium-range Pershing I ballistic missiles with a more accurate and longer-range Pershing II (P-II) while adding new ground-launched cruise missiles. In the second track, NATO agreed that the United States should attempt to negotiate limits with the Soviet Union on intermediate-range nuclear systems. The allies recognized that the Soviet Union was unlikely to negotiate limits on its missiles unless it faced a similar threat from intermediate-range systems based in Western Europe. Initially, the United States sought an agreement that would impose equal limits on both sides' intermediate-range missiles, but after several years of negotiations and significant changes in the global security environment, both nations agreed to a global ban on all land-based intermediate-range ballistic and cruise missiles. This agreement serves as an imperfect model for the offer contained in the 2018 NPR. The "dual-track" decision envisioned limits on similar systems—U.S. and Soviet intermediate-range missiles. The NPR offers to forgo the new U.S. SLCM in exchange for a longer list of Russian weapons and behaviors—it indicates that the United States may reconsider the SLCM program if Russia "returns to compliance with its arms control obligations, reduces its non-strategic nuclear arsenal, and corrects its other destabilizing behaviors." In addition, the 1979 dual track decision sought to deploy new U.S. missiles in Europe, to balance an emerging Soviet threat to Europe. A U.S. offer to forgo the SLCM in negotiations with Russia could be inconsistent with the NPR's insistence that this missile is critical to extended deterrence in Asia. Even if the United States sought to limit the agreement to missiles deployed in Europe, Russia might object by noting that the United States could easily move sea-launched cruise missiles deployed in Asia to locations closer to Russia (the INF Treaty addressed the problem of mobility by adopting a global ban on these missiles). Finally, as the United States and Soviet Union discovered when they negotiated the INF Treaty, the complexity of distinguishing between nuclear and conventional cruise missiles could necessitate a ban on all cruise missiles of a designated range. This would likely be inconsistent with the U.S. reliance on conventional SLCMs in conflicts around the world. Consequently, even with the potential opening for arms control in the 2018 NPR, it seems unlikely that the United States and Russia will pursue or conclude an agreement limiting nonstrategic nuclear weapons in the near future.
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Recent debates about U.S. nuclear weapons have questioned what role weapons with shorter ranges and lower yields can play in addressing emerging threats in Europe and Asia. These weapons, often referred to as nonstrategic nuclear weapons, have not been limited by past U.S.-Russian arms control agreements, although some analysts argue such limits would be of value, particularly in addressing Russia's greater numbers of these types of weapons. Others have argued that the United States should expand its deployments of these weapons, in both Europe and Asia, to address new risks of war conducted under a nuclear shadow. The Trump Administration addressed these questions in the Nuclear Posture Review released in February 2018, and determined that the United States should acquire two new types of nonstrategic nuclear weapons: a new low-yield warhead for submarine-launched ballistic missiles and a new sea-launched cruise missile. During the Cold War, the United States and Soviet Union both deployed nonstrategic nuclear weapons for use in the field during a conflict. While there are several ways to distinguish between strategic and nonstrategic nuclear weapons, most analysts consider nonstrategic weapons to be shorter-range delivery systems with lower-yield warheads that might be used to attack troops or facilities on the battlefield. They have included nuclear mines; artillery; short-, medium-, and long-range ballistic missiles; cruise missiles; and gravity bombs. In contrast with the longer-range "strategic" nuclear weapons, these weapons had a lower profile in policy debates and arms control negotiations, possibly because they did not pose a direct threat to the continental United States. At the end of the 1980s, each nation still had thousands of these weapons deployed with their troops in the field, aboard naval vessels, and on aircraft. In 1991, the United States and Soviet Union both withdrew from deployment most and eliminated from their arsenals many of their nonstrategic nuclear weapons. The United States now has approximately 500 nonstrategic nuclear weapons, with around 200 deployed with aircraft in Europe and the remaining stored in the United States. Estimates vary, but experts believe Russia still has between 1,000 and 6,000 warheads for nonstrategic nuclear weapons in its arsenal. The Bush Administration quietly redeployed some U.S. weapons deployed in Europe, while the Obama Administration retired older sea-launched cruise missiles. Russia, however seems to have increased its reliance on nuclear weapons in its national security concept. Analysts have identified a number of issues with the continued deployment of U.S. and Russian nonstrategic nuclear weapons. These include questions about the safety and security of Russia's weapons and the possibility that some might be lost, stolen, or sold to another nation or group; questions about the role of these weapons in U.S. and Russian security policy; questions about the role that these weapons play in NATO policy and whether there is a continuing need for the United States to deploy them at bases overseas; questions about the implications of the disparity in numbers between U.S. and Russian nonstrategic nuclear weapons; and questions about the relationship between nonstrategic nuclear weapons and U.S. nonproliferation policy. Some argue that these weapons do not create any problems and the United States should not alter its policy. Others argue that the United States should expand its deployments of these weapons in response to challenges from Russia, China, and North Korea. Some believe the United States should reduce its reliance on these weapons and encourage Russia to do the same. Many have suggested that the United States and Russia expand efforts to cooperate on ensuring the safe and secure storage and elimination of these weapons; others have suggested that they negotiate an arms control treaty that would limit these weapons and allow for increased transparency in monitoring their deployment and elimination. The 115th Congress may review some of these proposals.
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Several federal laws address the services and protections received by students with disabilities. The application of these laws may change depending upon the student's situation, and most common ly at times of transition—whether the student moves to a new school district or state, or between preschool and kindergarten, elementary school and junior high, junior high and high school, or high school and postsecondary education. Often the biggest transition for students with disabilities and their families is from the supports and services provided in the preschool-12th grade (P-12) public education system to a college or university. At the P-12 level, three main federal laws impact students with disabilities: the Individuals with Disabilities Education Act (IDEA), Section 504 of the Rehabilitation Act of 1973 (Section 504), and the Americans with Disabilities Act (ADA). For students receiving special education under the IDEA or receiving accommodations and services under Section 504, transitioning from the P-12 public education system to an institution of higher education (IHE) may affect how the school assesses their disability, their eligibility for receiving accommodations or services, and the supports, services, and accommodations available to them. This report examines those laws' impact on students with disabilities in three key respects: how they define disability; how they determine eligibility for services and protections; and how they ensure students with disabilities receive the accommodations and services they need to participate in all levels of education. In 1973, following two major federal district court decisions concluding that children with disabilities have the same right of access to public education as other children, Congress enacted the first of a series of civil rights statutes protecting individuals with disabilities: Section 504 of the Rehabilitation Act of 1973. The Rehabilitation Act of 1973 provided a statutory basis for the Rehabilitation Services Administration and funding for projects and studies supporting the employment of people with disabilities. Section 504 was the last section of the Act and the only section concerned with the civil rights of people with disabilities. That provision accordingly provides broad antidiscrimination protections for the disabled, prohibiting any "program or activity" that receives federal financial assistance from excluding "otherwise qualified individual[s] with a disability" from participating in, or benefiting from, those programs. Given the reach of federal funding, Section 504's guarantee of nondiscrimination stretches quite far, covering not just the P-12 public schools but also postsecondary education, employment, and access to public facilities as well. And because of that breadth, the act remains a key legal protection for students with disabilities today. Students who receive accommodations under Section 504 in high school may have an easier time transitioning to a postsecondary educational environment because the basic protections under Section 504 remain the same regardless of the age or education level of the person with a disability. As explained later in this report, the U.S. Department of Education (ED) has developed separate Section 504 regulations covering these different levels of education, including Preschool, Elementary, and Secondary Education (Subpart D) and Postsecondary Education (Subpart E). ED's Office of Civil Rights (OCR) has a primary role in enforcing Section 504 in the education context, affecting a significant number of students. In the 2013-2014 school year (SY), OCR reported that nearly 1 million public school students received some sort of service under Section 504. And at the postsecondary level, where students with disabilities receive protection under both Section 504 and the ADA, in SY 2015-2016, approximately 19.5% of undergraduates and 12.0% of post-baccalaureate students reported having a disability. Two years after enactment of the Rehabilitation Act, Congress passed the Education for All Handicapped Children Act, later renamed the IDEA, which focused directly on children with disabilities' access to education. At the time of the IDEA's adoption, Congress found that more than half of all children with disabilities were not receiving appropriate educational services and that 1 million children with disabilities were excluded entirely from the public school system. Congress determined, in addition, that many children participating in public school programs had undiagnosed disabilities that harmed their educational progress. To address these findings, Congress laid down a clear mandate to any state seeking funds under the act: in order to receive those funds, the state must "identify and evaluate" all children with disabilities residing "within [their] borders" to ensure those children receive a free appropriate public education. The IDEA has been comprehensively reauthorized five times since its original enactment in 1975, most recently in 2004. ED's Office of Special Education Programs in the Office of Special Education and Rehabilitative Services administers the act, and it remains the main federal statute governing special education for children from birth through age 21. The IDEA does so by supplementing state and local funding to pay for some of the additional or excess costs of educating children with disabilities. Of particular importance is Part B of the act, which protects the right of individuals with disabilities, from age 3 through 21, to a "free appropriate public education" (FAPE). In SY2017-2018, approximately 7 million children ages 3 through 21 received special education and related services under Part B of the IDEA . Students served under Part B of the IDEA represent about 13.6% of all P-12 public school students. The ADA, as amended, has been described as "the most sweeping anti-discrimination measure since the Civil Rights Act of 1964." Its purpose, as explained in the act itself, is "to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." The ADA therefore provides broad nondiscrimination protection for individuals with disabilities, applicable across many settings. Title II of the act, in particular, prohibits any "public entity," such as a public school, from discriminating based on disability, while Title III similarly forbids discrimination by "public accommodations," including nonparochial private schools. The ADA Amendments Act adopted in 2008 and made effective January 1, 2009, broadened the scope of the ADA's definition of disabilities, and, through conforming amendments, Section 504's definition as well. The ADA Amendments Act extends the ADA and Section 504 coverage to more clearly encompass all public, and some private, P-12 schools and nearly all postsecondary IHEs. According to the U.S. Census Bureau, 12.7% of the civilian noninstitutionalized population were reported to have a disability in 2017 (about 40.7 million people), including 4.2% of all children under age 18 (roughly 3.1 million) and 6.4% of all adults ages 18 to 34 (about 4.7 million). These individuals are covered by the broad protections of the ADA when accessing most services and facilities, including secondary and postsecondary educational institutions. The IDEA incorporates a categorical definition of "disability," identifying a covered "child with a disability" as any "child" having at least one of 13 conditions specifically categorized in the act. Thus, to qualify for services under the IDEA a student of qualifying age must satisfy two requirements. First, the student must have a documented disability that falls in one of the categories enumerated in the IDEA, as further specified by ED's implementing regulation. And second, as a result of that disability the student must require "special education and related services" in order to benefit from public education. Only if the student meets both criteria will he or she be eligible to receive the principal benefit of the act: specially designed instruction or special education in which the content or the delivery of the instruction is adapted to the child's individual needs, detailed in a plan known as an individualized education program (IEP). Consequently, a child who has a disability not recognized under the act, or has a disability that may require related services but not special education, has no right under the IDEA to the special education and related services provided through an IEP. Each IDEA disability category is broadly defined in ED's regulations implementing the act. And that breadth has given states some room to adopt more specific requirements for these categories, so long as those further requirements do not exclude children otherwise eligible for services under the act. Thus, for example, while the IDEA expressly covers a child suffering from some "other health impairments" (OHI), the act itself does not specify the sort of disorders that might count as such. In its IDEA regulations, ED has provided a complex definition of that statutory OHI category, listing a series of examples of disorders that may qualify under it. And some states, in their own implementing regulations, have further elaborated on ED's definition, particularly its condition that, to qualify under the IDEA, an OHI must "adversely affect[] a child's educational performance." Delaware, for instance, lists five broad requirements under "Eligibility Criteria for Other Health Impairment," one of which specifically outlines criteria for determining whether children with attention deficit disorder (ADD) and attention deficit hyperactivity disorder (ADHD) have an OHI. When a child's eligibility under the IDEA is due to ADD or ADHD, Delaware's regulation requires evaluators to examine the child according to an additional six factors, and within those six factors 18 symptoms, to determine whether the child's ADD or ADHD qualifies as an OHI. Other states, meanwhile, impose no criteria beyond those found in ED's IDEA regulations for assessing whether a child has an OHI. Sections 504 and the ADA draw on a common definition of "disability," one that is substantially broader than the categorical definition found in the IDEA. Under both laws, an "individual with a disability" includes "any person who (i) has a physical or mental impairment which substantially limits one or more major life activities, (ii) has a record of such an impairment, or (iii) is regarded as having such an impairment." This definition, unlike the IDEA's, is not restricted to the educational context. And also unlike the definition used in IDEA, the definition found in Section 504 and the ADA is broadly functional, protecting individuals with any "impairment" affecting a bodily or intellectual function—like seeing, hearing, walking, or thinking. The conditions covered by Section 504 and the ADA are therefore not confined to a particular list of "disability" categories—"autism," for example, or "specific learning disability"—as they are under the IDEA. As a result, an impairment qualifying as a "disability" under the IDEA will generally also be covered by Section 504 and the ADA, though not the reverse. Although the ADA Amendments Act maintains essentially the same statutory language as the original ADA, the subsequent act introduced several new "rules of construction" clarifying Congress's intent for the ADA's crucial term—"disability" —to be construed broadly. These rules of construction regarding the definition of disability—applicable to both the ADA and Section 504—provide that: the definition of disability shall be construed in favor of broad coverage to the maximum extent permitted by the terms of the act; the term "substantially limits" shall be interpreted consistently with the findings and purposes of the Amendments Act; an impairment that substantially limits one major life activity need not limit other major life activities to be considered a disability; an impairment that is episodic or in remission is a disability if it would have substantially limited a major life activity when active; and the determination of whether an impairment substantially limits a major life activity shall be made without regard to the ameliorative effects of mitigating measures, except that the ameliorative effects of ordinary eyeglasses or contact lenses shall be considered. The ADA Amendments Act also included a conforming amendment to the Rehabilitation Act of 1973, applying these more generous rules of construction to Section 504. ED's OCR consequently enforces the regulations implementing both Section 504 and Title II of the ADA consistently with the ADA Amendments Act. The IDEA covers all children with disabilities residing in states that receive financial assistance under the act. It does not extend, however, to students with disabilities in college or other postsecondary education and training programs. But Section 504 does, and ED has issued separate regulations specifically elaborating that provision's application to preschool, elementary, and secondary education, as well as to postsecondary education. The ADA also does not directly address the provisions of educational services; it instead prohibits discrimination against individuals with disabilities across many contexts, including by a "public entity" like a public school. The following sections of this report identify key provisions in the IDEA, Section 504, and the ADA, explain how they apply in particular situations, and analyze how they differ between students in P-12 and postsecondary education settings when more than one law applies. Table 1 also summarizes and compares key characteristics of the IDEA, Section 504, and the ADA. The IDEA requires each state that receives funds under the act to have in place policies and procedures to identify, locate, and evaluate all children residing in the state who may have a disability requiring special education and related services. These policies and procedures—known as "Child Find" —have broad application, covering all children ages 3 to 21 through their time in high school, including those who are homeless or wards of the state, attend private schools, or, according to IDEA's regulations, are highly mobile, like migrant children. The regulations implementing Section 504 contain similar provisions requiring recipients of federal money operating public elementary and secondary schools "to identify and locate every qualified handicapped person residing in the recipient's jurisdiction who is not receiving a public education." Section 504's regulations also require LEAs to evaluate students individually before classifying them as having a disability or providing them with accommodations, special education, or related services. But these responsibilities apply only to students in public elementary or secondary schools. Students protected by Section 504 in colleges and universities are responsible for providing their IHEs with documentation of their disabilities and for working with the IHE's disability support services personnel to arrange any accommodations they may need. And the same is true under the ADA. A child who has been identified as having (or possibly having) a disability must be evaluated by his or her LEA before receiving special education and related services under the IDEA or Section 504. The ADA, by contrast, contains no such requirement. Under the IDEA, individuals may qualify for an IEP only if they have been determined to have a qualifying disability for which they need special education and/or related services to benefit from public education. But a child who has a disability that does not adversely affect his or her educational performance—as required to be eligible for an IEP under several IDEA disability categories —may still qualify for a plan under Section 504. Under the IDEA, either a child's parent or the LEA may request an initial evaluation. In general, the LEA must obtain informed consent from a child's parent before conducting an initial evaluation. That consent, however, does not transfer—parental consent to an evaluation, that is, does not imply consent to special education and related services. In addition, the initial evaluation must take place within 60 days of receiving parental consent or within an alternative time frame established by the state. Section 504, unlike the IDEA, does not explicitly call either for parental consent to an evaluation or for an evaluation to take place within a specific period after being requested. ED's OCR has nevertheless interpreted Section 504 to require LEAs to obtain parental consent to an initial evaluation. But under Section 504, like under the IDEA, a parent's refusal of an evaluation may not be the final word. OCR has construed Section 504 to allow an LEA, whenever it "suspects a student needs or is believed to need special instruction and parental consent is withheld," to "use due process hearing procedures to seek to override the parents' denial of consent for an initial evaluation." In conducting an initial evaluation of a child suspected of having a disability, both the IDEA and Section 504 regulations require LEAs to use valid and reliable assessment tools tailored to assess a child's specific areas of educational need. The IDEA emphasizes the importance of using multiple measures of assessing whether children are eligible for services under the statute, requiring LEAs to "use a variety of assessment tools and strategies to gather relevant functional, developmental, and academic information, including information provided by the parent." The IDEA also requires that LEAs use multiple measures or assessments to determine whether a child is "a child with a disability" under the act, as well as to determine whether an educational program is appropriate. The Section 504 regulations, for their part, also require LEAs "to draw upon information from a variety of sources" when interpreting evaluation data, "including aptitude and achievement tests, teacher recommendations, and adaptive behavior." And the Section 504 regulations likewise "establish procedures to ensure that information obtained from all relevant sources is documented and carefully considered." Assessments and other evaluation materials used to assess a child under the IDEA must be selected and administered to avoid discriminating on a racial or cultural basis. They must also be provided and administered in the language and form most likely to yield accurate information about what the child knows and can do academically, developmentally, and functionally. Section 504's regulations do not address children's native language or the possibility of racially or culturally discriminatory evaluation materials. However, they do include "social or cultural background" information as one of several sources LEAs should draw upon in interpreting evaluation data and in making placement decisions. After completing an evaluation for an IEP under the IDEA, the LEA must determine whether the child is a "child with a disability" under the act, and, if so, what his or her educational needs are, including the participation of qualified professionals and the child's parents. Section 504, by contrast, does not expressly require that a child's parents participate in placement decisions. Section 504 regulations instead provide only that placement decisions be made "by a group of persons, including those knowledgeable about the child, the meaning of the evaluation data, and the placement options." ED's regulations under Section 504 do mandate, however, that LEAs have in place "a system of procedural safeguards that includes notice, an opportunity for the parents or guardian of the person to examine relevant records, an impartial hearing with opportunity for participation by the person's parents or guardian and representation by counsel, and a review procedure." Under IDEA regulation, reevaluations are required if a child's teacher or parent makes a request or if the LEA determines that a child's educational and service needs, or functional performance warrant reevaluation. For example, a reevaluation might be warranted if a child's performance in school significantly improves, suggesting that the child no longer requires special education and related services, or if a child is not making progress toward the goals in his or her IEP, suggesting that changes are needed in the special education or related services the LEA is providing. A reevaluation may not be done more than once a year unless the parents and LEA agree, and must be done at least once every three years unless the parent and the LEA agree that a reevaluation is unnecessary. In general, the child's parent(s) must consent to a reevaluation, as well as to the initial evaluation. Before any such reevaluation, an LEA may not change a child's eligibility for educational services under the IDEA, unless the child graduates from high school with a regular diploma or reaches the age at which state law no longer provides a FAPE. The briefer Section 504 regulations simply require LEAs to establish procedures for "the periodic reevaluation of students who have been provided special education and related services." Reevaluation procedures consistent with the IDEA also satisfy this regulatory requirement. As noted, at the postsecondary level educational institutions have no responsibility for evaluating students for a disability. However, if a student requests modifications, accommodations, or auxiliary aids or services because of a disability, IHEs are allowed, though not required, to request that the student provide "reasonable" documentation of his or her disability and need for the requested accommodations or services. Before the ADA Amendments Act in 2008, which clarified Congress's intent that "disability" under the ADA and Section 504 be construed broadly, there had been significant confusion among IHEs about what a student could be required to use to document a disability. Different IHEs developed their own requirements for the evaluation/reevaluation materials students needed to submit to establish a disability warranting accommodations and services. Some universities required students to produce "recent" documentation of an evaluation or reevaluation for a disability, while other schools, looking to the IDEA as a guide, instead required comprehensive evaluations that were no more than three years old. Requirements for "recent" documentation may apply to returning postsecondary students; students who had been served under Section 504 in high school; students who attended private schools that did not require or provide evaluations to determine students' disability status; and any postsecondary student with a disability whose disability had last been comprehensively evaluated in the ninth grade or earlier. Such students would need to be reevaluated at their own expense to prove that they were still a student with a disability, if they wanted to receive accommodations or supports at the postsecondary level. Prior to the passage of the ADA Amendments Act, several courts struck down triennial evaluation requirements used by colleges and universities, as well as requirements that students be regularly reevaluated for the presence of a disability even when they were permanently disabled and had sufficient (but not recent) proof of their disability status. And the ADA Amendments Act only reinforced the breadth of the ADA's and Section 504's protection, with its implementing regulations explaining that: The primary purpose of the ADA Amendments Act is to make it easier for people with disabilities to obtain protection under the ADA. Consistent with the ADA Amendments Act's purpose of reinstating a broad scope of protection under the ADA, the definition of "disability" in this part shall be construed broadly in favor of expansive coverage to the maximum extent permitted by the terms of the ADA. The primary object of attention in cases brought under the ADA should be whether entities covered under the ADA have complied with their obligations and whether discrimination has occurred, not whether the individual meets the definition of "disability." The question of whether an individual meets the definition of "disability" under this part should not demand extensive analysis. Also since the passage of the ADA Amendments Act, IHEs and professional organizations have prepared their own informal guidance for disability support services staff, professors, and anyone else responsible for confirming a student's disability and request for accommodations. Current guidance for IHEs tends to support the use of postsecondary students' past evaluations for special education services or accommodations under Section 504, or other information from external or third parties, as potentially useful supporting documentation but not necessarily required for determining a disability. Determining an appropriate public school placement for a child with a disability calls for similar considerations under both the IDEA and Section 504. However, as with many other aspects of P-12 education for children with disabilities discussed in this report, there are more specific provisions on placement decisions in the IDEA than in Section 504. For example, the IDEA requires that a placement decision for a child with a disability be determined at least annually; be based on the child's IEP; and be made by a group of people who are knowledgeable about the child, the meaning of the evaluation data, and the placement options, including the child's parents. In comparison, Section 504 does not require placement decisions to be determined at any particular time interval. Nor does it require those decisions to be based on a child's educational plan under Section 504 or include specific persons as a part of the deliberations—parents included. In other aspects of their placement provisions, the IDEA and Section 504 are more alike. For example, like the IDEA, Section 504 regulation requires that a child with a disability be placed in the regular educational environment to the maximum extent appropriate to the needs of the child. Under the IDEA and its implementing regulations, when determining a child's placement, states must have in effect policies and procedures to ensure that LEAs are providing a free appropriate public education in the least restrictive environment (LRE)—that children with disabilities, in other words, receive their education alongside children who do not have disabilities, to the maximum extent appropriate. Section 504's regulations do not use the same terminology as the IDEA—there is no express mention of an LRE, for instance—but both require, in academic and nonacademic settings (e.g., lunch, recess), that children with disabilities be educated with their nondisabled peers "to the maximum extent appropriate to [their] needs." Under the IDEA, LEAs "must ensure that a continuum of alternative placements [are] available to meet children's needs for special education and related services." This includes "instruction in regular classes," with the provision of supplementary services when appropriate, as well as "special classes, special schools, home instruction, and instruction in hospitals and institutions." In contrast to IDEA's focus on a continuum of services to enable an appropriate placement for each child with a disability, Section 504's main concern, as a civil-rights law, is to ensure that children with disabilities are not discriminated against in their placements, so that children with disabilities can participate whenever possible in academic and nonacademic activities alongside their peers without disabilities. In cases where a child with a disability does need to attend a facility specifically for children with disabilities, the LEA must ensure that the facility and the services and activities it provides are "comparable to the LEA's other facilities, services, and activities." Unlike the IDEA, the Section 504 regulations do not mandate the use of an IEP, though an IEP that satisfies the IDEA will also satisfy Section 504. And the regulations implementing Section 504, unlike those under the IDEA, do not detail how a student's educational plan developed under Section 504—often called a "504 plan"—must be created. Thus, for example, while the IDEA specifies the members who must be invited to participate in a child's IEP team including the child's parents, no similar requirement appears in Section 504 or its regulations. In addition, any accommodations, special education, and related services described in a student's IEP or 504 plan must be implemented in all of the student's classes, whether they are special education classes, regular education classes, or accelerated classes. For example, ED has determined that denying students with disabilities access to accelerated programs such as Advanced Placement and International Baccalaureate classes violates Section 504 regulations as well as the regulations implementing the IDEA. Even though schools may have eligibility requirements for such courses, ED has concluded that both sets of regulations make it "unlawful to deny a student with a disability admission to an accelerated class or program solely because of that student's need for special education or related aids and services." Because the IDEA is designed to improve the education of all children with qualifying disabilities, the act also provides benefits and services to eligible children enrolled by their parents in private school. As a result, the IDEA as well as ED's implementing regulations each have extensive provisions addressing children with disabilities who attend private schools. Those provisions range from funding conditions to LEAs' and State Education Agencies' (SEAs') responsibilities under Child Find to the procedural safeguards protecting families of children with disabilities in private schools. Most of the IDEA's provisions on private school placements, however, fall into two broad categories: those related to children placed in or referred to private schools by public agencies, and those related to children enrolled in private schools by their parents. Together, these provisions outline the various procedural, financial, and educational responsibilities of SEAs, LEAs, private schools, and parents of children with disabilities in private schools, depending on who decided to place the child in private school. In contrast, the Section 504 regulations addressing students with disabilities in private schools do not address SEAs, LEAs, or parents of children with disabilities. They instead outline general responsibilities toward students with disabilities that are incumbent on any private educational institution receiving federal financial assistance. Thus, under Section 504 regulations, a private elementary or secondary school that receives federal funds "may not exclude a student with a disability if the student can, with minor adjustments, be provided an appropriate education within that institution's program or activity." Nor may a recipient of federal funds charge more to educate students with disabilities than those without disabilities, according to ED's Section 504 regulations, "except to the extent that any additional charge is justified by a substantial increase in cost to the federal funding recipient." The IDEA requires IEP teams to include postsecondary transition goals and services in each student's IEP beginning no later than when students are 16 years old. Transition goals and services are individualized. For a student planning to pursue postsecondary education, transition services could include helping the student select colleges to apply to or complete applications; obtain accommodations, such as extended time on standardized college placement tests; practice self-advocacy skills; or any other services that the IEP team agrees would help the student prepare for postsecondary education. However, no matter what transition services students with disabilities receive in high school, those transition services will end once they exit the P-12 public school system and enter an IHE. At the postsecondary level, Section 504 and the ADA require IHEs to provide broad nondiscrimination protection to students who have a disability or who are regarded as having one. However, Section 504 and the ADA do not require IHEs to seek out students with disabilities to provide them with these protections, to evaluate students who are suspected of having a disability, or to arrange proactively for accommodations for students who had been evaluated and found eligible for services under IDEA, Section 504, or the ADA. At the postsecondary level, students must self-identify as having a disability, provide appropriate documentation of their disability, and arrange with campus disability support services for any accommodations and services to which they may be entitled. Section 504 and the ADA protect students applying for postsecondary education from discrimination in two basic ways: (1) in the eligibility requirements and admissions policies and procedures adopted by those institutions, and (2) following admission, in any activities, programs, aid, benefits, or services offered to students. ADA regulations also prohibit public accommodations, including IHEs, from imposing or applying eligibility criteria that screen out individuals with disabilities from fully and equally enjoying any goods, services, facilities, privileges, advantages, or accommodations they offer. Section 504 regulations likewise prohibit discrimination in admissions policies, including admissions testing. And the ADA regulations extend those prohibitions to private entities that "offer[] examinations or courses related to applications, licensing, certification, or credentialing for secondary or postsecondary education, professional, or trade purposes," requiring them to provide those examinations or courses "in a place and manner accessible to persons with disabilities or offer alternative accessible arrangements." At the P-12 level, the IDEA, Section 504, and the ADA all guarantee students with disabilities a free appropriate public education. Those provisions, while similar, are not identical. Their differences largely have to do with details, but they generally can be traced to a more basic difference in statutory design: "the IDEA guarantees individually tailored educational services, while Title II [of the ADA] and [Section] 504 promise nondiscriminatory access to public institutions." The IDEA's provisions addressing a FAPE are consequently much more detailed than their counterparts in Section 504, the same that apply, according to ED, under Title II of the ADA. These differences among the three statutory schemes have also led to some judicial disagreement about how to relate their violations: specifically, whether denying an eligible child the IDEA's procedural or substantive guarantees also amounts to disability discrimination, in violation of Section 504 (and, by extension, Title II of the ADA). At least some of the lower courts have found these violations to overlap, so that a valid claim under the IDEA will "almost always" support one under Section 504. Other courts, however, have taken the opposite view: for them, "something more than a mere failure to provide the 'free appropriate education' required by [IDEA] must be shown" before those courts will draw the discriminatory inference required for a violation of Section 504. What that something is also appears to vary somewhat by court, but several have insisted on a showing of at least "bad faith or gross misjudgment . . . before a [Section] 504 violation [will] be made out" in this context. Whatever its differences with Section 504, Part B of the IDEA nevertheless mandates that every recipient state provide a FAPE to all disabled children between the ages of 3 and 21 residing "within its borders." "An eligible child [therefore] acquires a 'substantive right' to such an education once a State accepts the IDEA's financial assistance," and the state's denial of that education therefore entitles eligible students to legal relief, whether in the form of an injunction for the improperly denied services or money damages. What a FAPE entails, and what demands it puts on a school district, will therefore vary from student to student. At a minimum, however, a FAPE consists of "special education and related services"—"specially designed instruction," in other words, that "meets the unique needs of a child with a disability. And for that instruction to qualify as a FAPE, it must also be "provided at public expense, under public supervision, and without charge; meet[] the standards of the [SEA];" encompass preschool through secondary school; and conform to the student's IEP. A child's IEP accordingly "serves as the 'primary vehicle' for providing [him or her] with the promised FAPE," by specifying the particular special education and related services that the LEA will provide to meet the child's needs. Apart from these procedural minimums, the substantive guarantee of a FAPE remains highly general. And that generality has provoked one of the most commonly litigated questions under the act: What does an "appropriate" public education require of an IEP? In an early decision under the act— Board of Education v. Rowley —the U.S. Supreme Court appeared to set the bar fairly low. There the Court concluded that a school district could satisfy its responsibility of providing a FAPE so long as it had met two basic conditions. The school district had to have observed all of the IDEA's procedural rules, and it had to have provided an IEP "reasonably calculated" to "confer some educational benefit" on the child. But that latter condition—requiring an IEP that conferred "some educational benefit"—did little to resolve the basic ambiguity in the IDEA's guarantee of a FAPE: How much benefit would make an IEP "appropriate"? The lower federal courts were therefore left to fashion for themselves a more concrete standard for deciding whether an IEP had provided an eligible child with enough of a benefit to satisfy Rowley . On this point some courts took a minimalist view, requiring an IEP to provide at least some educational benefit —a benefit, in other words, that is "barely more than de minimis ." Other courts, however, read Rowley as calling for much more, demanding evidence that an IEP had provided "meaningful benefit to the child." Faced with this circuit split, in 2017, the Supreme Court took the opportunity in Endrew F. v. Douglas County School District to clarify just how much of a benefit an eligible child must receive through an IEP. The Court did so by returning to its Rowley standard: to provide an eligible child a FAPE under the IDEA, the Court explained, a school must "offer an IEP reasonably calculated to enable a child to make progress appropriate in light of the child's circumstance." Thus, "for a child fully integrated in the regular classroom, an IEP typically should . . . be 'reasonably calculated to enable the child to achieve passing marks and advance from grade to grade.'" The Court cautioned, however, that an appropriate measure of "progress" would depend on the child's circumstances—and especially on the child's integration into the regular classroom. For children with disabilities not integrated into the regular classroom, an "appropriate" IEP therefore "need not aim for grade-level advancement." Endrew F. clearly rejected, then, the more minimalist view of a FAPE. "[T]he IDEA demands more" from an IEP than the "barely more than de minimis progress" that the lower court upheld there. A child's IEP must instead be "appropriately ambitious in light of his circumstances," so that that child, like every other, "ha[s] the chance to meet challenging objectives" despite his differing goals. Although the Court did not explicitly compare its refined standard in Endrew F. with the view from the other side of the circuit split—that an appropriate IEP needed to confer a meaningful benefit on a child—several lower courts have taken Endrew F. to vindicate that meaningful-benefit standard nonetheless. As the U.S. Court of Appeals for the First Circuit explained, Endrew F. appears to call for an IEP of exactly the same quality that that circuit had expected all along under Rowley . Thus, "[a]t a bare minimum," that standard demands an IEP that includes "the child's present level of educational attainment, the short-and long-term goals for his or her education, objective criteria with which to measure progress toward these goals, and the specific services to be offered." Whether the other circuits will also agree on that "bare minimum" remains to be seen. The right of students with disabilities to a FAPE under the IDEA has a still more definite limit: it does not extend to students in colleges, universities, or any other postsecondary education or training programs. Instead, the IDEA requires only that LEAs provide qualifying students with disabilities a FAPE until they exit high school—whether by graduating, dropping out—or until they surpass the maximum age for IDEA services, 21 years old. Section 504 and the ADA, on the other hand, have no such limit. They instead protect students of all ages from discrimination based on their disability, both during the admissions process and while enrolled as a student. Like the IDEA, however, Section 504's regulations ensure a FAPE only to students in P-12 public schools, a guarantee that ED has read to be "incorporated in the general nondiscrimination provisions of the Title II regulation" under the ADA as well. To receive services under the IDEA, a child must be evaluated and found eligible for an IEP under one of the IDEA disability categories and must because of that disability require special education and related services to benefit from public education. In the IDEA, "special education" means instruction designed to meet the unique needs of a child with a disability, provided at no cost to the child's parents. It may include instruction conducted in both academic and nonacademic settings, including in the classroom, in the home, and in hospitals and institutions, as well as instruction in physical education. In comparison, "related services" are intended to assist a child with a disability to benefit from special education—such as nursing services during the school day for a student who relies on a ventilator. Among the related services provided by the IDEA are speech-language pathology and audiology services; interpreting services, psychological services; physical and occupational therapy; recreation, including therapeutic recreation; social work services; counseling services; and, certain medical and school nurse services. Besides special education and related services, under the IDEA and implementing regulations children with disabilities may receive supplementary aids and services and other supports in regular education classes, and in extracurricular and nonacademic settings, to enable them to be educated with nondisabled children to the maximum extent appropriate. The combination of special education, related services, and other supplementary aids and services a child receives is determined by the child's IEP team, taking into consideration the child's academic, developmental, and functional needs. As discussed, the IDEA defines a FAPE as special education and related services that are provided at public expense, meet the standards of the SEA, and conform to the student's IEP. As part of their right to a FAPE, each child receiving services under the IDEA must have an IEP stating the specific special education and related services the LEA will provide to meet his or her needs. Unlike the IDEA, an "appropriate education" under Section 504 regulation is defined as the provision of regular or special education and related aids and services designed to meet individual educational needs of children with disabilities as adequately as the needs of children without disabilities are met and that comply with procedural requirements. Note, however, that the IDEA specifically requires the provision of special education and related services, while Section 504 requires the provision of regular or special education and related aids and services. Thus, a child with a Section 504 plan may be served by a "regular" education with related aids and services, while under the IDEA a qualifying child must be provided "special education." To receive accommodations or services under the ADA or Section 504 at the postsecondary level, students with disabilities must seek out the person or office at their IHEs responsible for arranging accommodations for students with disabilities, request the accommodations they need, and provide the documentation and/or personal history necessary to support their request. ED's regulations implementing Title II of the ADA include specific requirements to guide disability and accommodation services personnel at IHEs when considering such requests. Thus, for example, the regulations instruct IHEs, [w]hen considering requests for modifications, accommodations, or auxiliary aids or services, [to] give[] considerable weight to documentation of past modifications, accommodations, or auxiliary aids or services received in similar testing situations, as well as such modifications, accommodations, or related aids and services provided in response to an [IEP] provided under the [IDEA] or a . . . Section 504 Plan. Once students have provided adequate documentation of their disabilities to the appropriate person or office, Section 504 and Title II of the ADA protect them from discrimination based on their disabilities. Section 504's regulations on postsecondary education programs and activities elaborate on IHEs' responsibilities for adopting and maintaining nondiscriminatory practices toward students with disabilities, including through accommodations, modifications, or adaptations across many contexts, from course examinations to housing and counseling services to financial and employment assistance.
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The Individuals with Disabilities Education Act (IDEA), Section 504 of the Rehabilitation Act (Section 504), and the Americans with Disabilities Act (ADA) each play a significant part in federal efforts to support the education of individuals with disabilities. These statutory frameworks, while overlapping, differ in scope and in their application to students with disabilities. As a result, when students with disabilities transition between levels of schooling, the accommodations and services they must be provided under federal law may change. For example, while the IDEA, the ADA, and Section 504 potentially apply to children with disabilities from preschool through 12th grade (P-12), only the ADA and Section 504 apply to students in an institution of higher education. More generally, application of the IDEA, Section 504, and the ADA to students with disabilities is determined by (1) the definition of "disability" employed by each framework; (2) the mechanisms employed under each law to determine whether a student has a qualifying disability; and (3) the adaptations, accommodations, and services that must be provided to students with disabilities under each law. Individuals with Disabilities Education Act (IDEA) The IDEA, as amended, authorizes federal grants to states to support the education of children with disabilities. The act requires that states, as a condition for receiving funds, provide students with disabilities a range of substantive and procedural protections. For example, states and local education agencies (LEAs) must (1) identify, locate, and evaluate all children with disabilities residing in the state, regardless of the severity of their disability, to determine which children are eligible for special education and related services; (2) convene a team, which includes the parents of each eligible child with a disability, to develop an individual education program (IEP) spelling out the specific special education and related services to be provided to that child to ensure a "free appropriate public education" (FAPE); and (3) provide procedural safeguards to children with disabilities and their parents, including a right to an administrative hearing to challenge determinations and placements, with the ability to appeal the ruling to federal district court. Of the three legal frameworks discussed in this report, only the IDEA is focused squarely on educational matters, and its statutory provisions and implementing regulations specifically detail the rights of children with disabilities and their families in U.S. public schools. Of the three laws examined here, the IDEA is also the only one that fixes an age limit, with its substantive and procedural guarantees applying to persons with disabilities from birth until they reach 21 years or exit high school, if earlier. Section 504 of the Rehabilitation Act of 1973 Section 504 is an antidiscrimination provision within a broader federal law providing rehabilitation services to people with disabilities. Section 504 protects individuals from disability discrimination in programs and activities that receive federal financial assistance, including elementary and secondary schools, as well as many colleges and universities. While Section 504 is terse in describing covered entities' obligations, the statute's implementing regulations, including those promulgated by the U.S. Department of Education (ED) applicable in the educational context, are extensive. For example, Section 504 and its implementing regulations require all schools receiving federal funds to make their application forms and course materials accessible to people with disabilities. Americans with Disabilities Act of 1990 (ADA) Enacted in 1990, the ADA provides broad nondiscrimination protection for individuals with disabilities across a range of institutional contexts, both public and private, including employment, public services, transportation, telecommunications, public accommodations, and services operated by private entities. In an educational context, the ADA and implementing regulations effectively require both public schools and many P-12 private schools to ensure that students with disabilities are not excluded, denied services, segregated, or otherwise treated differently than other individuals because of their disability, unless the school can demonstrate that taking those steps would fundamentally alter the nature of the school's program or cause an undue financial burden. The ADA's statutory provisions and implementing regulations outline the types of modifications that must be made for individuals with disabilities, including the removal of barriers, alterations to new and existing buildings, accessible seating in assembly areas, and accessible examinations and course materials.
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A plaintiff injured by a defendant's wrongful conduct may file a tort lawsuit to recover money from that defendant. To name an especially familiar example of a tort, "a person who causes a crash by negligently driving a vehicle is generally liable to the victim of that crash." By forcing people who wrongfully injure others to pay money to their victims, the tort system serves at least two functions: (1) "deter[ring] people from injuring others" and (2) "compensat[ing] those who are injured." Employees and officers of the federal government occasionally commit torts just like other members of the general public. Until the mid-20th century, however, the principle of "sovereign immunity"—a legal doctrine that bars private citizens from suing a sovereign government without its consent—prohibited plaintiffs from suing the United States for the tortious actions of federal officers and employees. Thus, for a substantial portion of this nation's history, persons injured by torts committed by the federal government's agents were generally unable to obtain financial compensation through the judicial system. Congress, deeming this state of affairs unacceptable, ultimately enacted the Federal Tort Claims Act (FTCA) in 1946. The FTCA allows plaintiffs to file and prosecute certain types of tort lawsuits against the United States and thereby potentially recover financial compensation from the federal government. Some FTCA lawsuits are relatively mundane; for instance, a civilian may sue the United States to obtain compensation for injuries sustained as a result of minor accidents on federal property. Other FTCA cases, however, involve grave allegations of government misfeasance. For example, after naval officers allegedly sexually assaulted several women at the infamous Tailhook Convention in 1991, those women invoked the FTCA in an attempt to hold the United States liable for those officers' attacks. Family members of persons killed in the 1993 fire at the Branch Davidian compound in Waco likewise sued the United States under the FTCA, asserting that federal law enforcement agents committed negligent acts that resulted in the deaths of their relatives. Additionally, the U.S. Court of Appeals for the First Circuit affirmed an award of over $100 million against the United States in an FTCA case alleging that the Federal Bureau of Investigation (FBI) committed "egregious government misconduct" resulting in the wrongful incarceration of several men who were falsely accused of participating in a grisly gangland slaying. Empowering plaintiffs to sue the United States can ensure that persons injured by federal employees receive compensation and justice. However, waiving the government's immunity from tort litigation comes at a significant cost: the U.S. Department of the Treasury's Bureau of the Fiscal Service (Bureau) reports that the United States spends hundreds of millions of dollars annually to pay tort claims under the FTCA, and the Department of Justice reports that it handles thousands of tort claims filed against the United States each year. Moreover, exposing the United States to tort liability arguably creates a risk that government officials may inappropriately base their decisions "not on the relevant and applicable policy objectives that should be governing the execution of their authority," but rather on a desire to reduce the government's "possible exposure to substantial civil liability." As explained in greater detail below, the FTCA attempts to balance these competing considerations by limiting the circumstances in which a plaintiff may successfully obtain a damages award against the United States. For example, the FTCA categorically bars plaintiffs from pursuing certain types of tort lawsuits against the United States. The FTCA also restricts the types and amount of monetary damages that a plaintiff may recover against the United States. Additionally, the FTCA requires plaintiffs to comply with an array of procedural requirements before filing suit. This report provides an overview of the FTCA. It first discusses the events and policy concerns that led Congress to enact the FTCA, including the background principle of sovereign immunity. The report then explains the effect, scope, and operation of the FTCA's waiver of the United States' immunity from certain types of tort claims. In doing so, the report describes categorical exceptions to the government's waiver of sovereign immunity, statutory limitations on a plaintiff's ability to recover monetary damages under the FTCA, and the procedures that govern tort claims against the United States. The report concludes by discussing various legislative proposals to amend the FTCA. A person injured by the tortious activity of a federal employee generally has two potential targets that he might name as a defendant in a tort lawsuit: (1) the federal employee who committed the tort and (2) the federal government itself. In many cases, however, suing the employee is not a viable option. For one, as explained in greater detail below, Congress has opted to shield federal officers and employees from personal liability for torts committed within the scope of their employment. Moreover, even if Congress had not decided to insulate federal employees from tort liability, suing an individual is typically an unattractive option for litigants, as individual defendants may lack the financial resources to satisfy an award of monetary damages. For many litigants, the legal and practical unavailability of tort claims against federal employees makes suing the United States a more attractive option. Whereas a private defendant may lack the financial resources to satisfy a judgment rendered against him, the United States possesses sufficient financial resources to pay virtually any judgment that a court might enter against it. A plaintiff suing the United States, however, may nonetheless encounter significant obstacles. In accordance with a long-standing legal doctrine known as "sovereign immunity," a private plaintiff ordinarily may not file a lawsuit against a sovereign entity—including the federal government—unless that sovereign consents. For a substantial portion of this nation's history, the doctrine of sovereign immunity barred citizens injured by the torts of a federal officer or employee from initiating or prosecuting a lawsuit against the United States. Until 1946, "the only practical recourse for citizens injured by the torts of federal employees was to ask Congress to enact private legislation affording them relief" through "private bills." Some, however, criticized the public bill system. Not only did private bills impose "a substantial burden on the time and attention of Congress," some members of the public became increasingly concerned "that the private bill system was unjust and wrought with political favoritism." Thus, in 1946, Congress enacted the FTCA, which effectuated "a limited waiver of [the federal government's] sovereign immunity" from certain common law tort claims . With certain exceptions and caveats discussed throughout this report, the FTCA authorizes plaintiffs to bring civil lawsuits 1. against the United States; 2. for money damages; 3. for injury to or loss of property, or personal injury or death; 4. caused by a federal employee's negligent or wrongful act or omission; 5. while acting within the scope of his office or employment; 6. under circumstances where the United States, if a private person, would be liable to the plaintiff in accordance with the law of the place where the act or omission occurred. Thus, not only does the FTCA "free Congress from the burden of passing on petitions for private relief" by "transfer[ring] responsibility for deciding disputed tort claims from Congress to the courts," it also creates a mechanism to compensate victims of governmental wrongdoing. In addition to this compensatory purpose, the FTCA also aims to "deter tortious conduct by federal personnel" by rendering the United States liable for the torts of its agents, thereby incentivizing the government to carefully supervise its employees. Significantly, however, the FTCA does not itself create a new federal cause of action against the United States; rather, the FTCA waives the United States's sovereign immunity from certain types of claims that exist under state tort law . Thus, in most respects, "the substantive law of the state where the tort occurred determines the liability of the United States" in an FTCA case. In this way, the FTCA largely "renders the Government liable in tort as a private individual would be under like circumstances." Critically, however, "although the FTCA's waiver of sovereign immunity is significant and extensive, it is not complete." To address "concerns . . . about the integrity and solvency of the public fisc and the impact that extensive litigation might have on the ability of government officials to focus on and perform their other duties," the FTCA affords the United States "important protections and benefits . . . not enjoyed by other tort defendants" that are explained extensively below. Moreover, to limit the fora in which a plaintiff may permissibly litigate a tort suit against the United States, Congress vested the federal district courts (as well as a small number of territorial courts) with exclusive jurisdiction over FTCA cases. Furthermore, because Congress believed "that juries would have difficulty viewing the United States as a defendant without being influenced by the fact that it has a deeper pocket than any other defendant," FTCA cases that proceed to trial are generally "tried by the court without a jury." Notably, the FTCA only authorizes tort lawsuits against the United States itself; it expressly shields individual federal employees from personal liability for torts that they commit within the scope of their employment. In other words, the FTCA "makes the remedy against the United States under the FTCA exclusive" of "any other civil action or proceeding for money damages" that might otherwise be available "against the employee whose act or omission gave rise to the claim." Congress prohibited courts from holding federal employees personally liable for torts committed within the scope of their employment in order to avert what Congress perceived as "an immediate crisis involving the prospect of personal liability and the threat of protracted personal tort litigation for the entire Federal workforce." Critically, the individual employee generally remains immune from tort liability for torts committed within the scope of his employment even if a provision of the FTCA forecloses the plaintiff from recovering monetary damages from the United States itself. As the following subsections of this report explain, determining whether the FTCA governs a particular tort case—and, thus, whether the FTCA shields the individual who committed the alleged tort from personal liability—requires the court to ask two threshold questions: (1) whether the individual who committed the tort was in fact a federal employee, and, if so, (2) whether that individual committed the tort within the scope of his office or employment. First, the FTCA only waives the United States's sovereign immunity as to torts committed by an " employee of the Government." Thus, if a plaintiff attempts to sue the United States for a tort committed by someone who is not a federal employee, the plaintiff's claim against the government will necessarily fail. For the purposes of the FTCA, the term "employee of the government" includes officers or employees of any federal agency; members of the military or naval forces of the United States; members of the National Guard while engaged in training or duty under certain provisions of federal law; persons acting on behalf of a federal agency in an official capacity; and officers and employees of a federal public defender organization (except when such employees are performing professional services in the course of providing representation to clients). As a result of this relatively broad definition of "employee," the FTCA effectively waives the government's immunity from torts committed by certain categories of persons who might not ordinarily be considered "employees" as a matter of common parlance. Because the FTCA applies only to torts committed by federal employees, the FTCA provision shielding federal employees from personal tort liability does not protect nonemployees. Thus, with certain caveats discussed below, a plaintiff injured by the tortious action of a nonemployee may potentially be able to sue that nonemployee individually under ordinary principles of state tort law, even though he could not sue the United States under the FTCA. Notably, the United States commonly hires independent contractors to carry out its governmental objectives. The FTCA, however, explicitly excludes independent contractors from the statutory definition of "employee." As a result, "the government cannot be held liable" under the FTCA "for torts committed by its independent contractors"; the plaintiff must instead attempt to seek compensation from the contractor itself. Different courts consider different sets of factors when evaluating whether an alleged tortfeasor is an independent contractor as opposed to a government employee. Most courts, however, hold that "the critical factor" when assessing whether a defendant is an employee or an independent contractor for the purposes of the FTCA is whether the federal government possesses the authority "to control the detailed physical performance of the contractor." "[A] contractor can be said to be an employee or agent of the United States within the intendment of the [FTCA] only where the Government has the power under the contract to supervise a contractor's day-to-day operations and to control the detailed physical performance of the contractor." Thus, to illustrate, courts have typically determined that certified registered nurse anesthetists (CRNAs) working for federal hospitals qualify as employees under the FTCA. These courts have justified that conclusion on the ground that CRNAs do not ordinarily enjoy broad discretion to exercise their independent judgment when administering anesthesia, but instead operate pursuant to the direct supervision and control of an operating surgeon or anesthesiologist working for the federal government. By contrast, courts have generally held that because physicians who provide medical services at facilities operated by the United States often operate relatively independently of the federal government's control, such physicians ordinarily qualify as "independent contractors, and not employees of the government for FTCA purposes." Because the FTCA's prohibition against suits by individual employees does not insulate independent contractors from liability, a plaintiff injured by the tortious action of an independent contractor working for the federal government may potentially be able to recover compensation directly from that contractor. Nevertheless, a plaintiff asserting a tort claim directly against a federal contractor may still encounter other obstacles to recovery. As the Supreme Court ruled in its 1988 decision in Boyle v. United Technologies Corp. , a plaintiff may not pursue state law tort claims against a government contractor if imposing such liability would either create "a 'significant conflict'" with "an identifiable 'federal policy or interest'" or "'frustrate specific objectives' of federal legislation." Several courts have therefore rejected tort claims against defense contractors on the ground that allowing such suits to proceed could undesirably interfere with military objectives. Courts have been less willing to extend Boyle immunity to nonmilitary contractors, however. As noted above, the FTCA applies only to torts that a federal employee commits "while acting within the scope of his office or employment." Thus, "[i]f a government employee acts outside the scope of his employment when engaging in tortious conduct, an action against the United States under the FTCA will not lie." Instead, the plaintiff may potentially "file a state-law tort action against the" employee who committed the tort, as the aforementioned protections from liability apply only when employees are acting within the scope of their employment. Courts determine whether a federal employee was acting within the scope of his employment at the time he committed an alleged tort by applying the law the state in which the tort occurred. Although the legal principles that govern the scope of a tortfeasor's employment vary from state to state, many states consider whether the employer hired the employee to perform the act in question and whether the employee undertook the allegedly tortious activity to promote the employer's interests. Two cases involving vehicular mishaps illustrate how courts perform the scope of employment inquiry in practice. In Barry v. Stevenson , for instance, two soldiers—one driver and one passenger—were returning to their headquarters in a government-owned Humvee military truck after completing a work assignment on a military base. The truck hit a dip in the trail, injuring the passenger. Because the driver "was engaged in annual Army National Guard training" and "driving a government vehicle . . . on government property" at the time of the accident, the court concluded that the driver "was acting within the course of his employment" as a federal officer "when the injury occurred." In Merlonghi v. United States , by contrast, a special agent employed by the Office of Export Enforcement (OEE) collided with a motorcyclist while driving home from work in a government vehicle. The agent and the motorcyclist had engaged in a verbal altercation and "swerved their vehicles back and forth towards each other" immediately prior to the collision. After brandishing a firearm at the motorcyclist, the agent sharply careened his vehicle into the motorcycle, throwing the motorcyclist to the ground and severely injuring him. The court determined that the agent "was not acting within the scope of his employment" at the time of the collision even though "he was driving a government vehicle and was on call." The court first observed that "engaging in a car chase while driving home from work [wa]s not the type of conduct that OEE hired [the agent] to perform." The court also emphasized that the agent "was not at work, responding to an emergency, or driving to a work assignment" at the time of the collision. The court further noted that the agent's actions were not "motivated . . . by a purpose to serve the employer," as the agent's "argument with [the motorcyclist] and the back-and-forth swerving leading to the altercation had nothing to do with an OEE assignment. His conduct related to personal travel and a personal confrontation." Because the agent "was not acting within the scope of his employment when he crashed into" the motorcyclist, the court ruled that the district court had correctly dismissed the motorcyclist's claims seeking compensation from the United States. Occasionally a plaintiff will file a tort suit against an individual without realizing that he is a federal employee. In such cases, the FTCA allows the Attorney General to certify "that the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose." If the Attorney General files such a certification, then the lawsuit is "deemed an action against the United States" under the FTCA; the employee is dismissed from the action, and the United States is substituted as defendant in the employee's place; and the case proceeds against the government in federal court. In such instances, the United States "remain[s] the federal defendant in the action unless and until the [d]istrict [c]ourt determines that the employee . . . engaged in conduct beyond the scope of his employment." By creating a mechanism by which the United States may substitute itself as the defendant in the individual employee's place, the FTCA effectively "immunize[s] covered federal employees not simply from liability, but from suit." In this way, the FTCA "relieve[s] covered employees from the cost and effort of defending the lawsuit" and instead places "those burdens on the Government's shoulders." In some cases, the Attorney General's decision to substitute the United States in the officer's place may adversely affect the plaintiff's chances of prevailing on his claims. Generally speaking, once the Attorney General certifies that the federal employee was acting within the scope of his employment when he committed the allegedly tortious act, "the FTCA's requirements, exceptions, and defenses apply to the suit." Depending on the circumstances, those requirements, exceptions, and defenses can "absolutely bar [the] plaintiff's case" against the United States, as explained in greater detail below. Moreover, the individual federal employee remains immune from liability even when the FTCA "precludes recovery against the Government" itself. Thus, under certain circumstances, the FTCA will shield both the United States and its employees from liability for its tortious actions, thereby effectively "leav[ing] certain tort victims without any remedy." "In such cases, to try to preserve their lawsuits" against the federal employee, the plaintiff may attempt to "contest the Attorney General's scope-of-employment certification." That is, the plaintiff may argue that the government employee defendant was not acting within the scope of his employment, such that the suit should therefore proceed against the government official in his personal capacity. If the court agrees that the employee was acting within the scope of employment at the time of the alleged tort, then "the suit becomes an action against the United States that is governed by the FTCA." If, however, the court disagrees with the Attorney General's determination, the suit may proceed against the government employee in his personal capacity. A plaintiff may, however, prefer to litigate against the United States rather than against an individual government employee, especially if the employee does not have enough money to satisfy a judgment that the court might ultimately render in the plaintiff's favor. Because government employees may be "under-insured or judgment proof," they may lack sufficient assets to "satisfy judgments rendered against them" in tort cases. Thus, oftentimes the plaintiff does not object when the Attorney General certifies that the named defendant was acting within the scope of his employment at the time of the alleged tort. If a plaintiff successfully obtains a judgment against the United States based on the tortious conduct of a federal employee, the government may not subsequently sue the culpable employee to recover the amount of money the government paid to the plaintiff. Consequently, if the government successfully substitutes itself for an individual defendant in an FTCA case, that substitution may effectively relieve the individual employee from all civil liability for his allegedly tortious action. Because this aspect of the FTCA is particularly favorable for government employees, if the Attorney General refuses to certify that an employee was acting within the scope of his employment, that employee may at any time before trial petition a federal district court for certification that he was acting within the scope of his employment for the purposes of the FTCA. If the court agrees that the employee was acting within the scope of his employment, then the case proceeds "against the Government, just as if the Attorney General had filed a certification." If, however, the court instead finds that the government employee was not acting within the scope of employment, then the lawsuit may proceed against the government employee in his personal capacity. As mentioned above, the FTCA imposes significant substantive limitations on the types of tort lawsuits a plaintiff may permissibly pursue against the United States. The Congress that enacted the FTCA, concerned about "unwarranted judicial intrusion[s] into areas of governmental operations and policymaking," opted to explicitly preserve the United States' sovereign immunity from more than a dozen categories of claims. Specifically, Section 2680 of the FTCA establishes the following exceptions preventing private litigants from pursuing the following categories of claims against the United States: "Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation . . . or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty"; "Any claim arising out of the loss, miscarriage, or negligent transmission of letters or postal matter"; certain claims arising from the actions of law enforcement officers administering customs and excise laws; certain admiralty claims against the United States for which federal law provides an alternative remedy; claims "arising out of an act or omission of any employee of the Government in administering" certain provisions of the Trading with the Enemy Act of 1917; "Any claim for damages caused by the imposition or establishment of a quarantine by the United States"; certain claims predicated upon intentional torts committed by federal employees; "Any claim for damages caused by the fiscal operations of the Treasury or by the regulation of the monetary system" ; "Any claim arising out of the combatant activities of the military or naval forces, or the Coast Guard, during time of war"; "Any claim arising in a foreign country"; "Any claim arising from the activities of the Tennessee Valley Authority"; "Any claim arising from the activities of the Panama Canal Company"; or "Any claim arising from the activities of a Federal land bank, a Federal intermediate credit bank, or a bank for cooperatives." Some of these exceptions are more doctrinally significant than others. The following sections of this report therefore discuss the most frequently litigated exceptions to the United States' waiver of immunity from tort claims. First, Section 2680(a) —which is "commonly called the discretionary function exception" —"preserves the federal government's immunity . . . when an employee's acts involve the exercise of judgment or choice." Along with being one of the most frequently litigated exceptions to the FTCA's waiver of sovereign immunity, the discretionary function exception is, according to at least one commentator, "the broadest and most consequential." For example, the United States has successfully invoked the discretionary function exception to avoid tort liability in cases involving exposures to radiation, asbestos, Agent Orange, and the human immunodeficiency virus (HIV). The discretionary function exception serves at least two purposes. First, the exception "prevent[s] judicial 'second-guessing' of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort." According to one commentator, the Congress that enacted the FTCA viewed such second guessing to be "inappropriate" because (1) "such judgments are more appropriately left to the political branches of our governmental system;" and (2) "courts, which specialize in the resolution of discrete factual and legal disputes," may not be "equipped to make broad policy judgments." Second, the discretionary function exception is intended to "protect the Government from liability that would seriously handicap efficient government operations." By insulating the government from liability for the discretionary actions of its employees, the discretionary function exception arguably decreases the likelihood that federal employees will shy away from making sound policy decisions based on a fear of increasing the government's exposure to tort liability. Relatedly, exposing the United States to liability for discretionary acts could cause government officials to "spend an inordinate amount of their tax-payer compensated time responding to lawsuits" rather than serving the "greater good of the community." The discretionary function exception thus "marks the boundary between Congress' willingness to impose tort liability upon the United States and its desire to protect certain governmental activities from exposure to suit by private individuals." As explained in greater detail in the following subsections, to determine whether the discretionary function exception bars a particular plaintiff's suit under the FTCA, courts examine whether the federal employee was engaged in conduct that was (1) discretionary and (2) policy-driven. "If the challenged conduct is both discretionary and policy-driven," then the FTCA does not waive the government's sovereign immunity with respect to that conduct, and the plaintiff's FTCA claim must therefore fail. If, by contrast, an official's action either (1) "does not involve any discretion" or (2) "involves discretion," but "does not involve the kind of discretion—consideration of public policy—that the exception was designed to protect," then the discretionary function exception does not bar the plaintiff's claim. When first evaluating whether "the conduct that is alleged to have caused the harm" to the plaintiff "can fairly be described as discretionary," a court must assess "whether the conduct at issue involves 'an element of judgment or choice' by the employee." "The conduct of federal employees is generally held to be discretionary unless 'a federal statute, regulation, or policy specifically prescribes a course of action for an employee to follow.'" If "the employee has no rightful option but to adhere to the directive" established by a federal statute, regulation, or policy, "then there is no discretion in the conduct for the discretionary function exception to protect." Put another way, the discretionary function exception does not insulate the United States from liability when its employees "act in violation of a statute or policy that specifically directs them to act otherwise." Even where a federal statute, regulation, or policy pertaining to the challenged action exists, however, the action may nonetheless qualify as discretionary if the law in question "predominately uses permissive rather than mandatory language." In other words, where "a government agent's performance of an obligation requires that agent to make judgment calls, the discretionary function exception" may bar the plaintiff's claim under the FTCA. Notably, "[t]he presence of a few, isolated provisions cast in mandatory language" in a federal statute, regulation, or policy "does not transform an otherwise suggestive set of guidelines into binding" law that will defeat the discretionary function exception. "Even when some provisions of a policy are mandatory, governmental action remains discretionary if all of the challenged decisions involved 'an element of judgment or choice.'" The Fourth Circuit's decision in Rich v. United States exemplifies how courts evaluate whether a federal employee has engaged in discretionary conduct. The plaintiff in Rich —a federal inmate who was stabbed by members of a prison gang—attempted to file an FTCA suit alleging that the Bureau of Prisons (BOP) should have housed him separately from the gang members. Federal law permitted—but did not affirmatively require—BOP "to separate certain inmates from others based on their past behavior." Because federal law empowered prison officials to "consider several factors and exercise independent judgment in determining whether inmates may require separation," the Rich court held that BOP's decision whether or not to separate an inmate from others was discretionary in nature and therefore outside the scope of the FTCA. By contrast, in the Supreme Court case of Berkovitz ex rel. Berkovitz v. United States , the discretionary function exception did not shield the United States from liability. The plaintiff in Berkovitz alleged that the federal government issued a license to a vaccine manufacturer "without first receiving data that the manufacturer must submit showing how the product . . . matched up against regulatory safety standards," as required by federal law. After the plaintiff allegedly contracted polio from a vaccine produced by that manufacturer, the plaintiff sued the United States under the FTCA. Because "a specific statutory and regulatory directive" divested the United States of any "discretion to issue a license without first receiving the required test data," the Court held that "the discretionary function exception impose[d] no bar" to the plaintiff's claim. Courts have disagreed regarding whether the discretionary function exception shields tortious conduct that allegedly violates the U.S. Constitution, as contrasted with a federal statute, regulation, or policy. Most courts have held that "the discretionary-function exception . . . does not shield decisions that exceed constitutional bounds, even if such decisions are imbued with policy considerations." These courts reason that "[t]he government 'has no "discretion" to violate the Federal Constitution; its dictates are absolute and imperative.'" By contrast, a minority of courts have instead concluded that the discretionary function exception shields actions "based upon [the] exercise of discretion" even if they are "constitutionally repugnant." These courts base that conclusion on the fact that the text of 28 U.S.C. § 2680(a) purports to shield discretionary judgments even when a government employee abuses his discretion. Still other courts have declined to take a side on this issue. If the allegedly tortious conduct that injured the plaintiff was discretionary, the court must then evaluate "whether the exercise or non-exercise of the granted discretion is actually or potentially influenced by policy considerations" —that is, whether the challenged action "implicate[s] social, economic, [or] policy judgments." As the Supreme Court has recognized, the discretionary function exception "protects . . . only governmental actions and decisions based on considerations of public policy." For instance, if a given decision requires a federal employee to "balance competing interests" —such as weighing the benefits of a particular public safety measure against that measure's financial costs —then that decision is likely susceptible to policy analysis within the meaning of the discretionary function exception. When applying the second prong of the discretionary function exception, courts employ an objective rather than a subjective standard. Courts therefore "do not examine . . . 'whether policy considerations were actually contemplated in making the decision'" —that is, "[t]he decision need not actually be grounded in policy considerations so long as it is, by its nature, susceptible to a policy analysis." Indeed, the discretionary function exception "applies 'even if the discretion has been exercised erroneously' and is deemed to have frustrated the relevant policy purpose." For that reason, whether the employee committed negligence in exercising his discretion "is irrelevant to the applicability of the discretionary function exception." Nor does it matter whether the allegedly tortious action was undertaken "by low-level government officials [or] by high-level policymakers." The nature of the conduct challenged by the plaintiff—as opposed to the status of the actor—governs whether the discretionary function exception applies in a given case. As long as the challenged conduct involves the exercise of discretion in furtherance of some policy goal, the discretionary function exception forecloses claims under the FTCA. If the first element of the discretionary function exception is satisfied, then courts will generally presume that the second element is satisfied as well. The Supreme Court has held that when an "established governmental policy, as expressed or implied by statute, regulation, or agency guidelines, allows a Government agent to exercise discretion, it must be presumed that the agent's acts are grounded in policy when exercising that discretion." Nevertheless, a plaintiff may rebut that presumption if "the challenged actions are not the kind of conduct that can be said to be grounded in the policy of the regulatory regime" at issue in the case. Courts assessing the applicability of the discretionary function exception utilize a "case-by-case approach. " Given the fact-intensive nature of the discretionary function inquiry, "deciding whether a government agent's action is susceptible to policy analysis is often challenging." Nevertheless, examples from the case law help illustrate which sorts of governmental actions are susceptible to policy analysis. For instance, in the Rich case discussed above, the court held that "prisoner placement and the handling of threats posed by inmates against one another are 'part and parcel of the inherently policy-laden endeavor of maintaining order and preserving security within our nation's prisons.'" The court explained that "factors such as available resources, proper classification of inmates, and appropriate security levels are 'inherently grounded in social, political, and economic policy.'" Accordingly, the court held that BOP's decision to house the plaintiff with inmates who ultimately attacked him was susceptible to policy analysis, such that the discretionary function exception shielded the United States from liability. By contrast, courts have held that decisions motivated solely by laziness or careless inattention "do not reflect the kind of considered judgment 'grounded in social, economic, and political policy'" that the discretionary function exception is intended to shield from judicial second-guessing. For example, the discretionary function exception does not shield "[a]n inspector's decision (motivated simply by laziness) to take a smoke break rather than inspect" a machine that malfunctions and injures the plaintiff, as a mere decision to act carelessly or slothfully "involves no element of choice or judgment grounded in policy considerations." Courts have similarly held that allowing toxic mold to grow on food served at the commissary on a naval base is not a decision influenced by "social, economic, or political policy," and that, as a result, the discretionary function exception does not bar a plaintiff sickened by that mold from suing the United States. Another important exception to the FTCA's waiver of sovereign immunity is known as the "intentional tort exception." An "intentional tort," as the name suggests, occurs "when the defendant acted with the intent to injure the plaintiff or with substantial certainty that his action would injure the plaintiff." A familiar example of an intentional tort is battery—that is, purposeful harmful or offensive physical contact with another person. Subject to a significant proviso discussed below, the intentional tort exception generally preserves the United States's immunity against claims arising out of assault; battery; false imprisonment; false arrest; malicious prosecution; abuse of process; libel; slander; misrepresentation; deceit; or interference with contract rights. As the Supreme Court has observed, however, this list "does not remove from the FTCA's waiver all intentional torts;" moreover, the list includes "certain torts . . . that may arise out of negligent"—and therefore unintentional—"conduct." Thus, while the phrase "intentional tort exception" provides a suitable "shorthand description" of the exception's scope, that moniker is, according to the High Court, "not entirely accurate." The FTCA's "legislative history contains scant commentary" discussing Congress's rationale for exempting these categories of torts from the FTCA's waiver of sovereign immunity. However, at least some Members of the Congress that first enacted the FTCA appeared to believe (1) that "it would be 'unjust' to make the government liable" for the intentional torts of its employees; and (2) that "exposing the public fisc to potential liability for assault, battery, and other listed torts would be 'dangerous,' based on the notion that these torts are both easy for plaintiffs to exaggerate and difficult to defend against." The intentional tort exception has shielded the United States from liability for serious acts of misconduct allegedly committed by federal officers. In a particularly high-profile example, a group of women who were allegedly sexually assaulted by naval officers at the 1991 Tailhook Convention sued the United States under the FTCA "for the sexual assaults and batteries allegedly perpetrated by Naval officers at the Convention social events." The court ultimately ruled that the intentional tort exception defeated the plaintiffs' claims against the United States, as the alleged sexual assaults constituted intentionally tortious acts. Critically, however, the intentional tort exception contains a carve-out known as the "law enforcement proviso" that renders the United States liable for certain intentional tort claims committed by "investigative or law enforcement officers of the United States Government." Congress added this proviso "in 1974 in response to widespread publicity over abuse of powers by federal law enforcement officers." Thus, although "private citizens are barred from bringing suit against federal employees for many intentional torts, they may nonetheless bring suit" against the United States for a subset of these torts "if the alleged act was committed by an 'investigative or law enforcement officer.'" Only the following torts fall within the law enforcement proviso's ambit: assault; battery; false imprisonment; false arrest; abuse of process; and malicious prosecution. The list of intentional torts that potentially qualify for the law enforcement proviso therefore contains "only half" of "the torts listed in the intentional tort exception." The proviso thereby only "waives immunity for the types of tort claims typically asserted against criminal law enforcement officers, while preserving immunity for other tort claims that are asserted more broadly against federal employees." To determine whether the proviso applies in any given case, the court must first assess whether the alleged tortfeasor qualifies as an "investigative or law enforcement officer[]." The FTCA defines that term to include "any officer of the United States who is empowered by law to" (1) "execute searches," (2) "seize evidence," or (3) "make arrests for violations of Federal law." Some courts have therefore concluded that the law enforcement proviso waives the United States's immunity only against claims for intentional torts committed by "criminal law enforcement officers," as contrasted with "federal employees who conduct only administrative searches" like Transportation Security Administration (TSA) screeners. Thus, as a general matter, the United States remains largely immune to claims arising from intentional torts committed by federal employees who are not criminal law enforcement officers. It is important to note that the law enforcement proviso waives the United States's immunity only for acts or omissions committed "while the officer is 'acting within the scope of his office or employment.'" The underlying tort need not arise while the officer is executing searches, seizing evidence, or making arrests; so long as the officer is "act[ing] within the scope of his or her employment" at the time the tort arises, "the waiver of sovereign immunity holds." In other words, the waiver of sovereign immunity "effected by the law enforcement proviso extends to acts or omissions of law enforcement officers that arise within the scope of their employment, regardless of whether the officers are engaged in investigative or law enforcement activity" at the time they commit the allegedly tortious act. To illustrate, the Supreme Court has held that the intentional tort exception will not necessarily bar a federal prisoner's claim "that correctional officers sexually assaulted . . . him while he was in their custody." Assuming that the correctional officers qualified as law enforcement officers within the meaning of the FTCA and were acting within the scope of their employment at the time of the alleged assault, the Court concluded that the law enforcement proviso rendered the intentional tort exception inapplicable even if the correctional officers were not specifically engaged in investigative or law enforcement activity during the assault itself. As the name suggests, the "foreign country exception" to the FTCA preserves the United States' sovereign immunity against "any claim arising in a foreign country." The Supreme Court has interpreted this exception to "bar[] all claims based on any injury suffered in a foreign country, regardless of where the tortious act or omission occurred ." The exception therefore "ensure[s] that the United States is not exposed to excessive liability under the laws of a foreign country over which it has no control," as could potentially occur if the United States made itself liable to the same extent as any private citizen who commits a tort in that country. The recent case of S.H. ex rel. Holt v. United States illustrates how courts apply the foreign country exception in practice. In that case, a family attempted to sue the United States pursuant to the FTCA, alleging that U.S. Air Force (USAF) officials in California "negligently approved the family's request for command-sponsored travel to a [USAF] base in Spain" with substandard medical facilities. When the mother ultimately gave birth prematurely in Spain, her daughter was injured during birth. After the family returned to the United States, American doctors diagnosed the daughter with cerebral palsy resulting from her premature birth. The court concluded that, because the daughter's "cerebral palsy resulted from the brain injury she sustained in Spain," the foreign country exception barred the family's FTCA claim even though doctors did not diagnose the daughter with cerebral palsy until after the family returned the United States. To support its conclusion, the court reasoned that, for the purposes of the foreign country exception, "an injury is suffered where the harm first 'impinge[s]' upon the body, even if it is later diagnosed elsewhere." Finally, two exceptions—one created by Congress, one created by the Supreme Court—preserve the federal government's immunity as to certain torts arising from the United States' military activities. The first such exception, codified at 28 U.S.C. § 2680(j), preserves the United States' immunity from "[a]ny claim arising out of the combatant activities of the military or naval forces, or the Coast Guard, during time of war." Although the FTCA's legislative history casts little light on the purpose and intended scope of the combatant activities exception, courts have generally inferred that "the policy embodied by the combatant activities exception is . . . to preempt state or foreign regulation of federal wartime conduct and to free military commanders from the doubts and uncertainty inherent in potential subjection to civil suit." The 1996 case of Clark v. United States illustrates how the combatant activities exception operates in practice. The plaintiff in Clark —a U.S. army sergeant who served in Saudi Arabia during Operation Desert Storm—conceived a child with his wife after he returned home to the United States. After the child manifested serious birth defects, the sergeant sued the United States, claiming that his "exposure to the toxins he encountered while serving in Saudi Arabia" during Operation Desert Storm "combined with the medications and shots he received from the U.S. Army" caused his child to be born with significant injuries. The court concluded that, because a state of war existed during Operation Desert Storm, the sergeant's claims arose "out of wartime activities by the military" and were therefore barred by the combatant activities exception. In addition to the exceptions to liability explicitly enumerated in Section 2680, the Supreme Court has also articulated an additional exception to the United States' waiver of sovereign immunity known as the Feres doctrine. That doctrine derives its name from the 1950 case Feres v. United States , in which several active duty servicemembers (or their executors) attempted to assert a variety of tort claims against the United States. The executor for one of the servicemembers who died in a fire at a military facility, for instance, claimed that the United States had negligently caused the servicemember's death by "quartering him in barracks known or which should have been known to be unsafe because of a defective heating plant" and by "failing to maintain an adequate fire watch." The second plaintiff claimed that an Army surgeon negligently left a 30-by-18-inch towel in his stomach during an abdominal operation. The executor of a third servicemember alleged that army surgeons administered "negligent and unskillful medical treatment" that resulted in the servicemember's death. The Supreme Court dismissed all three claims, holding "that the Government is not liable under the [FTCA] for injuries to [military] servicemen where the injuries arise out of or are in the course of activity incident to [military] service." The Feres doctrine thus "applies broadly" to render the United States immune from tort liability resulting from virtually "all injuries suffered by military personnel that are even remotely related to the individual's status as a member of the military." For instance, courts have frequently barred active duty servicemembers from suing the United States for medical malpractice allegedly committed by military doctors. Notably, the Feres doctrine is not explicitly codified in the FTCA . Instead, courts have justified Feres on the ground that subjecting the United States to liability for tort claims arising out of military service could "disrupt the unique hierarchical and disciplinary structure of the military." According to the Supreme Court, "complex, subtle, and professional decisions as to the composition, training, and . . . control of a military force are essentially professional military judgments." In the Supreme Court's view, requiring federal courts to adjudicate "suits brought by service members against the Government for injuries incurred incident to service" would thereby embroil "the judiciary in sensitive military affairs at the expense of military discipline and effectiveness." As discussed in greater detail below, the Feres doctrine has been the subject of significant debate. Nonetheless, the Supreme Court has reaffirmed or expanded Feres on several occasions despite opportunities and invitations to overturn or confine its holding. Most recently, on May 20, 2019, the Court denied a petition asking the court to overrule Feres with respect to certain types of medical malpractice claims. Although the Supreme Court has stated that Congress may abrogate or modify Feres by amending the FTCA if it so chooses, Congress has not yet opted to do so. Apart from the exceptions to the United States' waiver of sovereign immunity discussed above, the FTCA may also limit a plaintiff's ability to obtain compensation from the federal government in other ways. Although, as a general matter, the damages that a plaintiff may recover in an FTCA suit are typically determined by the law of the state in which the tort occurred, the FTCA imposes several restrictions on the types and amount of damages that a litigant may recover. With few exceptions, plaintiffs may not recover punitive damages or prejudgment interest against the United States. The FTCA likewise bars most awards of attorney's fees against the government. Furthermore, with limited exceptions, an FTCA plaintiff may not recover any damages that exceed the amount he initially requested when he submitted his claim to the applicable agency to satisfy the FTCA's exhaustion requirement, which this report discusses below. "[T]he underlying purpose of" requiring the plaintiff to specify the maximum amount of damages he seeks "is to put the government on notice of its maximum potential exposure to liability" and thereby "make intelligent settlement decisions." Critically, however, a plaintiff can potentially recover damages in excess of the amount he initially requested if the plaintiff can demonstrate "intervening facts" or "newly discovered evidence not reasonably discoverable at the time of presenting the claim to the federal agency" that warrant a larger award. In addition to the aforementioned substantive limitations on a plaintiff's ability to pursue a tort lawsuit against the United States, Congress has also established an array of procedural requirements a plaintiff must satisfy in order to validly invoke the FTCA. Most significantly, the FTCA contains statute-of-limitations and exhaustion provisions that limit when a plaintiff may permissibly file a tort lawsuit against the United States. For one, with certain exceptions, a plaintiff may not institute an FTCA action against the United States unless (1) the plaintiff has first "presented the claim to the appropriate Federal agency" whose employees are responsible for the plaintiff's alleged injury, and (2) that agency has "finally denied" the plaintiff's claim. These administrative exhaustion requirements afford federal agencies an opportunity to settle disputes before engaging in formal litigation in the federal courts. "[E]ncouraging settlement of tort claims within administrative agencies" in this manner arguably "reduce[s] court congestion and avoid[s] unnecessary litigation." Because litigation can be costly and time-consuming, "the settlement of claims within administrative agencies" arguably not only "benefits FTCA claimants by permitting them to forego the expense of full-blown litigation," but also "frees up limited [governmental] resources for more pressing matters." A claimant ordinarily has two years from the date of his injury to present a written notification of his FTCA claim "to the Federal agency whose activities gave rise to the claim." This written notification must "sufficiently describ[e] the injury to enable the agency to begin its own investigation." Once the agency receives such notice, it may either settle the claim or deny it. With limited exceptions, if the claimant fails to submit an administrative claim within the two-year time limit, then "his 'tort claim against the United States shall be forever barred.'" As a general rule, a plaintiff must "exhaust his administrative remedies prior to filing suit"; a plaintiff usually cannot file an FTCA lawsuit and then cure his failure to comply with the exhaustion requirement by belatedly submitting an administrative claim. If, after the claimant submits his claim to the relevant administrative agency, the claimant and the agency agree on a mutually acceptable settlement, no further litigation occurs. Statistics suggest that "[t]he majority of FTCA . . . claims are resolved on the administrative level and do not go to litigation." If the agency does not agree to settle the claim, however, the agency may deny the claim by "mailing, by certified or registered mail, . . . notice of final denial of the claim" to the claimant. If no administrative settlement occurs, a claimant's right to a judicial determination "is preserved and the claimant may file suit in federal court." The claimant typically has six months from the date the agency mails its denial to initiate an FTCA lawsuit against the United States in federal court if he so chooses. With limited exceptions, if the plaintiff does not file suit before this six-month deadline, his claim against the United States will be "forever barred." If a federal agency does not promptly decide whether to settle or deny claims that claimants have presented to them, the FTCA establishes a mechanism for constructive exhaustion to prevent claims from being consigned to administrative limbo while the claimant awaits the agency's decision. Pursuant to Section 2675(a) of the FTCA, "[t]he failure of an agency to make final disposition of a claim within six months after it is filed shall, at the option of the claimant any time thereafter, be deemed a final denial of the claim for purposes of" the FTCA's exhaustion requirement. Thus, under these limited circumstances, Section 2675(a) authorizes a plaintiff to file an FTCA suit against the United States even before the agency has formally denied his administrative claim. Since Congress first enacted the FTCA in 1946, the federal courts have developed a robust body of judicial precedent interpreting the statute. In recent decades, however, the Supreme Court has rejected several invitations by litigants to modify its long-standing doctrines governing the FTCA's application. In doing so, the Court has expressed reluctance to revisit settled FTCA precedents in the absence of congressional action. Thus, if Congress disapproves of some or all of the legal principles that currently govern FTCA cases, legislative action may be necessary to change the governing standards. Some observers have advocated a variety of modifications to the FTCA. Recent legislative proposals to alter the FTCA have included, among other things, carving out certain categories of claims, cases, or plaintiffs to which the FTCA does not apply; expanding or narrowing the FTCA's definition of "employee" —which, as discussed above, is presently relatively broad, but does not include independent contractors; and amending 28 U.S.C. § 2680 to create new exceptions to the federal government's waiver of sovereign immunity—or, alternatively, to broaden, narrow, or eliminate existing exceptions. Proposals to change the FTCA's substantive standards implicate policy questions that Congress may wish to consider. On one hand, broadening the FTCA's waiver of sovereign immunity could enable a larger number of victims of government wrongdoing to obtain recourse through the federal courts, but could concomitantly increase the total amount of money the United States must pay to tort claimants each year and exacerbate "concerns . . . about . . . the impact that extensive litigation might have on the ability of government officials to focus on and perform their other duties." Conversely, narrowing the FTCA's immunity waiver could result in a larger number of private individuals bearing the costs of government employee misfeasance, but could result in a cost savings to the United States and decrease the potential for judicial interference with federal operations. One particular proposal to amend the FTCA that has captured a relatively substantial amount of congressional attention is abrogating or narrowing the Feres doctrine. As discussed above, the Feres doctrine shields the federal government from liability "for injuries to servicemen where the injuries arise out of or are in the course of activity incident to [military] service." Opponents of Feres argue that the doctrine inappropriately bars servicemembers from obtaining recourse for their injuries. Critics maintain that Feres 's bar on FTCA suits creates especially unjust results with respect to servicemembers who suffer injuries in military hospitals and servicemembers who are victims of sexual abuse, as those types of tortious actions are far removed from the core functions of the military. Some Members of Congress, judges, and legal commentators have therefore advocated eliminating or narrowing the Feres doctrine to allow servicemembers to pursue certain tort claims against the United States under the FTCA. Supporters of Feres , by contrast, have instead urged Congress to retain the Feres doctrine in its current form. These commentators contend "that the abolition of the Feres doctrine would lead to intra-military lawsuits that would have a very adverse effect on military order, discipline and effectiveness." Supporters further maintain that entertaining tort suits by servicemembers against the United States would increase the government's exposure to monetary liability. Some who support the Feres doctrine argue that even though Feres bars servicemembers from suing the United States under the FTCA for injuries they sustain incident to military service, Feres does not necessarily leave servicemembers without any remedy whatsoever; depending on the circumstances, injured servicemembers may be entitled to certain benefits under other federal statutes. Congress has periodically held hearings to assess whether to retain, abrogate, or modify the Feres doctrine. The House Armed Services Committee's Subcommittee on Military Personnel conducted the most recent of those hearings on April 30, 2019. If Congress desires to authorize servicemembers to prosecute tort lawsuits against the United States, it has several options. For example, Congress could abolish Feres in its entirety and allow servicemembers to file tort suits against the United States subject to the same exceptions and prerequisites that govern FTCA lawsuits initiated by nonservicemembers. Alternatively, instead of abrogating Feres entirely, Congress could allow servicemembers to sue the United States for only certain injuries arising from military service, such as injuries resulting from medical malpractice. As an alternative to authorizing full-fledged litigation against the United States in federal court, Congress could also create alternative compensation mechanisms intended to provide relief to injured servicemembers whose claims would otherwise be barred by Feres . Such alternative compensation procedures could, for example, resemble the alternative compensation scheme Congress established for persons injured by vaccines. To that end, Congress has periodically introduced bills proposing to modify the Feres doctrine. Most recently, several Members of the 116th Congress cosponsored the Sfc. Richard Stayskal Military Medical Accountability Act of 2019 ( H.R. 2422 ), which would authorize "member[s] of the Armed Forces of the United States" to bring claims "against the United States under [the FTCA] for damages . . . arising out of a negligent or wrongful act or omission in the performance of medical, dental, or related health care functions" rendered at certain military medical treatment facilities under specified conditions. In addition to proposals to modify the FTCA itself, Congress retains the authority to enact private legislation to compensate individual tort victims who would otherwise be barred from obtaining recourse from the United States under the FTCA in its current form. Although, as explained above, Congress enacted the FTCA in part to eliminate the need to pass private bills in order to compensate persons injured by the federal government, Congress still retains some authority to pass private bills if it so desires. Thus, rather than amend the FTCA to expand the universe of circumstances in which the United States will be liable to tort claimants, some have suggested that Congress should pass individual private bills to compensate particular injured persons or groups of persons who might otherwise lack recourse under the FTCA. To that end, Congress has occasionally "provided compensation [to plaintiffs] in situations where the courts have found that the FTCA waiver of immunity provides no relief."
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A plaintiff injured by a defendant's wrongful act may file a tort lawsuit to recover money from that defendant. To name a particularly familiar example, a person who negligently causes a vehicular collision may be liable to the victim of that crash. By forcing people who wrongfully injure others to pay money to their victims, the tort system serves at least two functions: (1) deterring people from injuring others and (2) compensating those who are injured. Employees and officers of the federal government occasionally commit torts just like other members of the general public. For a substantial portion of this nation's history, however, plaintiffs injured by the tortious acts of a federal officer or employee were barred from filing lawsuits against the United States by "sovereign immunity"—a legal doctrine that ordinarily prohibits private citizens from haling a sovereign state into court without its consent. Until the mid-20th century, a tort victim could obtain compensation from the United States only by persuading Congress to pass a private bill compensating him for his loss. Congress, deeming this state of affairs unacceptable, enacted the Federal Tort Claims Act (FTCA), which authorizes plaintiffs to obtain compensation from the United States for the torts of its employees. However, subjecting the federal government to tort liability not only creates a financial cost to the United States, it also creates a risk that government officials may inappropriately base their decisions not on socially desirable policy objectives, but rather on the desire to reduce the government's exposure to monetary damages. In an attempt to mitigate these potential negative effects of abrogating the government's immunity from liability and litigation, the FTCA limits the circumstances in which a plaintiff may pursue a tort lawsuit against the United States. For example, the FTCA contains several exceptions that categorically bar plaintiffs from recovering tort damages in certain categories of cases. Federal law also restricts the types and amount of damages a victorious plaintiff may recover in an FTCA suit. Additionally, a plaintiff may not initiate an FTCA lawsuit unless he has timely complied with a series of procedural requirements, such as providing the government an initial opportunity to evaluate the plaintiff's claim and decide whether to settle it before the case proceeds to federal court. Since Congress first enacted the FTCA, the federal courts have developed a robust body of judicial precedent interpreting the statute's contours. In recent years, however, the Supreme Court has expressed reluctance to reconsider its long-standing FTCA precedents, thereby leaving the task of further developing the FTCA to Congress. Some Members of Congress have accordingly proposed legislation to modify the FTCA in various respects, such as by broadening the circumstances in which a plaintiff may hold the United States liable for torts committed by government employees.
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The Federal Communications Commission (FCC) is an independent federal agency, with its five members appointed by the President, subject to confirmation by the Senate. It was established by the Communications Act of 1934 (1934 Act, or "Communications Act") and is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The mission of the FCC is to ensure that the American people have available, "without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges." The 1934 Act is divided into titles and sections that describe various powers and concerns of the commission. Title I—FCC Administration and Powers. The 1934 Act originally called for a commission consisting of seven members, but that number was reduced to five in 1983. Commissioners are appointed by the President and approved by the Senate to serve five-year terms; the President designates one member to serve as chairman. Title II—Common carrier regulation, primarily telephone regulation, including circuit-switched telephone services offered by cable companies. Common carriers are communication companies that provide facilities for transmission but do not originate messages, such as telephone and microwave providers. The 1934 Act limits FCC regulation to interstate and international common carriers, although a joint federal-state board coordinates regulation between the FCC and state regulatory commissions. Title III—Broadcast station requirements. Much existing broadcast regulation was established prior to 1934 by the Federal Radio Commission, and most provisions of the Radio Act of 1927 were subsumed into Title III of the 1934 Act. Title IV—Procedural and administrative provisions, such as hearings, joint boards, judicial review of the FCC's orders, petitions, and inquiries. Title V—Penal provisions and forfeitures, such as violations of rules and regulations. Title VI—Cable communications, such as the use of cable channels and cable ownership restrictions, franchising, and video programming services provided by telephone companies. Title VII—Miscellaneous provisions and powers, such as war powers of the President, closed captioning of public service announcements, and telecommunications development fund. The FCC is directed by five commissioners appointed by the President and confirmed by the Senate for five-year terms (except when filling an unexpired term). The President designates one of the commissioners to serve as chairperson. Three commissioners may be members of the same political party as the President and none can have a financial interest in any commission-related business. Ajit Pai, Chair (originally sworn in on May 14, 2012; designated chairman by President Trump in January 2017 and confirmed by the Senate for a second term on October 2, 2017); Michael O'Rielly (sworn in for a second term on January 29, 2015); Brendan Carr (sworn in on August 11, 2017); Jessica Rosenworcel (sworn in on August 11, 2017); and Geoffrey Starks (sworn in on January 30, 2019). The day-to-day functions of the FCC are carried out by 7 bureaus and 10 offices. The current basic structure of the FCC was established in 2002 as part of the agency's effort to better reflect the industries it regulates. The seventh bureau, the Public Safety and Homeland Security Bureau, was established in 2006, largely in response to Hurricane Katrina. The bureaus process applications for licenses and other filings, analyze complaints, conduct investigations, develop and implement regulatory programs, and participate in hearings, among other things. The offices provide support services. Bureaus and offices often collaborate when addressing FCC issues. The bureaus hold the following responsibilities: Consumer and Governmental Affairs Bureau—Develops and implements consumer policies, including disability access and policies affecting Tribal nations. The Bureau serves as the public face of the Commission through outreach and education, as well as responding to consumer inquiries and informal complaints. The Bureau also maintains collaborative partnerships with state, local, and tribal governments in such critical areas as emergency preparedness and implementation of new technologies. In addition, the Bureau's Disability Rights Office provides expert policy and compliance advice on accessibility with respect to various forms of communications for persons with disabilities. Enforcement Bureau—Enforces the Communications Act and the FCC's rules. It protects consumers, ensures efficient use of spectrum, furthers public safety, promotes competition, resolves intercarrier disputes, and protects the integrity of FCC programs and activities from fraud, waste, and abuse. International Bureau—Administers the FCC's international telecommunications and satellite programs and policies, including licensing and regulatory functions. The Bureau promotes pro-competitive policies abroad, coordinating the FCC's global spectrum activities and advocating U.S. interests in international communications and competition. The Bureau works to promote high-quality, reliable, interconnected, and interoperable communications infrastructure on a global scale. Media Bureau—Recommends, develops, and administers the policy and licensing programs relating to electronic media, including broadcast, cable, and satellite television in the United States and its territories. Public Safety and Homeland Security Bureau—Develops and implements policies and programs to strengthen public safety communications, homeland security, national security, emergency management and preparedness, disaster management, and network reliability. These efforts include rulemaking proceedings that promote more efficient use of public safety spectrum, improve public alerting mechanisms, enhance the nation's 911 emergency calling system, and establish frameworks for communications prioritization during crisis. The Bureau also maintains 24/7 operations capability and promotes Commission preparedness to assist the public, first responders, the communications industry, and all levels of government in responding to emergencies and major disasters where reliable public safety communications are essential. Wireless Telecommunications Bureau—Responsible for wireless telecommunications programs and policies in the United States and its territories, including licensing and regulatory functions. Wireless communications services include cellular, paging, personal communications, mobile broadband, and other radio services used by businesses and private citizens. Wireline Competition Bureau—Develops, recommends, and implements policies and programs for wireline telecommunications, including fixed (as opposed to mobile) broadband and telephone landlines, striving to promote the widespread development and availability of these services. The Bureau has primary responsibility for the Universal Service Fund which helps connect all Americans to communications networks. The offices hold the following responsibilities: Administrative Law Judges—Composed of one judge (and associated staff) who presides over hearings and issues decisions on matters referred by the FCC. Communications Business Opportunities—Promotes competition and innovation in the provision and ownership of telecommunications services by supporting opportunities for small businesses as well as women and minority-owned communications businesses. Economics and Analytics—Responsible for expanding and deepening the use of economic analysis into Commission policymaking, for enhancing the development and use of auctions, and for implementing consistent and effective agency-wide data practices and policies. The Office also manages the FCC's auctions in support of and in coordination with the FCC's Bureaus and Offices. In January 2019, the FCC voted along party lines to eliminate the Office of Strategic Planning and Policy Analysis and replace it with the Office of Economics and Analytics. Engineering and Technology—Advises the FCC on technical and engineering matters. This Office develops and administers FCC decisions regarding spectrum allocations and grants equipment authorizations and experimental licenses. General Counsel—Serves as the FCC's chief legal advisor and representative. Inspector General—Conducts and supervises audits and investigations relating to FCC programs and operations. Legislative Affairs—Serves as the liaison between the FCC and Congress, as well as other federal agencies. Managing Director—Administers and manages the FCC. Media Relations—Informs the media of FCC decisions and serves as the FCC's main point of contact with the media. Workplace Diversity—Ensures that FCC provides employment opportunities for all persons regardless of race, color, sex, national origin, religion, age, disability, or sexual orientation. Additionally, an FCC Secretary serves to preserve the integrity of the FCC's records, oversee the receipt and distribution of documents filed by the public through electronic and paper filing systems, and give effective legal notice of FCC decisions by publishing them in the Federal Register and the FCC Record . The current FCC Strategic Plan covers the five-year period FY2018-FY2022. The plan outlines four goals: Closing the Digital Divide—Broadband is acknowledged as being critical to economic opportunity, but broadband is unavailable or unaffordable in many parts of the country. The FCC is to seek to help close the digital divide, bring down the cost of broadband deployment, and create incentives for providers to connect consumers in hard-to-serve areas. Promoting Innovation—Fostering a competitive, dynamic, and innovative market for communications services is a key priority for the FCC. The FCC plans to promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment. Protecting Consumers and Public Safety—Serving the broader public interest is the FCC's core mission. The FCC plans to work to combat unwanted and unlawful robocalls, make communications accessible for people with disabilities, and protect public safety (e.g., ensuring delivery of 9-1-1 calls, restoring communications after disasters). Reforming the FCC's Processes—One of the chairman's top priorities has been to implement process reforms to make the work of the FCC more transparent, open, and accountable to the public. The FCC plans to modernize and streamline its operations and programs to improve decisionmaking, build consensus, and reduce regulatory burdens. The FCC has identified performance objectives associated with each strategic goal. Commission management annually develops targets and measures related to each performance goal to provide direction toward accomplishing those goals. Targets and measures are published in the FCC's Performance Plan, and submitted with the commission's annual budget request to Congress. Results of the commission's efforts to meet its goals, targets, and measures are found in the FCC's Annual Performance Report published each February. The FCC also issues a Summary of Performance and Financial Results every February, providing a concise, citizen-focused review of the agency's accomplishments. Since the 110 th Congress, the FCC has been funded through the House and Senate Financial Services and General Government (FSGG) appropriations bill as a single line item. Previously, it was funded through what is now the Commerce, Justice, Science appropriations bill, also as a single line item. The FCC annually collects and retains regulatory fees to offset costs incurred by the agency and to carry out its functions. Since 2009 the FCC's budget has been derived from regulatory fees collected by the agency rather than through a direct appropriation. The fees, often referred to as "Section (9) fees," are collected from license holders and certain other entities (e.g., cable television systems). The regulatory fees do not apply to governmental entities, amateur radio operator licensees, nonprofit entities, and certain other non-commercial entities. The FCC is authorized to review the regulatory fees each year and adjust them to reflect changes in its appropriation from year to year. The Commission originally implemented the Regulatory Fee Collection Program by rulemaking on July 18, 1994. The most recent regulatory fee order was released by the Commission on August 29, 2018. The FCC's budgets from FY2010 to FY2020 are in Figure 1 . On March 23, 2018, the Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018 (the "RAY BAUM'S Act" or "2018 Act") became law as part of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ). The 2018 Act requires the FCC to transfer all excess collections for FY2018 and prior years to the General Fund of the U.S. Treasury for the sole purpose of deficit reduction. The 2018 Act also requires the Commission to transfer any excess collections in FY2019 and in subsequent years to the General Fund of the U.S. Treasury for the sole purpose of deficit reduction. On October 1, 2018, the Commission transferred over $9 million in excess collections from FY2018 as well as approximately $112 million in excess collections from FY2017 and prior years to the General Fund of the U.S. Treasury. For FY2020, the FCC has requested $335,660,000 in budget authority from regulatory fee offsetting collections. This is $3,950,000 less than the authorization level of $339,610,000 included in the 2018 FCC Reauthorization in the Consolidated Appropriations Act, 2018. The FY2020 FCC request also represents a decrease of $3,340,000, or about 1.0%, from the FY2019 appropriated level of $339,000,000. The FCC requested $132,538,680 in budget authority for the spectrum auctions program. For FY2019, Congress appropriated a cap of $130,284,000 for the spectrum auctions program, which included additional funds to implement the requirements of the 2018 Act that mandated significant additional work for the FCC related to the TV Broadcaster Relocation Fund. The Commission's FY2020 budget request of $132,538,680 for this program would be an increase of $2,254,680, or 1.7%, over the FY2019 appropriation. This level of funding is intended to enable the Commission to continue its efforts to: reimburse full power and Class A stations, multichannel video programming distributors, Low Power TV, TV translator, and FM stations for reasonable costs incurred as a result of the Commission's incentive auction; make more spectrum available for 5G; and educate consumers affected by the reorganization of broadcast television spectrum. To date, the Commission's spectrum auctions program has generated over $114.6 billion for government use; at the same time, the total cost of the auctions program has been less than $2.0 billion, or less than 1.7% of the total auctions' revenue. Through the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), the FCC was reauthorized for the first time since 1990 (FCC Authorization Act of 1990, P.L. 101-396 ). The FCC publishes four periodic reports for Congress. Strategic Plan. The Strategic Plan is the framework around which the FCC develops its yearly Performance Plan and Performance Budget. The FCC submitted its current four-year Strategic Plan for 2018-2022 in February 2018, in accordance with the Government Performance and Results Modernization Act of 2010, P.L. 111-352 . Performance Budget. The annual Performance Budget includes performance targets based on the FCC's strategic goals and objectives, and serves as the guide for implementing the Strategic Plan. The Performance Budget becomes part of the President's annual budget request. Agency Financial Report. The annual Agency Financial Report contains financial and other information, such as a financial discussion and analysis of the agency's status, financial statements, and audit reports. Annual Performance Report. At the end of the fiscal year, the FCC publishes an Annual Performance Report that compares the agency's actual performance with its targets. All of these reports are available on the FCC website, https://www.fcc.gov/about/strategic-plans-budget . One FCC-related hearing has been held in the 116 th Congress. On April 3, 2019, the House Committee on Appropriations Subcommittee on Financial Services and General Government held a hearing on the FY2020 FCC budget. The hearing addressed issues including 5G deployment, federal preemption of state and local tower siting requirements, merger reviews, robocalls, and net neutrality. No bills that would affect the operation of the FCC have been introduced in the 116 th Congress. The FCC operates under a public interest mandate first laid out in the 1927 Radio Act (P.L. 632, 69 th Congress), but how this mandate is applied depends on which of two regulatory philosophies is relied upon to interpret it. The first seeks to protect and benefit the public at large through regulation, while the second seeks to achieve the same goals through the promotion of market efficiency. Additionally, Congress granted the FCC wide latitude and flexibility to revise its interpretation of the public interest standard to reflect changing circumstances, and the agency has not defined it in more concrete terms. These circumstances, paired with changes in FCC leadership, have led to significant changes over time in how the FCC regulates the broadcast and telecommunications industries. This evolution can be illustrated in changes to the agency's strategic goals under former Chairman Tom Wheeler to current Chairman Ajit Pai, which, in turn, led to the repeal in 2017 of the FCC's 2015 net neutrality rules and to changes in the agency's structure in 2019. The FCC's strategic goals are set forth in its quadrennial Strategic Plan. How these goals change from one plan to the next can illustrate how the priorities of the commission change over time, especially when there is a change in the political majority of the commission and therefore, the political party of the chairman. Table 1 outlines the strategic goals of Chairman Wheeler in the FY2015-FY2018 Strategic Plan compared to those of Chairman Pai in the FY2018-FY2022 Strategic Plan. Chairman Wheeler was a proponent of protecting and benefitting the public through regulation. His support of this regulatory philosophy can be seen in the language used in the strategic goals, such as the "rights of users" and the "responsibilities of network providers." Another example can be seen in the following language: "The FCC has a responsibility to promote the expansion of these networks and to ensure they have the incentive and the ability to compete fairly with one another in providing broadband services." On the other hand, Chairman Pai speaks about protecting and benefitting the public through the promotion of market incentives and efficiency. His support of this regulatory philosophy can be seen in the language used in the strategic goals, such as "reducing regulatory burdens" and ensuring that "regulations reflect the realities of the current marketplace, promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment." The use of this particular language may seem somewhat vague, but within the context of the net neutrality debate, discussed below, and the replacement of the Office of Strategic Planning and Policy Analysis with the Office of Economics and Analytics, those words take on more specific meaning, each intending to support the policy agenda of the Chairman. Net neutrality is arguably the highest profile issue illustrating the two regulatory philosophies described above. Chairman Pai had long maintained that the FCC under Chairman Wheeler had overstepped its bounds, expressing confidence that the 2015 Wheeler-era net neutrality rules would be undone, calling them "unnecessary regulations that hold back investment and innovation." Although the net neutrality debate originated in 2005, the 2015 Open Internet Order, implemented under the leadership of Chairman Wheeler, and the 2017 Order overturning those rules, promulgated under Chairman Pai, are the most recent. These two orders can be used to illustrate the contrast between the regulatory philosophies of the two chairmen: Some policymakers contend that more proscriptive regulations, such as those contained in the FCC's 2015 Open Internet Order (2015 Order), are necessary to protect the marketplace from potential abuses which could threaten the net neutrality concept. Others contend that existing laws and the current, less restrictive approach, contained in the FCC's 2017 Restoring Internet Freedom Order (2017 Order), provide a more suitable framework. Net neutrality continues to be a highly politicized issue, with most FCC action being approved along party lines. In January 2019, the FCC voted along party lines to eliminate the Office of Strategic Planning and Policy Analysis and replace it with a new Office of Economics and Analytics. The Office of Strategic Planning and Policy Analysis (OSP) was created in 2005, replacing the Office of Plans and Policy. OSP had been charged with "providing advice to the chairman, commissioners, bureaus, and offices; developing strategic plans; identifying the agency's policy objectives; and providing research, advice, and analysis of advanced, novel, and nontraditional communications issues." It had also been the home of the Chief Economist and Chief Technologist. The new Office of Economics and Analytics is "responsible for expanding and deepening the use of economic analysis into FCC policy making, for enhancing the development and use of auctions, and for implementing consistent and effective agency-wide data practices and policies." This new office reflects the goals in the current strategic plan: We will modernize and streamline the FCC's operations and programs to … reduce regulatory burdens…. A key priority [is to] … ensure that the FCC's actions and regulations reflect the realities of the current marketplace … and remove barriers to entry and investment. As the FCC continues to conduct its business into the future, the changing regulatory philosophies of the FCC chairmen may continue to drive how the FCC defines its long-term, strategic goals. This, in turn, may affect how the agency structures (and restructures) itself and how it decides regulatory questions, including a continued review of net neutrality. Congress may determine that the public interest standard should remain more static, rather than fluctuating dramatically depending on the regulatory philosophy of the chairman. No legislation on this topic has been introduced in Congress, signaling to some observers that it intends to continue allowing the FCC to define it. Table A-1 . Senate and House hearings in the 115 th Congress regarding the operation of the FCC are detailed in Table A-2 and Table A-3 , respectively. Links to individual hearing pages are included in these tables.
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The Federal Communications Commission (FCC) is an independent federal agency established by the Communications Act of 1934 (1934 Act, or "Communications Act"). The agency is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The mission of the FCC is to make available for all people of the United States, "without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges." The FCC operates under a public interest mandate first laid out in the 1927 Radio Act (P.L. 632, 69th Congress), but how this mandate is applied depends on how "the public interest" is interpreted. Some regulators seek to protect and benefit the public at large through regulation, while others seek to achieve the same goals through the promotion of market efficiency. Additionally, Congress granted the FCC wide latitude and flexibility to revise its interpretation of the public interest standard to reflect changing circumstances and the agency has not defined it in more concrete terms. These circumstances, paired with changes in FCC leadership, have led to significant changes over time in how the FCC regulates the broadcast and telecommunications industries. The FCC is directed by five commissioners appointed by the President and confirmed by the Senate for five-year terms. The President designates one of the commissioners as chairperson. Three commissioners may be members of the same political party of the President and none can have a financial interest in any commission-related business. The current commissioners are Ajit Pai (Chair), Michael O'Rielly, Brendan Carr, Jessica Rosenworcel, and Geoffrey Starks. The day-to-day functions of the FCC are carried out by 7 bureaus and 10 offices. The current basic structure of the FCC was established in 2002 as part of the agency's effort to better reflect the industries it regulates. The seventh bureau, the Public Safety and Homeland Security Bureau, was established in 2006. The bureaus process applications for licenses and other filings, manage non-federal spectrum, analyze complaints, conduct investigations, develop and implement regulatory programs, and participate in hearings, among other things. The offices provide support services. Bureaus and offices often collaborate when addressing FCC issues. Beginning in the 110th Congress, the FCC has been funded through the House and Senate Financial Services and General Government (FSGG) appropriations bill as a single line item. Previously, it was funded through what is now the Commerce, Justice, Science appropriations bill, also as a single line item. Since 2009 the FCC's budget has been derived from regulatory fees collected by the agency rather than through a direct appropriation. The fees, often referred to as "Section (9) fees," are collected from license holders and certain other entities. The FCC is authorized to review the regulatory fees each year and adjust them to reflect changes in its appropriation from year to year. Most years, appropriations language prohibits the use by the commission of any excess collections received in the current fiscal year or any prior years. For FY2020, the FCC has requested $335,660,000 in budget authority from regulatory fee offsetting collections. The FCC also requested $132,538,680 in budget authority for the spectrum auctions program.
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Congress appropriates foreign affairs funding primarily through annual Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations. Prior to FY2008, however, Congress provided funds for the Department of State and international broadcasting within the Commerce, Justice, and State, the Judiciary, and Related Agencies appropriations (CJS) and separately provided foreign aid funds within Foreign Operations, Export Financing, and Related Programs appropriations. The transition between the different alignments occurred in the 109 th Congress, with a change in appropriations subcommittee jurisdiction. For that Congress, the House of Representatives appropriated State Department funds separately from foreign aid, as in earlier Congresses, but the Senate differed by appropriating State and foreign aid funds within one bill—the Department of State, Foreign Operations, and Related Programs Appropriations. Both the House and Senate began jointly funding Department of State and foreign aid appropriations within the Department of State, Foreign Operations and Related Programs Appropriations in the Consolidated Appropriations Act, 2008 ( P.L. 110-161 ). SFOPS appropriations currently include State Department Operations (including accounts for Embassy Security, Construction, and Maintenance, and Education and Cultural Affairs, among others); Foreign Operations (including USAID administration expenses, bilateral economic assistance, international security assistance, multilateral assistance, and export assistance); various international commissions; and International Broadcasting (including VOA, RFE/RL, Cuba Broadcasting, Radio Free Asia, and Middle East Broadcasting Networks). While the distribution varies slightly from year to year, Foreign Operations funding is typically about twice as much as State Operations funding. In addition to regular, enduring SFOPS appropriations, Congress has approved emergency supplemental funding requested by Administrations to address emergency or otherwise off-cycle budget needs. Since FY2012, Congress has also appropriated Overseas Contingency Operations (OCO) funding requested within the regular budget process for Department of State and USAID war-related expenses. This report lists the legislative and funding history of SFOPS appropriations and includes funding trends. Nearly all foreign affairs appropriations within the past 25 years were passed within omnibus, consolidated, or full-year continuing resolutions, rather than in stand-alone bills, and usually after the start of the new fiscal year. Many foreign policy experts contend that stand-alone appropriations legislation would allow for a more rigorous debate on specific foreign policy activities and improve the ability to introduce or fund new programs, or cancel and defund existing programs. Such experts assert that the frequent practice of passing continuing resolutions and delaying passage of appropriations well into the next fiscal year has hindered program planning (not just in foreign affairs) and has reduced the ability to fund programs that did not exist in the previous cycle. In addition to annual appropriations, several laws require Congress to authorize State and foreign operations funding prior to expenditure. Before 2003, Congress typically provided authorization in a biannual Foreign Relations Authorization bill. This practice not only authorized funding for obligation and expenditure, but also provided a forum for more rigorous debate on specific foreign affairs and foreign aid policies and a legislative vehicle for congressional direction. In recent years, the House and Senate have separately introduced or considered foreign relations and foreign aid authorization bills, but none have been enacted. Table 1 below provides a 25-year history of enacted foreign affairs appropriations laws (excluding short-term continuing resolutions and supplemental appropriations), including the dates they were sent to the President and signed into law. Some observations follow: Since FY1995, Congress appropriated foreign affairs funding in on-time, freestanding bills once—in 1994 for the FY1995 appropriations year. The last time Congress passed foreign affairs funding on time, but not in freestanding legislation, was for FY1997. Congress included foreign affairs funding within an omnibus, consolidated, or full-year continuing resolution 21 of the past 25 years. FY2006 was the last time Congress enacted freestanding State Department and foreign operations appropriations bills. Six times over the past 25 years, Congress sent the State and foreign operations appropriations to the President in March, April, or May—six to eight months into the fiscal year. Since realignment of the foreign affairs appropriations legislation in FY2008, SFOPS appropriations measures have included State Department Operations, Foreign Operations, various international commissions, and International Broadcasting. For a full list of the accounts included in the FY2019 SFOPS, see Table 2 . Table 3 and Figure 1 provide the funding levels for enduring funds and Supplemental/OCO funds in the Department of State, Foreign Operations and Related Programs for FY2001-2020 request (in current dollars). Although current funding for State-Foreign Operations generally has grown since FY2001, there was a spike in funding in FY2004 that can, in large part, be attributed to supplemental funding for the Iraq Relief and Reconstruction Fund, which provided additional funds in that year. The creation of the Millennium Challenge Corporation (MCC) and the President's Emergency Plan for AIDS Relief (PEPFAR) added to growing funding levels from FY2004-FY2009. OCO became a regular part of foreign affairs funding as of FY2012. Supplemental funding for Ebola in FY2015, Zika in FY2016, and OCO in FY2017 contributed to the rise in funding levels during those years (see Figure 2 ). The constant dollar trend line generally continues to increase, although at a slower pace than current dollars. FY2004 remains the peak year in constant dollars. The introduction of OCO funding in FY2012 briefly elevated SFOPS funding, but in the following years, funding levels off at nearly the same amount as the FY2012 level. After removing inflation, funding for FY2013 through the FY2020 request declines below that level, suggesting that the Budget Control Act of 2011 (BCA) has kept foreign affairs funding below the rate of inflation. The Administration distinguishes between enduring (also called base, regular, or ongoing), emergency supplemental, and Overseas Contingency Operations (OCO) funds. Funds designated as emergency or OCO are not subject to procedural limits on discretionary spending in congressional budget resolutions, or the statutory discretionary spending limits provided through the Budget Control Act of 2011 for FY2011-FY2021 (BCA, P.L. 112-25 ). Prior to FY2012, the President typically submitted to Congress additional funding requests (after the initial annual budget request), referred to as emergency supplementals. Supplemental funding packages have historically been approved to address emergency, war-related, or otherwise off-cycle budget needs. The Obama Administration requested emergency supplemental appropriations for urgent unexpected expenses, such as the U.S. international responses to Ebola, the Zika virus, and famine relief to Syria, Yemen, Somalia, and Northeast Nigeria. The Trump Administration has not requested supplemental funding for unexpected international crises. In contrast to emergency supplemental appropriations, the Obama Administration included within the regular budget request in FY2012 what it described as short-term, temporary, war-related funding for the frontline states of Iraq, Afghanistan, and Pakistan—designated as Overseas Contingency Operations funds, or OCO. Congress had used the OCO designation in earlier years for Department of Defense appropriations to distinguish between ongoing versus war-related expenditures. In response to the FY2012 SFOPS OCO request, Congress appropriated OCO funds for the Department of State and USAID activities beyond the requested level and for more than just activities in Iraq, Afghanistan, and Pakistan. In FY2012, Congress included OCO funds for the three frontline states as well as for Yemen, Somalia, Kenya, and the Philippines. The Obama Administration first requested OCO funds for a country other than the three frontline states in FY2015, when it requested OCO funds for Syria. In FY2018, the Trump Administration requested OCO funds for the Department of State and USAID activities in Iraq, Afghanistan, and Pakistan, as well as "High Threat/High Risk" areas. These included Syria, Yemen, Nigeria, Somalia, and South Sudan, among others. The Administration's initial FY2019 request included OCO funds for the Department of State and USAID, but after passage of the Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123 ), the Administration requested that all previously requested SFOPS OCO funds be moved to enduring funds. For FY2020, the Trump Administration again requested no OCO funds for foreign affairs agencies. Since FY2012, OCO has ranged from a low of 14% of the total budget request in FY2014 to a high of 36% in FY2017, when the Bipartisan Budget Act of 2015 (BBA 2015, P.L. 114-74 ) set nonbinding OCO minimums for FY2016 and FY2017. The Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123 ) raised discretionary spending limits for FY2018 and FY2019 and extended direct spending reductions through FY2027. With the raised spending limits, the Trump Administration's FY2019 budget request did not include the OCO designation for any foreign assistance funds. However, Congress has continued to appropriate OCO funds, including $8.0 billion in FY2019. The Administration's FY2020 budget request also does not request OCO funds for State-Foreign Operations appropriations. The BCA and BBAs have had an effect on foreign affairs funding levels and may have future implications. The Budget Control Act of 2011 sets limits on discretionary spending through FY2021 for defense and nondefense funding categories. Because OCO funds are not counted against the discretionary spending limits, the BCA has put downward pressure on SFOPS enduring/base funds, while OCO has increasingly funded other foreign affairs activities. In addition, the 2015 BBA significantly increased FY2016 and FY2017 OCO funding for foreign affairs over the requested funding levels in FY2015 and FY2016, further encouraging a migration of funds for ongoing activities into OCO-designated accounts. However, the 2018 BBA has had the opposite effect on foreign affairs OCO, allowing lawmakers to shift OCO funding back into enduring/base accounts.
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Congress currently appropriates most foreign affairs funding through annual Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations. Prior to FY2008, however, Congress provided funding for the Department of State, international broadcasting, and related programs within the Commerce, Justice, State, the Judiciary, and Related Agencies appropriations. In those years, Congress separately appropriated funding for the U.S. Agency for International Development (USAID) and foreign aid within the Foreign Operations, Export Financing, and Related Programs appropriations. The 110th Congress aligned the two foreign affairs appropriations into the SFOPS legislation. SFOPS appropriations since FY2001 have included enduring appropriations (ongoing or base funding), emergency supplemental appropriations, and Overseas Contingency Operations (OCO) appropriations. Total SFOPS funding levels in both current and constant dollars show a general upward trend, with FY2004 as the peak largely as a result of emergency supplemental appropriations for Iraq Relief and Reconstruction Funds. When adjusted for inflation, annual foreign affairs appropriations have yet to surpass the FY2004 peak. The Budget Control Act (BCA) of 2011 and the Bipartisan Budget Acts (BBA) of 2015 and 2018 appear to have had an impact on both enduring and OCO funding levels. The legislative history of SFOPS appropriations shows that nearly all foreign affairs appropriations measures within the past 25 years were passed within omnibus, consolidated, or full-year continuing resolutions, rather than in stand-alone bills. Moreover, many appropriations were passed after the start of the new fiscal year, at times more than half way into the new fiscal year. In many fiscal years, SFOPS appropriations included emergency supplemental funding or, since FY2012, OCO funding.
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The Small Business Administration (SBA) administers programs to support small businesses, including loan guaranty programs to encourage lenders to provide loans to small businesses "that might not otherwise obtain financing on reasonable terms and conditions." The SBA's 7(a) loan guaranty program is considered the agency's flagship loan program. Its name is derived from Section 7(a) of the Small Business Act of 1953 (P.L. 83-163, as amended), which authorizes the SBA to provide and guarantee business loans to American small businesses. The SBA also administers several 7(a) subprograms that offer streamlined and expedited loan procedures for particular groups of borrowers, including the SBAExpress, Export Express, and Community Advantage Pilot programs (see the Appendix for additional details). Although these subprograms have their own distinguishing eligibility requirements, terms, and benefits, they operate under the 7(a) program's authorization. Proceeds from 7(a) loans may be used to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. Specific uses include to acquire land (by purchase or lease); improve a site (e.g., grading, streets, parking lots, and landscaping); purchase, convert, expand, or renovate one or more existing buildings; construct one or more new buildings; acquire (by purchase or lease) and install fixed assets; purchase inventory, supplies, and raw materials; finance working capital; and refinance certain outstanding debts. In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25.4 billion. The average approved 7(a) loan amount was $420,401. As will be discussed, the total number and amount of SBA 7(a) loans approved (and actually disbursed) declined in FY2008 and FY2009, increased during FY2010 and FY2011, declined somewhat in FY2012, and have increased since then. Historically, one of the justifications presented for funding the SBA's loan guaranty programs has been that small businesses can be at a disadvantage, compared with other businesses, when trying to obtain access to sufficient capital and credit. Congressional interest in the 7(a) loan program has increased in recent years because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to grow and create jobs. Some Members of Congress have argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations with the expectation that in so doing small businesses will create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to help small businesses further economic growth and job creation. This report discusses the rationale provided for the 7(a) program; the program's borrower and lender eligibility standards and program requirements; and program statistics, including loan volume, loss rates, use of the proceeds, borrower satisfaction, and borrower demographics. It also examines issues raised concerning the SBA's administration of the 7(a) program, including the oversight of 7(a) lenders and the program's lack of outcome-based performance measures. This report also surveys congressional and presidential actions taken in recent years to help small businesses gain greater access to capital. For example, during the 111 th Congress P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), provided the SBA an additional $730 million, including $375 million to temporarily subsidize the 7(a) and 504/Certified Development Companies (504/CDC) loan guaranty programs' fees ($299 million) and to temporarily increase the 7(a) program's maximum loan guaranty percentage to 90% ($76 million). P.L. 111-240 , the Small Business Jobs Act of 2010, provided $505 million (plus $5 million for administrative expenses) to extend the fee subsidies and 90% loan guaranty percentage through December 31, 2010; increased the 7(a) program's gross loan limit from $2 million to $5 million; and established an alternative size standard for the 7(a) and 504/CDC loan programs to enable more small businesses to qualify for assistance. P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue the fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted (which occurred on January 3, 2011). During the 112 th Congress, several bills were introduced to expand the 7(a) program: S. 1828 , a bill to increase small business lending (and for other purposes), would have reinstated for one year following the date of its enactment the fee subsidies for the 7(a) and 504/CDC loan guaranty programs and the 90% loan guaranty percentage for the 7(a) program, which were originally authorized by ARRA. H.R. 2936 , the Small Business Administration Express Loan Extension Act of 2011, would have extended a one-year increase in the maximum loan amount for the SBAExpress program from $350,000 to $1 million for an additional year. That temporary increase was authorized by P.L. 111-240 and expired on September 27, 2011. S. 532 , the Patriot Express Authorization Act of 2011, would have provided statutory authorization for the Patriot Express Pilot Program and increased its loan guaranty percentages and its maximum loan amount from $500,000 to $1 million. The Patriot Express Pilot Program was subsequently discontinued by the SBA on December 31, 2013. During the 113 th Congress, the SBA waived the up-front, one-time loan guaranty fee and ongoing servicing fee for 7(a) loans of $150,000 or less approved in FY2014 and FY2015 as a means to encourage the demand for smaller 7(a) loans. H.R. 2462 , the Small Business Opportunity Acceleration Act of 2013, would have made the fee waiver for smaller 7(a) loans permanent. waived the up-front, one-time loan guaranty fee for a loan to a veteran or to a veteran's spouse under the SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015 (called the SBA Veterans Advantage Program). waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 up to and including $5 million in FY2015. In addition, P.L. 113-235 , the Consolidated and Further Continuing Appropriations Act, 2015, provided statutory authorization for the Veterans Advantage fee waiver in FY2015. During the 114 th Congress, the SBA waived the up-front, one-time loan guaranty fee for 7(a) loans of $150,000 or less approved in FY2016 and FY2017 as a means to encourage the demand for smaller 7(a) loans. waived the annual service fee for 7(a) loans of $150,000 or less approved in FY2016 (increased to 0.546% in FY2017). waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $5 million in FY2016; and 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $500,000 in FY2017. In addition P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, provided statutory authorization and made permanent the veteran's fee waiver under the SBAExpress program, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The SBA waived this fee in FY2016, FY2017, FY2018, and is waiving this fee in FY2019. The act also increased the 7(a) program's FY2015 authorization limit of $18.75 billion (on disbursements) to $23.5 billion. P.L. 114-113 , the Consolidated Appropriations Act, 2016, increased the 7(a) program's authorization limit to $26.5 billion in FY2016. P.L. 114-223 , the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, authorized the SBA to use funds from its business loan program account "to accommodate increased demand for commitments for [7(a)] general business loans" for the duration of the continuing resolution (initially December 9, 2016, later extended by P.L. 114-254 , the Further Continuing and Security Assistance Appropriations Act, 2017, to April 28, 2017). During the 115 th Congress, the SBA waived the up-front, one-time loan guaranty fee for 7(a) loans of $125,000 or less approved in FY2018 as a means to encourage the demand for smaller 7(a) loans. waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $125,001 to $350,000 in FY2018. is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reducing the up-front one-time guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019. In addition P.L. 115-31 , the Consolidated Appropriations Act, 2017, increased the 7(a) program's authorization limit to $27.5 billion in FY2017 and P.L. 115-141 , the Consolidated Appropriations Act, 2018, increased the 7(a) program's authorization limit to $29.0 billion in FY2018. P.L. 115-189 , the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit. The SBA is required to provide at least 30 days' notice of its intent to exceed the 7(a) loan program's authorization limit to the House and Senate Committees on Small Business and the House and Senate Committees on Appropriations' Subcommittees on Financial Services and General Government and may exercise this option only once per fiscal year. P.L. 115-232 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019, included provisions originally in H.R. 5236 , the Main Street Employee Ownership Act of 2018, to make 7(a) loans more accessible to employee-owned small businesses (ESOPs) and cooperatives. The act clarified that 7(a) loans to ESOPs may be made under the Preferred Lenders Program; allows the seller to remain involved as an officer, director, or key employee when the ESOP or cooperative has acquired 100% ownership of the small business; and authorizes the SBA to finance transition costs to employee ownership and waive any mandatory equity injection by the ESOP or cooperative to help finance the change of ownership. The act also directs the SBA to create outreach programs and an interagency working group to promote lending to ESOPs and cooperatives. President Trump's FY2019 budget request included proposals to offset SBA business loan administrative costs by, among other provisions, (1) allowing the SBA to set the 7(a) program's annual servicing fee at rates below zero credit subsidy; (2) increasing the 7(a) loan program's FY2019 annual servicing fee's cap from 0.55% to 0.625%; and (3) increasing the FY2019 upfront loan guarantee fee on 7(a) loans over $1 million by 0.25%. The Trump Administration estimated that these changes would raise $93 million in additional revenue. The Trump Administration also requested that the 7(a) loan program's authorization limit be increased to $30.0 million in FY2019; that the SBA be allowed to further increase the 7(a) loan program's authorization amount in FY2019 by 15% under specified circumstances "to better equip the SBA to meet peaks in demand while continuing to operate at zero subsidies"; and that the SBAExpress program's loan limit be increased from $350,000 to $1 million. During the 116 th Congress P.L. 116-6 , the Consolidated Appropriations Act, 2019, increased the 7(a) program's authorization limit to $30.0 billion in FY2019. This report's Appendix provides a brief description of the 7(a) program's SBAExpress, Export Express, and Community Advantage programs. To be eligible for an SBA business loan, a small business applicant must be located in the United States; be a for-profit operating business (except for loans to eligible passive companies and businesses engaged in specified industries, such as insurance companies and financial institutions primarily engaged in lending); qualify as small under the SBA's size requirements; demonstrate a need for the desired credit; and be certified by a lender that the desired credit is unavailable to the applicant on reasonable terms and conditions from nonfederal sources without SBA assistance. To qualify for an SBA 7(a) loan, applicants must be creditworthy and able to reasonably assure repayment. SBA requires lenders to consider the strength of the business and the applicant's character, reputation, and credit history; experience and depth of management; past earnings, projected cash flow, and future prospects; ability to repay the loan with earnings from the business; sufficient invested equity to operate on a sound financial basis; potential for long-term success; nature and value of collateral (although inadequate collateral will not be the sole reason for denial of a loan request); and affiliates' effect on the applicant's repayment ability. Borrowers may use 7(a) loan proceeds to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. 7(a) loan proceeds may be used to acquire land (by purchase or lease); improve a site (e.g., grading, streets, parking lots, landscaping), including up to 5% for community improvements such as curbs and sidewalks; purchase one or more existing buildings; convert, expand, or renovate one or more existing buildings; construct one or more new buildings; acquire (by purchase or lease) and install fixed assets; purchase inventory, supplies, and raw materials; finance working capital; and refinance certain outstanding debts. Borrowers are prohibited from using 7(a) loan proceeds to refinance existing debt where the lender is in a position to sustain a loss and the SBA would take over that loss through refinancing; effect a partial change of business ownership or a change that will not benefit the business; permit the reimbursement of funds owed to any owner, including any equity injection or injection of capital for the business's continuance until the loan supported by the SBA is disbursed; repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow; or pay for a nonsound business purpose. As mentioned previously, P.L. 111-240 increased the 7(a) program's maximum gross loan amount for any one 7(a) loan from $2 million to $5 million (up to $3.75 million maximum guaranty). In FY2018, the average approved 7(a) loan amount was $420,401, and about 36% of all 7(a) loans exceeded $2 million. A 7(a) loan is required to have the shortest appropriate term, depending upon the borrower's ability to repay. The maximum term is 10 years, unless the loan finances or refinances real estate or equipment with a useful life exceeding 10 years. In that case, the loan term can be up to 25 years, including extensions. Lenders are allowed to charge borrowers "a reasonable fixed interest rate" or, with the SBA's approval, a variable interest rate. The SBA uses a multistep formula to determine the maximum allowable fixed interest rate for all 7(a) loans (with the exception of the Export Working Capital Program and Community Advantage loans) and periodically publishes that rate and the maximum allowable variable interest rate in the Federal Register . The maximum allowable fixed interest rates in February 2019 are 13.50% for 7(a) loans of $25,000 or less; 12.50% for loans over $25,000 but not exceeding $50,000; 11.50% for loans over $50,000 up to and including $250,000; and 10.50% loans greater than $250,000. The 7(a) program's maximum allowable variable interest rate may be pegged to the lowest prime rate (5.50% in February 2019), the 30-day LIBOR rate plus 300 basis points (5.51% in February 2019), or the SBA optional peg rate (3.13% in the second quarter of FY2019). The optional peg rate is a weighted average of rates the federal government pays for loans with maturities similar to the average SBA loan. For 7(a) loans of $25,000 or less, the SBA does not require lenders to take collateral. For 7(a) loans exceeding $25,000 to $350,000, the lender must follow the collateral policies and procedures that it has established and implemented for its similarly sized non-SBA-guaranteed commercial loans. However, the lender must, at a minimum, obtain a first lien on assets financed with loan proceeds, and a lien on all of the applicant's fixed assets, including real estate, up to the point that the loan is fully secured. For 7(a) loans exceeding $350,000, the SBA requires lenders to collateralize the loan to the maximum extent possible up to the loan amount. If business assets do not fully secure the loan, the lender must take available equity in the principal's personal real estate (residential and investment) as collateral. 7(a) loans are considered "fully secured" if the lender has taken security interests in all available fixed assets with a combined "net book value" up to the loan amount. The SBA directs lenders to not decline a loan solely on the basis of inadequate collateral because "one of the primary reasons lenders use the SBA-guaranteed program is for those Applicants that demonstrate repayment ability but lack adequate collateral to repay the loan in full in the event of a default." Lenders must have a continuing ability to evaluate, process, close, disburse, service, and liquidate small business loans; be open to the public for the making of such loans (and not be a financing subsidiary, engaged primarily in financing the operations of an affiliate); have continuing good character and reputation; and be supervised and examined by a state or federal regulatory authority, satisfactory to the SBA. They must also maintain satisfactory performance, as determined by the SBA through on-site review/examination assessments, historical performance measures (such as default rate, purchase rate, and loss rate), and loan volume to the extent that it affects performance measures. In FY2017, 1,978 lenders provided 7(a) loans. The SBA started the Preferred Lenders Program (PLP) on March 1, 1983, initially on a pilot basis. It is designed to streamline the procedures necessary to provide financial assistance to small businesses by delegating the final credit decision and most servicing and liquidation authority and responsibility to carefully selected PLP lenders. PLP loan approvals are subject only to a brief eligibility review and the assignment of a loan number by SBA. PLP lenders draft the SBA Authorization (of loan guaranty approval) without the SBA's review, and execute it on behalf of the SBA. In FY2018, PLP lenders approved 26,497 7(a) loans (43.9% of all 7(a) loans), amounting to $18.8 billion (74.2% of the total amount approved). PLP lenders must comply with all of the SBA's business loan eligibility requirements, credit policies, and procedures. The PLP lender is required to stay informed on, and apply, all of the SBA's loan program requirements. They must also complete and retain in the lender's file all forms and documents required of standard 7(a) loan packages. Borrowers submit applications for a 7(a) business loan to private lenders. The lender reviews the application and decides if it merits a loan on its own or if it has some weaknesses which, in the lender's opinion, do not meet standard, conventional underwriting guidelines and require additional support in the form of an SBA guaranty. The SBA guaranty assures the lender that if the borrower does not repay the loan and the lender has adhered to all applicable regulations concerning the loan, the SBA will reimburse the lender for its loss, up to the percentage of the SBA's guaranty. The small business borrowing the money remains obligated for the full amount due. If the lender determines that it is willing to provide the loan, but only with an SBA guaranty, it submits the application for approval to the SBA's Loan Guaranty Processing Center (LGPC) through the SBA's E-Tran (Electronic Loan Processing/Servicing) website (which is available through SBA One, the SBA's automated lending platform) or, if attachments to the application are too large for E-Tran, by secured electronic file transfer. The LGPC has two physical locations: Citrus Heights, CA, and Hazard, KY. This center has responsibility for processing 7(a) loan guaranty applications for lenders who do not have delegated authority to make 7(a) loans without the SBA's final approval. The SBA has authorized PLP and express lenders to make credit decisions without SBA review prior to loan approval. However, the PLP and express lender's analysis is subject to the SBA's review and determination of adequacy when the lender requests the SBA to purchase its guaranty and when the SBA is conducting a review of the lender. As an additional safeguard against the potential for loan defaults, the SBA now requires all non-express 7(a) loans of $350,000 or less to be SBA credit scored through E-Tran prior to submission/approval. If the credit score is below the minimum set by the SBA (currently 140 for 7(a) loans of $350,000 or less, including Community Advantage loans), the loan must be submitted to the SBA for approval with a full credit write-up for consideration. The loan cannot be processed under delegated authority. If the credit score is acceptable to the SBA, the lender is a PLP lender, and the loan is eligible to be processed under the PLP lender's delegated authority, the lender will receive an SBA loan number indicating that the loan is approved. The PLP lender's documentation, including underwriting, closing, and servicing, must be maintained in their files, and can be reviewed by the SBA at any time. If the lender is not a PLP lender or if the loan is not eligible to be submitted under the PLP lender's delegated authority, the lender must refer the loan to the LGPC for review. The application materials required for a SBA guaranty vary depending on the size of the loan ($350,000 or less versus exceeding $350,000) and the method of processing used by the lender (standard versus expedited/express). The following SBA documentation is required for all 7(a) standard loans of $350,000 or less: Form 191 9: Borrower Information Form . SBA form 1919 provides information about the borrower (name, name of business, social security number, date and place of birth, gender, race, veteran, etc.); the loan request; any indebtedness; the principals and affiliates; current or previous government financing; the applicant's eligibility (e.g., criminal information, citizenship status); the loan's eligibility for delegated or expedited processing (e.g., the borrower is not more than 60 days delinquent in child support payments, not proposed or presently excluded from participation in this transaction by any federal department or agency, has no potential for a conflict of interest due to an owner being a current or former SBA employee, a Member of Congress, or a SCORE volunteer); and, among other disclosures, the firm's existing number of employees, the number of jobs to be created as a result of the loan, and the number of jobs that will be retained as a result of the loan that would have otherwise been lost. Form 912 : Statement of Personal History . SBA form 912 is required if the borrower reports on Form 1919 an arrest in the past six months for a criminal offense or had ever been convicted, plead guilty, plead nolo contendere, been placed on pretrial diversion, or been placed on any form of parole or probation (including probation before judgment) of any criminal offense. Form 912 requires the borrower to furnish details concerning his or her offense(s) and authorizes the SBA's Office of Inspector General to request criminal record information about the applicant from criminal justice agencies for determining program eligibility. It must be dated within 90 days of the application's submission to the SBA. Form 159 : Fee Disclosure and Compensation Agreement . SBA form 159 is required if the borrower reports on Form 1919 that he or she used (or intends to use) a packager, broker, accountant, lawyer, etc. to assist in preparing the loan application or any related materials. SBA form 159 is also required if the lender retains the services of a packager, broker, accountant, lawyer, etc. to assist in preparing the loan application or any related materials. Form 159 provides identifying information about the packager, broker, accountant, lawyer, etc. and the fees paid to any such person. Form 601 : Agreement of Compliance (prohibiting discrimination). SBA form 601 is required if the borrower reports on Form 1919 that more than $10,000 of the loan proceeds will be used for construction. Form 601 certifies that the borrower will cooperate actively in obtaining compliance with Executive Order 11246, which prohibits discrimination on the basis of race, color, religion, sex, or national origin and requires affirmative action to ensure equality of opportunity in all aspects of employment related to federally assisted construction projects in excess of $10,000. Form 1920 : Lenders Application for Guaranty for all 7(a) Programs . SBA form 1920 provides identifying information about the lender; the loan type (standard, SBAExpress, Export Express, etc.); loan terms; use of proceeds; the business's size and information about affiliates, if any; the applicant's character; if credit is reasonably available elsewhere; the type of business; potential conflicts of interest; and other information such the number of jobs created or retained. PLP lenders complete the form and retain it in the loan file. Other lenders must submit this form electronically to the LGPC. Verification of Alien Status . Documentation of the U.S. Citizenship and Immigration Services (USCIS) status of each alien is required prior to submission of the application to the SBA. Lender's Credit Memo randum . For loans up to and including $350,000, the Lender's Credit Memorandum includes a brief description of the history of the business and its management; the debt service coverage ratio (net operating income compared to total debt service must be at least 1:1); statement that the lender has reconciled financial data (including seller's financial data) against IRS transcripts; an owner/guarantor analysis (including personal financial condition); lender's discussion of life insurance requirements; explanation and justification for any refinancing; analysis of credit, including lender's rationale for recommending approval; for a change of ownership, discussion/analysis of business valuation and how the change benefits the business; discussion of any liens, judgments, or bankruptcy filings; and discussion of any other relevant information. For loans exceeding $350,000, the Lender's Credit Memorandum must also include an analysis of collateral and a financial analysis which includes an analysis of the historical financial statements; defining assumptions supporting projected cash flow; and, when used, spread of pro forma balance sheet, ratio calculations, and working capital analysis. Cash Flow Projections . A projection of the borrower's cash flow, month-by-month for one year, is required for all new businesses, and when otherwise applicable. The following forms and documentation are also required for 7(a) standard loans exceeding $350,000: Form 413 : Personal Financial Statement . SBA form 413 provides detailed information concerning the applicant's assets and liabilities and must be dated within 90 days of submission to the SBA, on all owners of 20% or more (including the assets of the owner's spouse and any minor children), and proposed guarantors. Lenders may substitute their own Personal Financial Statement form. Form 1846 : Statement Regarding Lobbying . SBA Form 1846 must be signed and dated by lender. It indicates that if any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an officer or employee of a Member of Congress in connection with this commitment, the lender will complete and submit a Standard Form LLL "Disclosure of Lobbying Activities." A copy of Internal Revenue Service (IRS) Form 4506-T, Request for Copy of Tax Return . Lenders must identify the date IRS Form 4506-T was sent to the IRS. For nondelegated lenders, verification of IRS Form 4506-T is required prior to submission of the application to the SBA. For PLP and express lenders, verification of IRS Form 4506-T is required prior the first disbursement. Business Financial Statements or tax returns dated within 180 days of the application's submission to the SBA, consisting of (1) year-end balance sheets for the last three years, (2) year-end profit and loss statements for the last three years, (3) reconciliation of net worth, (4) interim balance sheet, and (5) interim profit and loss statements. Affiliate and Subsidiary Financial Statements or tax returns dated within 180 days of the application's submission to the SBA, consisting of (1) year-end balance sheets for the last three years, (2) year-end profit and loss statements for the last three years, (3) reconciliation of net worth, (4) interim balance sheet, and (5) interim profit and loss statements. A copy of the Le ase Agreement , if applicable. A detailed Schedule of C ollateral . A detailed List of M&E (machinery and equipment) being purchased with SBA loan proceeds, including cost quotes. If real estate is to be purchased with the loan proceeds, a Real Estate Appraisal , Environmental Investigation Report questionnaire, a cost breakdown, and copy of any Real Estate Purchase Agreements . If purchasing an existing business with loan proceeds, a (1) copy of buy-sell agreement, (2) copy of business valuation, (3) pro forma balance sheet for the business being purchased as of the date of transfer, (4) copy of the seller's financial statements for the last three complete fiscal years or for the number of years in business if less than three years, (5) interim statements no older than 180 days from date of submission to the SBA, and (6) if the seller's financial statements are not available, the seller must provide an alternate source of verifying revenues. An explanation of the type and source of applicant's equity injection. Proper evidence of a borrower's equity injection may include the copy of a check together with proof it was processed, or a copy of an escrow settlement sheet with a bank account statement showing the injection into the business prior to disbursement. A promissory note, "gift letter," or financial statement is generally not sufficient evidence. To offset its costs, the SBA is authorized to charge lenders an up-front, one-time guaranty fee and an annual, ongoing service fee for each 7(a) loan approved and disbursed. The SBA's fees vary depending on loan amount and loan maturity. The maximum guaranty fee for 7(a) loans with maturities exceeding 12 months is set by statute and varies depending on the loan amount. The fee is a percentage of the SBA guaranteed portion of the loan. On short-term loans (maturities of less than 12 months), the lender must pay the guaranty fee to the SBA electronically through www.pay.gov within 10 days from the date the SBA loan number is assigned. If the fee is not received within the specified time frame, the SBA will cancel the guaranty. On loans with maturities in excess of 12 months, the lender must pay the guaranty fee to the SBA within 90 days of the date of loan approval. For short-term loans, the lender may charge the guaranty fee to the borrower only after the lender has paid the guaranty fee. For loans with maturities in excess of 12 months, the lender may charge the guaranty fee to the borrower after initial disbursement. Lenders are permitted to retain 25% of the guaranty fee on loans with a gross amount of $150,000 or less. The annual service fee cannot exceed 0.55% of the outstanding balance of the SBA's share of the loan and is required to be no more than the "rate necessary to reduce to zero the cost to the Administration" of making guaranties. The lender's annual service fee to the SBA cannot be charged to the borrower. In an effort to assist small business owners, the SBA waived its annual service fee for all 7(a) loans of $150,000 or less approved from FY2014 through FY2016 (the annual service fee for other small businesses was 0.52% in FY2014, 0.519% in FY2015, and 0.473% in FY2016); is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone in FY2019 (the annual service fee for other small businesses is 0.55% in FY2019); waived the up-front, one-time guaranty fee for all 7(a) loans of $150,000 or less approved from FY2014 through FY2017; waived the up-front, one-time guaranty fee for all 7(a) loans of $125,000 or less approved in FY2018; and is reducing the up-front one-time guaranty fee for loans made small businesses located in a rural area or a HUBZone from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019. Table 1 shows the annual service fee and guaranty fee for 7(a) loans in FY2019. The annual service fee is a percentage of the outstanding balance of the SBA's share of the loan. The guaranty fee is a percentage of the SBA guaranteed portion of the loan. As mentioned previously, the SBA waived its up-front, one-time guaranty fee for all veteran loans under the 7(a) SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015. P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, made this fee waiver permanent, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The SBA waived this fee in FY2016, FY2017, and FY2018 and is waiving it in FY2019. The SBA also waived 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $150,001 to $5 million for veterans in FY2015 and FY2016; 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $150,001 to $500,000 for veterans in FY2017; and 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $125,001 to $350,000 for veterans in FY2018. The Obama Administration argued that fee waivers for 7(a) loans of $150,000 or less were necessary because the demand for smaller 7(a) loans had fallen and the waiver reduction "can be achieved with zero credit subsidy appropriations" because the "annual fees for larger 7(a) loans will cover the cost for those smaller loans." The Administration also contended that waiving the fees on smaller SBA loans would "promote lending to small businesses that face the most constraints on credit access." For context, 7(a) loans of $150,000 or less accounted for about 11.8% of the total amount of 7(a) loan approvals in FY2010 ($1.46 billion of $12.41 billion); 8.3% in FY2011 ($1.63 billion of $19.64 billion); 9.5% in FY2012 ($1.44 billion of $15.15 billion); 8.1% in FY2013 ($1.45 billion of $17.87 billion); 9.7% in FY2014 ($1.86 billion of $19.19 billion); 9.7% in FY2015 ($2.28 billion of $23.58 billion); 9.4% in FY2016 ($2.75 billion of $24.13 billion), and 9.2% in FY2017 ($2.33 billion of $25.45 billion). The SBA also announced that eliminating guaranty fees for 7(a) loans of $150,000 or less ($125,000 or less in FY2018) was part of its broader effort to "reduce barriers, attract new lenders, grow loan volumes of existing lenders and improve access to capital for small businesses and entrepreneurs." Some in Congress questioned whether it is appropriate to require borrowers of larger 7(a) loans to, in effect, subsidize borrowers of smaller 7(a) loans, who might be direct competitors. They have suggested that it might be more appropriate to reduce fees across-the-board without regard to loan size. The lender may charge an applicant "reasonable fees" customary for similar lenders in the geographic area where the loan is being made for packaging and other services. The lender must advise the applicant in writing that the applicant is not required to obtain or pay for unwanted services. These fees are subject to SBA review at any time, and the lender must refund any such fee considered unreasonable by the SBA. The lender may also charge an applicant an additional fee if, subject to prior written SBA approval, all or part of a loan will have extraordinary servicing needs. The additional fee cannot exceed 2% per year on the outstanding balance of the part requiring special servicing (e.g., field inspections for construction projects). The lender may also collect from the applicant necessary out-of-pocket expenses, including filing or recording fees, photocopying, delivery charges, collateral appraisals, environmental impact reports that are obtained in compliance with SBA policy, and other direct charges related to loan closing. The lender is prohibited from requiring the borrower to pay any fees for goods and services, including insurance, as a condition for obtaining an SBA guaranteed loan, and from imposing on SBA loan applicants processing fees, origination fees, application fees, points, brokerage fees, bonus points, and referral or similar fees. The lender is also allowed to charge the borrower a late payment fee not to exceed 5% of the regular loan payment when the borrower is more than 10 days delinquent on its regularly scheduled payment. The lender may not charge a fee for full or partial prepayment of a loan. For loans with a maturity of 15 years or longer, the borrower must pay to the SBA a subsidy recoupment fee when the borrower voluntarily prepays 25% or more of its loan in any one year during the first three years after first disbursement. The fee is 5% of the prepayment amount during the first year, 3% in the second year, and 1% in the third year. As shown in Table 2 , the total number and amount of SBA 7(a) loans approved (before and after cancellations and modifications) declined in FY2008 and FY2009, increased during FY2010 and FY2011, declined somewhat in FY2012, and have increased since then. The number and amount of 7(a) loans approved annually is higher than the number and amount of loans disbursed because some borrowers decide not to accept the loan for a variety of reasons, such as financing was secured elsewhere, the funds are no longer needed, or there was a change in business ownership. The SBA attributed the decreased number and amount of 7(a) loans approved in FY2008 and FY2009 to a reduction in the demand for small business loans resulting from the economic uncertainty of the recession (December 2007-June 2009) and to tightened loan standards imposed by lenders concerned about the possibility of higher loan default rates resulting from the economic slowdown. The SBA attributed the increased number of loans approved in FY2010 and FY2011 to legislation that provided funding to temporarily reduce the 7(a) program's loan fees and temporarily increase the 7(a) program's loan guaranty percentage to 90% for all standard 7(a) loans from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000. The fee subsidies and 90% loan guaranty percentage were in place during most of FY2010 and the first quarter of FY2011. The increased number and amount of 7(a) loans approved since FY2012 are generally attributed to improving economic conditions. Table 2 also provides the 7(a) program's unpaid principal balance by fiscal year. Precise measurements of the small business credit market are not available. However, the SBA has estimated that the small business credit market (outstanding bank loans of $1 million or less, plus credit extended by finance companies and other sources) is roughly $1.2 trillion. The 7(a) program's unpaid principal balance of $92.41 billion at the end of FY2018 was about 7.7% of that amount. One of the SBA's goals is to achieve a zero subsidy rate for its loan guaranty programs. A zero subsidy rate occurs when the SBA's loan guaranty programs generate sufficient revenue through fee collections and recoveries of collateral on purchased (defaulted) loans to not require appropriations to issue new loan guarantees. From 2005 to 2009, the SBA did not request appropriations to subsidize the cost of any of its loan guaranty programs, including the 7(a) program. However, as indicated in Table 3 , loan guaranty fees and loan liquidation recoveries did not generate enough revenue to cover loan losses in the 7(a) loan guaranty program from FY2010 through FY2013 and in the 504/CDC loan guaranty program from FY2012 through FY2015. Appropriations were provided to address the shortfalls. Congress did not approve appropriations for 7(a) and 504/CDC loan guaranty program credit subsidies for FY2016 through FY2019 because the President's budget request indicated that those programs did not require appropriations for credit subsidies in those fiscal years. In FY2017, the SBA spent $82.2 million on the 7(a) program for administrative expenses, including $63.0 million for loan making, $4.1 million for loan servicing, and $15.1 million for loan liquidation. Also, the SBA spent $36.9 million on lender oversight, including oversight of 7(a) lenders. The SBA anticipated that 7(a) program administrative expenses will be about $82.2 million in FY2018 and $84.5 million in FY2019. In addition, the SBA anticipated that it will spend about $36.9 million in FY2018 and $36.6 million in FY2019 for lender oversight of the SBA's various lending programs. In FY2017, borrowers used 7(a) loan proceeds to purchase land or make land improvements (26.62%); purchase a business (17.06%); finance working capital (15.59%); pay off loans, accounts payable or notes payable (13.23%); construct new buildings (6.06%); purchase equipment (5.76%); make leasehold improvements (3.25%); expand or renovate current buildings (2.39%); refinance existing debt (1.40%); and cover other expenses (8.64%). In 2008, the Urban Institute released the results of an SBA-commissioned study of the SBA's loan guaranty programs. As part of its analysis, the Urban Institute surveyed a random sample of SBA loan guaranty borrowers. The survey indicated that most of the 7(a) borrowers responding to the survey rated their overall satisfaction with their 7(a) loan and loan terms as either excellent (18%) or good (50%). One out of every five 7(a) borrowers (20%) rated their overall satisfaction with their 7(a) loan and loan terms as fair, and 6% rated their overall satisfaction with their 7(a) loan and loan terms as poor (7% reported don't know or did not respond). In addition, 90% of the survey's respondents reported that the 7(a) loan was either very important (62%) or somewhat important (28%) to their business success (2% reported somewhat unimportant, 3% reported very unimportant, and 4% reported don't know or did not respond). The Urban Institute found that about 9.9% of conventional small business loans are issued to minority-owned small businesses, and about 16% of conventional small business loans are issued to women-owned businesses. In FY2018, 32.8% of 7(a) loan approvals ($8.32 billion of $25.37 billion) were to minority-owned businesses (23.0% Asian, 6.0% Hispanic, 3.1% African-American, and 0.7% American Indian) and 13.6% ($3.46 billion of $25.37 billion) were to women-owned businesses. From its comparative analysis of conventional small business loans and the SBA's loan guaranty programs, the Urban Institute concluded the following: SBA's loan programs are designed to enable private lenders to make loans to creditworthy borrowers who would otherwise not be able to qualify for a loan. As a result, there should be differences in the types of borrowers and loan terms associated with SBA-guaranteed and conventional small business loans. Our comparative analysis shows such differences. Overall, loans under the 7(a) and 504 programs were more likely to be made to minority-owned, women-owned, and start-up businesses (firms that have historically faced capital gaps) as compared to conventional small business loans. Moreover, the average amounts for loans made under the 7(a) and 504 programs to these types of firms were substantially greater than conventional small business loans to such firms. These findings suggest that the 7(a) and 504 programs are being used by lenders in a manner that is consistent with SBA's objective of making credit available to firms that face a capital opportunity gap. Congressional interest in the 7(a) loan program has increased in recent years largely because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to assist in the economic recovery. During the 110 th and 111 th Congresses, several laws were enacted to increase the supply and demand for capital for both large and small businesses. For example, in 2008, Congress adopted P.L. 110-343 , the Emergency Economic Stabilization Act of 2008, which authorized the Troubled Asset Relief Program (TARP). Under TARP, the U.S. Department of the Treasury was authorized to purchase or insure up to $700 billion in troubled assets, including small business loans, from banks and other financial institutions. The law's intent was "to restore liquidity and stability to the financial system of the United States." P.L. 111-203 , the Dodd-Frank Wall Street Reform and Consumer Protection Act, reduced total TARP purchase authority from $700 billion to $475 billion. The Department of the Treasury's authority to make new financial commitments under TARP ended on October 3, 2010. The Department of the Treasury has disbursed approximately $430 billion in TARP funds, including $370 million to purchase SBA 7(a) loan guaranty program securities. In addition, as mentioned previously, in 2009, ARRA provided an additional $730 million for SBA programs, including $375 million to temporarily reduce fees in the SBA's 7(a) and 504/CDC loan guaranty programs and increase the 7(a) program's maximum loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90% for all standard 7(a) loans. Congress subsequently provided another $265 million, and authorized the SBA to reprogram another $40 million, to extend the fee reductions and loan modification through May 31, 2010, and the Small Business Jobs Act of 2010 provided another $505 million (plus $5 million for administrative expenses) to extend the fee reductions and loan modification from September 27, 2010, through December 31, 2010. Also, P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the use of any funding remaining from the Small Business Jobs Act of 2010 to extend the fee subsidies and 90% maximum loan guaranty percentage through March 4, 2011, or until the available funding was exhausted. Funding for these purposes was exhausted on January 3, 2011. The Obama Administration argued that TARP and the additional funding for the SBA's loan guaranty programs helped to improve the small business lending environment and supported "the retention and creation of hundreds of thousands of jobs." Critics argued that small business tax reduction, reform of financial credit market regulation, and federal fiscal restraint are the best means to assist small business economic growth and job creation. Over the years, the SBA's Office of Inspector General (OIG) and the U.S. Government Accountability Office (GAO) have independently reviewed the SBA's administration of the SBA's loan guaranty programs. Although improvements have been noted, both agencies have reported deficiencies in the SBA's administration of its loan guaranty programs that they argue need to be addressed, including issues involving the oversight of 7(a) lenders and the lack of outcome-based performance measures. On December 1, 2000, the OIG released its FY2001 list of the most serious management challenges facing the SBA and included, for the first time, the oversight of SBA lenders. Since then, the OIG has determined that the SBA has made significant progress in improving its oversight of SBA lenders. For example The SBA established an Office of Lender Oversight (renamed the Office of Credit Risk Management in 2007), led by an Associate Administrator, which, in October 2000, drafted a strategic plan to serve as a basis for developing a Standard Operating Procedure (SOP) for lender oversight and, among other activities, initiated "steps to develop and implement a comprehensive loan monitoring system to evaluate lender performance. The system will collect data on lenders such as delinquency default rates, liquidations, loan payments, and loan originations." In 2004, the SBA's National Guaranty Purchase Center developed a quality control plan "to review the quality of the guaranty purchase process." In 2006, the SBA issued an SOP that established procedures for on-site, risk-based lender reviews and safety and soundness examinations for 7(a) lenders and Certified Development Companies (CDCs) participating the SBA's 504/CDC loan guaranty program. In 2007, the SBA completed the centralization of all 7(a) loan processing activities and, with very limited exception, ended loan making, servicing, liquidation, and guaranty purchase activity at district offices. In 2008, the SBA issued an SOP for 7(a) lender oversight which included uniform policies and procedures for the evaluation of lender performance and the SBA's Office of Financial Program Operations (OFPO) began designing "a comprehensive quality control program across all of its centers." Previously, quality control was conducted within each loan center (Standard 7(a) Loan Guaranty Processing Center, Commercial Loan Service Center, and National Guaranty Purchase Center) "at various levels of sophistication." The SBA issued an interim final rule in the Federal Register on December 1, 2008, incorporating the SBA's risk-based lender oversight program into the SBA's regulations. In 2010, the SBA's OFPO established its agency-wide quality control program, which is designed to improve service and "reduce waste, fraud, and abuse" by ensuring "that centers accurately and consistently apply statutory, regulatory, and procedural loan program requirements." The SBA also developed a "risk-based, off-site analysis of lending partners through its Loan/Lender Monitoring System (L/LMS), a state-of-the-art portfolio monitoring system that incorporates credit scoring metrics for portfolio management purposes." In 2012-2013, the SBA "(1) developed risk profiles and lender performance thresholds, (2) developed a select analytical review process to allow for virtual risk-based reviews, (3) updated its lender risk rating model to better stratify and predict risk, and (4) conducted test reviews under the new risk-based review protocol." In 2013-2014, the SBA "improved its monitoring and verification of corrective actions by lenders by: (1) developing corrective action assessment procedures, (2) finalizing a system to facilitate the corrective action process, and (3) populating the system with lender oversight results requiring corrective action." In 2015, the SBA's Office of Credit Risk Management (OCRM) "engaged contractor support to expand on its corrective action follow-up process. Additionally, OCRM issued its FY2015 Risk Management Oversight Plan, which included plans to conduct 170 corrective action reviews between 7(a) and 504 lenders." In 2016, OCRM reported that it conducted 147 corrective action follow-up assessments, established performance measures and risk mitigation goals for the SBA's entire lending portfolio, and "conducted portfolio analyses of problem lenders with heavy concentrations in SBA 7(a) lending and sales on the secondary market." Despite these improvements, the OIG continues to list lender oversight as one of the most serious management challenges facing the SBA because it argues that several issues that it has identified in audits have not been fully addressed. Specifically, the OIG reports that the SBA needs to show that the portfolio risk management program is used to support risk based decisions, implement additional controls to mitigate risks, develop an effective method for tracking loan agents, and update regulations on loan agents. GAO has argued that the 7(a) program's performance measures (e.g., number of loans approved, loans funded, and firms assisted across the subgroups of small businesses) provide limited information about the impact of the loans on participating small businesses: The program's performance measures focus on indicators that are primarily output measures–for instance, they report on the number of loans approved and funded. But none of the measures looks at how well firms do after receiving 7(a) loans, so no information is available on outcomes. As a result, the current measures do not indicate how well the agency is meeting its strategic goal of helping small businesses succeed. The SBA's OIG has made a similar argument concerning the SBA's Microloan program's performance measures. Because the SBA uses similar program performance measures for its Microloan and 7(a) programs, the OIG's recommendations could also be applied to the SBA's 7(a) program. Specifically, as part of its audit of the SBA Microloan program's use of ARRA funds, the OIG found that the SBA's performance measures for the Microloan program are based on the number of microloans funded, the number of small businesses assisted, and program's loan loss rate. It argued that these "performance metrics ... do not ensure the ultimate program beneficiaries, the microloan borrowers, are truly assisted by the program" and "without appropriate metrics, SBA cannot ensure the Microloan program is meeting policy goals." It noted that the SBA does not track the number of microloan borrowers who remain in business after receiving a microloan to measure the extent to which the loans contributed to the success of borrowers and does not determine the effect that technical training assistance may have on the success of microloan borrowers and their ability to repay loans. It recommended that the SBA "develop additional performance metrics to measure the program's achievement in assisting microloan borrowers in establishing and maintaining successful small businesses." In its response to GAO's recommendation to develop additional performance measures for the 7(a) program, the SBA formed, in July 2014, an impact evaluation working group to develop a methodology for conducting impact evaluations of the agency's programs using administrative data sources residing at the SBA and in other federal agencies, such as the U.S. Census Bureau and the Bureau of Labor Statistics. Numerous SBA program offices participated in this working group and each office developed its own program evaluation methodology or established program evaluation frameworks. More recently, the SBA indicated in its FY2017 congressional budget justification document that although it "continues to face barriers gathering outcome rich evaluation data with current restrictions in collecting personal identification information (PII) and business identification information (BII)" it "plans to further develop its analytical capabilities, enhance collaboration across its programs, provide evaluation-specific trainings, and broaden use of impact evaluations to support senior leaders and institutionalize the evidence-based process across programs." To encourage evidence-based evaluations across its programs, the SBA has created an annual Enterprise Learning Agenda designed to "help program managers continue to build and use evidence and to foster an environment of continuous learning." As part of this agenda building process, the SBA identifies programs for evidence-based evaluation and undertakes both internal evaluations using available data or contracts with third parties to conduct the evaluations. Congress authorized several changes to the 7(a) program during the 111 th Congress in an effort to increase the number and amount of 7(a) loans. During the 111 th Congress, the Obama Administration supported congressional efforts to temporarily subsidize fees for the 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90%. Congress subsequently provided nearly $1.1 billion to temporarily subsidize fees for the 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's maximum loan guaranty percentage to 90% for all standard 7(a) loans. The Obama Administration also proposed the following modifications to several SBA programs, including the 7(a) program: increase the maximum loan size for 7(a) loans from $2 million to $5 million; increase the maximum loan size for the 504/CDC program from $2 million to $5 million for regular projects and from $4 million to $5.5 million for manufacturing projects; increase the maximum loan size for microloans to small business concerns from $35,000 to $50,000; increase the maximum loan limits for lenders in their first year of participation in the Microloan program, from $750,000 to $1 million, and from $3.5 million to $5 million in the subsequent years; temporarily increase the cap on SBAExpress loans from $350,000 to $1 million; and temporarily allow in FY2010 and FY2011, with an option to extend into FY2012, the refinancing of loans for owner-occupied commercial real estate that are within one year of maturity under the SBA's 504/CDC program. The Obama Administration argued that increasing the maximum loan limits for the 7(a), 504/CDC, Microloan, and SBAExpress programs would allow the SBA to "support larger projects," which would "allow the SBA to help America's small businesses drive long-term economic growth and the creation of jobs in communities across the country." The Administration also argued that increasing the maximum loan limits for these programs would be "budget neutral" over the long run and "help improve the availability of smaller loans." Critics of the Obama Administration's proposals to increase the SBA's maximum loan limits argued that higher loan limits might increase the risk of defaults, resulting in higher guaranty fees or the need to provide the SBA additional funding, especially for the SBAExpress program, which has experienced somewhat higher default rates than other SBA loan guaranty programs. Others advocated a more modest increase in the maximum loan limits to ensure that the 7(a) program "remains focused on startup and early-stage small firms, businesses that have historically encountered the greatest difficulties in accessing credit," and "avoids making small borrowers carry a disproportionate share of the risk associated with larger loans." Others argued that creating a small business direct lending program within the SBA would reduce paperwork requirements and be more efficient in providing small businesses access to capital than modifying existing SBA programs that rely on private lenders to determine if they will issue the loans. Also, as mentioned previously, others argued that providing additional resources to the SBA or modifying the SBA's loan programs as a means to augment small business access to capital is ill-advised. In their view, the SBA has limited impact on small businesses' access to capital. They argued that the best means to assist small business economic growth and job creation is to focus on small business tax reduction, reform of financial credit market regulation, and federal fiscal restraint. As mentioned previously, in 2009, ARRA provided an additional $730 million for SBA programs, including $375 million to temporarily reduce fees in the SBA's 7(a) and 504/CDC loan guaranty programs ($299 million) and increase the 7(a) program's maximum loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90% for all standard 7(a) loans ($76 million). P.L. 111-240 provided $505 million (plus $5 million for administrative expenses) to extend the 7(a) program's 90% maximum loan guaranty percentage and 7(a) and 504/CDC loan guaranty programs' fee subsidies through December 31, 2010 (later extended to March 4, 2011), or until available funding was exhausted (which occurred on January 3, 2011). The act also made the following changes to the SBA's programs: increased the maximum loan size for 7(a) loans from $2 million to $5 million; temporarily increased for one year (through September 27, 2011) the cap on SBAExpress loans from $350,000 to $1 million; increased the maximum loan size for the 504/CDC loans from $1.5 million to $5 million for regular projects, from $2 million to $5 million for projects meeting one of the program's specified public policy goals, and from $4 million to $5.5 million for manufacturers; increased the maximum loan size for the Microloan program from $35,000 to $50,000; authorized the SBA to establish an alternative size standard for the 7(a) and 504/CDC programs that uses maximum tangible net worth and average net income as an alternative to the use of industry standards and established an interim size standard of a maximum tangible net worth of not more than $15 million and an average net income after federal taxes (excluding any carryover losses) for the preceding two fiscal years of not more than $5 million; and allowed 504/CDC loans to be used to refinance up to $7.5 billion in short-term commercial real estate debt each fiscal year for two years after enactment (through September 27, 2012) into long-term fixed rate loans. The act also authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to encourage community banks to provide small business loans ($4 billion was issued), a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, and about $12 billion in tax relief for small businesses. It also contained revenue raising provisions to offset the act's cost and authorized a number of changes to other SBA loan and contracting programs. Congress did not approve any changes to the 7(a) program during the 112 th Congress. However, several bills were introduced during the 112 th Congress that would have changed the program. S. 1828 , a bill to increase small business lending, and for other purposes, was introduced on November 8, 2011, and referred to the Senate Committee on Small Business and Entrepreneurship. The bill would have reinstated for a year following the date of its enactment the temporary fee subsidies for the 7(a) and 504/CDC loan guaranty programs and the 90% loan guaranty for standard 7(a) loans, which were originally authorized by ARRA and later extended by several laws, including the Small Business Jobs Act of 2010. H.R. 2936 , the Small Business Administration Express Loan Extension Act of 2011, introduced on September 15, 2011, and referred to the House Committee on Small Business, would have extended a one-year increase in the maximum loan amount for the SBAExpress program from $350,000 to $1 million for an additional year. The temporary increase in that program's maximum loan amount was authorized by P.L. 111-240 , the Small Business Jobs Act of 2010, and expired on September 27, 2011 (see Appendix ). S. 532 , the Patriot Express Authorization Act of 2011, introduced on March 9, 2011, and referred to the Senate Committee on Small Business and Entrepreneurship, would have provided statutory authorization for the Patriot Express Pilot Program. This program was subsequently discontinued by the SBA on December 31, 2013. The bill would have increased the program's maximum loan amount from $500,000 to $1 million, and it would have increased the guaranty percentages from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to up to 85% of loans of $500,000 or less and up to 80% of loans exceeding $500,000. H.R. 2451 , the Strengthening Entrepreneurs' Economic Development Act of 2013, was introduced on June 20, 2013, and referred to the House Committee on Small Business. It would have authorized the SBA to make direct loans of up to $150,000 to businesses with fewer than 20 employees. It would have also required the SBA to assess, collect, and retain a fee with respect to the outstanding balance of the deferred participation share of each 7(a) loan in excess of $2 million that is no more than is necessary to reduce to zero the SBA's cost of making the loan. H.R. 2461 , the SBA Loan Paperwork Reduction Act of 2013, was introduced on June 20, 2013, and referred to the House Committee on Small Business. It would have provided statutory authorization for the Small Loan Advantage (SLA) pilot program. The SBA started that program on February 15, 2011. It provided a streamlined application process for 7(a) loans of up to $350,000 if the loan received an acceptable credit score from the SBA prior to the loan being submitted for processing. The SBA adopted the SLA application process as the model for processing all non-express 7(a) loans of $350,000 or less, effective January 1, 2014. As mentioned previously, the Obama Administration waived the up-front, one time loan guaranty fee and ongoing servicing fee for 7(a) loans of $150,000 or less approved in FY2014 (and later extended the fee waiver in FY2015 and FY2016). H.R. 2462 , the Small Business Opportunity Acceleration Act of 2013, introduced on June 20, 2013, and referred to the House Committee on Small Business, would have made the fee waiver permanent. Also, the Obama Administration waived the up-front, one-time loan guaranty fee for veteran loans under the SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015 (called the Veterans Advantage Program). S. 2143 , the Veterans Entrepreneurship Act, would have authorized this fee waiver and made it permanent. Also, P.L. 113-235 provided statutory authorization to waive the 7(a) SBAExpress program's guarantee fee for veterans (and their spouse) in FY2015. P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, authorized and made permanent the waiver of the up-front, one-time loan guaranty fee for veterans (and their spouse) in the SBAExpress program beginning on or after October 1, 2015, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The act also increased the 7(a) program's authorization limit from $18.75 billion in FY2015 to $23.5 billion. On June 25, 2015, the SBA informed Congress that the 7(a) program "is on track to hit its authorization ceiling of $18.75 billion well before the end of FY2015." The SBA indicated that "our activity and trend analysis reveal a strong uptick that, if sustained, would exceed our lending authority ceiling by late August." If that were to occur, and in the absence of statutory authority to do otherwise, the SBA reported that it would have to suspend 7(a) loan making for the remainder of the fiscal year. The SBA requested an increase in the 7(a) loan program's authorization limit to $22.5 billion in FY2015. On July 23, 2015, citing "unprecedented demand," the SBA suspended 7(a) program lending. The SBA indicated that it would continue to process loan applications "up to the point of approval" and then place approved loans "into a queue awaiting the availability of program authority." Loans would be released "once program authority became available due to Congressional action or as a result of cancellations of loans previously approved this fiscal year." Applications would then "be funded in the order they were approved by SBA, with the exception that requests for increases to previously approved loans will be funded before applications for new loans." The SBA resumed 7(a) lending on July 28, 2015, following P.L. 114-38 's enactment. In addition to increasing the 7(a) program's authorization limit for FY2015, the act added requirements designed to ensure that SBA loans do not displace private sector loans (e.g., the SBA Administrator may not guarantee a 7(a) loan if the lender determines that the borrower is unable to obtain credit elsewhere solely because the liquidity of the lender depends upon the guarantied portion of the loan being sold on the secondary market, or if the sole purpose for requesting the guarantee is to allow the lender to exceed the lender's legal lending limit), and requires the SBA to report, on a quarterly basis, specified 7(a) program statistics to the House and Senate Committees on Appropriations and Small Business. These required statistics are designed to inform the committees of the SBA's pace of 7(a) lending, provide estimates concerning the date on which the program's authorization limit may be reached, and present information concerning early defaults and actions taken by the SBA to combat early defaults. As mentioned previously, P.L. 114-113 increased the 7(a) program's authorization limit from $23.5 billion in FY2015 to $26.5 billion for FY2016. In addition, P.L. 114-223 , the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, authorized the SBA to use funds from its business loan program account "to accommodate increased demand for commitments for [7(a)] general business loans" for the duration of the continuing resolution (initially December 9, 2016, later extended by P.L. 114-254 , the Further Continuing and Security Assistance Appropriations Act, 2017, to April 28, 2017). In a related development, S. 2496 , the Help Small Businesses Access Affordable Credit Act, introduced on February 2, 2016, would have authorized the SBA Administrator, with prior approval of the House and Senate Committees on Appropriations, to make loans in an amount equal to not more than 110% of the 7(a) program's authorization limit if the demand for 7(a) loans should exceed that limit. The Obama Administration also requested authorization to allow the SBA Administrator to continue to issue loans should the demand for 7(a) loans exceed the program's authorization limit. Also. S. 2992 , the Small Business Lending Oversight Act of 2016, would have required the Director of the SBA's Office of Credit Risk Management (OCRM) to impose penalties on 7(a) lenders who "knowingly and repeatedly" undertake specified activities; required the SBA to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; redefined the credit elsewhere requirement; authorized fees to be used to support OCRM operations; required the SBA to identify potential loan risks by lenders participating in the Preferred Lenders Program by requiring the SBA, at the end of each year, to "calculate the percentage of loans in a lender's portfolio made without a contribution of borrower equity when the loan's purpose was to establish a new small business concern, to effectuate a change of small business ownership, or to purchase real estate"; and, among other provisions, prohibited the SBA from approving any loan if its financing is more than 100% of project costs. Legislation was also introduced ( S. 2125 , the Small Business Lending and Economic Inequality Reduction Act of 2015) to provide permanent, statutory authorization for the Community Advantage Pilot program (see Appendix ). The SBA announced on December 28, 2015, that it was extending the Community Advantage Pilot program through March 31, 2020. It had been set to expire on March 15, 2017. Recognizing that 7(a) loan approvals during the first half of FY2017 were about 9% higher than during the first half of FY2016, Congress included a provision in P.L. 115-31 , the Consolidated Appropriations Act, 2017, that increased the 7(a) program's authorization limit to $27.5 billion in FY2017 from $26.5 billion in FY2016. Congress also approved legislation ( P.L. 115-141 , the Consolidated Appropriations Act, 2018) that increased the 7(a) program's authorization limit to $29.0 billion in FY2018. In addition, as mentioned earlier, P.L. 115-189 , the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit. The SBA is required to provide at least 30 days' notice of its intent to exceed the 7(a) loan program's authorization limit to the House and Senate Committees on Small Business and the House and Senate Committees on Appropriations' Subcommittees on Financial Services and General Government and may exercise this option only once per fiscal year. Also, P.L. 115-232 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019, included provisions to make 7(a) loans more accessible to employee-owned small businesses (ESOPs) and cooperatives. The act authorizes the SBA to make "back-to-back" loans to ESOPs to better align with industry practices (the loan proceeds must only be used to make a loan to a qualified employee trust); clarifies that 7(a) loans to ESOPs may be made under the Preferred Lenders Program; allows the seller to remain involved as an officer, director, or key employee when the ESOP or cooperative has acquired 100% ownership of the small business; and authorizes the SBA to finance transition costs to employee ownership and waive any mandatory equity injection by the ESOP or cooperative to help finance the change of ownership. The act also directs the SBA to create outreach programs with Small Business Investment Companies and Microloan intermediaries to make their lending programs more accessible to all eligible ESOPs and cooperatives, an interagency working group to promote lending to ESOPs and cooperatives, and a Small Business Employee Ownership and Cooperatives Promotion Program, administered by Small Business Development Centers, to offer technical assistance and training to small businesses on the transition to employee ownership through cooperatives and ESOPs. Congress did not focus much attention on the Trump Administration's proposal in its FY2019 budget request to "introduce counter-cyclical policies in SBA's business guaranty loan programs and update certain fees structures to offset $155 million in business loan administration." As mentioned earlier, the proposal included raising $93 million in additional revenue by allowing the SBA to set the 7(a) program's annual servicing fee at rates below zero credit subsidy; increasing the 7(a) loan program's FY2019 annual servicing fee's cap from 0.55% to 0.625%; and increasing the FY2019 upfront loan guarantee fee on 7(a) loans over $1 million by 0.25%. The Administration also requested that the 7(a) loan program's authorization limit be increased to $30.0 million in FY2019; that the SBA be allowed to further increase the 7(a) loan program's authorization amount in FY2019 by 15% under specified circumstances "to better equip the SBA to meet peaks in demand while continuing to operate at zero subsidies;" that the SBA be allowed to impose an annual fee, not to exceed 0.05% per year, of the outstanding balance on 7(a) secondary market trust certificates to help offset administrative costs; and that the SBAExpress program's loan limit be increased from $350,000 to $1 million. P.L. 116-6 , the Consolidated Appropriations Act, 2019, increased the 7(a) program's authorization limit to $30.0 billion in FY2019. The congressional debate concerning the SBA's 7(a) program during the 111 th Congress was not whether the federal government should act, but which federal policies would most likely enhance small businesses' access to capital and result in job retention and creation. As a general proposition, some Members of Congress argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations with the expectation that in so doing small businesses will create jobs. Others worried about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocated business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to help small businesses further economic growth and job creation. In terms of specific program changes, increasing the 7(a) program's loan limit, extending the 7(a) program's temporary fee subsidies and 90% maximum loan guaranty percentage, and establishing an alternative size standard for the 7(a) program were all designed to achieve the same goal: to enhance job creation by increasing the ability of 7(a) borrowers to access credit at affordable rates. However, determining how specific changes in federal policy are most likely to enhance job creation is a challenging task. For example, a 2008 Urban Institute study concluded that differences in the term, interest rate, and amount of SBA financing were "not significantly associated with increasing sales or employment among firms receiving SBA financing." The study also reported that the analysis accounted for less than 10% of the variation in firm performance. The Urban Institute suggested that local economic conditions, local zoning regulations, state and local tax rates, state and local business assistance programs, and the business owner's charisma or business acumen also "may play a role in determining how well a business performs after receipt of SBA financing." As the Urban Institute study suggests, because many factors influence business success, measuring the 7(a) program's effect on job retention and creation is complicated. That task is made even more challenging by the absence of performance-oriented measures that could serve as a guide. Both GAO and the SBA's OIG have recommended that the SBA adopt outcome performance-oriented measures for its loan guaranty programs, such as tracking the number of borrowers who remain in business after receiving a loan to measure the extent to which the program contributed to their ability to stay in business. Other performance-oriented measures that Congress might also consider include requiring the SBA to survey 7(a) borrowers to measure the difficulty they experienced in obtaining a loan from the private sector and the extent to which the 7(a) loan or technical assistance received contributed to their ability to create jobs or expand their scope of operations. The 7(a) program has several specialized programs that offer streamlined and expedited loan procedures for particular groups of borrowers, including the SBAExpress, Export Express, and Community Advantage programs. Lenders must be approved by the SBA for participation in these programs. SBAExpress Program The SBAExpress program was established as a pilot program by the SBA on February 27, 1995, and made permanent through legislation, subject to reauthorization, in 2004 ( P.L. 108-447 , the Consolidated Appropriations Act, 2005). The program is designed to increase the availability of credit to small businesses by permitting lenders to use their existing documentation and procedures in return for receiving a reduced SBA guaranty on loans. It provides a 50% loan guaranty on loan amounts up to $350,000. As shown in Table A-1 , the SBA approved 27,794 SBAExpress loans (46.1% of total 7(a) program loan approvals), totaling $1.98 billion (7.8% of total 7(a) program amount approvals) in FY2018. The program's higher loan amount in FY2011 was due, at least in part, to a provision in P.L. 111-240 , the Small Business Jobs Act of 2010, which temporarily increased the SBAExpress program's loan limit to $1 million for one year following enactment (through September 27, 2011). During the 112 th Congress, H.R. 2936 , the Small Business Administration Express Loan Extension Act of 2011, would have extended the SBAExpress program's higher loan limit for an additional year (through September 27, 2012). SBAExpress loan proceeds can be used for the same purposes as those of the 7(a) program (expansion, renovation, new construction, the purchase of land or buildings, the purchase of equipment, fixtures, and lease-hold improvements, working capital, to refinance debt for compelling reasons, seasonal line of credit, and inventory); except that participant debt restructure cannot exceed 50% of the project and may be used for revolving credit. The program's loan terms are the same as those of the 7(a) program (the loan maturity for working capital, machinery, and equipment (not to exceed the life of the equipment) is typically 5 years to 10 years; and the loan maturity for real estate is up to 25 years, except that the term for a revolving line of credit cannot exceed 7 years. The SBAExpress loan's interest rates and fees are the same as those used for the 7(a) program. To account for the program's lower guaranty rate of 50%, lenders are allowed to perform their own loan analysis and procedures and receive SBA approval with a targeted 36-hour maximum turnaround time. Also, collateral is not required for loans of $25,000 or less. Lenders are allowed to use their own established collateral policy for loans over $25,000. As mentioned earlier, the SBA waived the up-front, one-time loan guaranty fee for 7(a) loans of $125,000 or less approved in FY2018. The SBA also waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $125,001 to $350,000 in FY2018. In addition, P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, provided statutory authorization and made permanent the veteran's fee waiver in the SBAExpress program, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The SBA waived this fee in FY2016, FY2017, and FY2018 and is waiving it in FY2019. The SBA indicated that its fee waivers for veterans are part "of SBA's broader efforts to make sure that veterans have the tools they need to start and grow a business." In a related development, the SBA discontinued the Patriot Express Pilot Program on December 31, 2013. It provided loans of up to $500,000 (with a guaranty of up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000) to veterans and their spouses. It had been in operation since 2007, and, like the SBAExpress program, featured streamlined documentation requirements and expedited loan processing. Over its history, the Patriot Express Pilot Program disbursed 9,414 loans amounting to more than $791 million. Export Express The Export Express program was established as a subprogram of the SBAExpress program in 1998, and made a separate pilot program in 2000. It was made permanent through legislation, subject to reauthorization, in 2010 ( P.L. 111-240 , the Small Business Jobs Act of 2010). The Export Express program is designed to increase the availability of credit to current and prospective small business exporters that have been in business, though not necessarily in exporting, for at least 12 full months, particularly those small businesses needing revolving lines of credit. Export Express loans may not be used to finance overseas operations, except for the marketing or distribution of products or services exported from the United States. The program is generally subject to the same loan processing, making, closing, servicing, and liquidation requirements as well as the same maturity terms, interest rates, and applicable fees as the SBAExpress program. Two key differences between the two programs is that the Export Express program's maximum loan amount is up to $500,000, and its guaranty rate is 90% for loans of $350,000 or less, and 75% for loans exceeding $350,000. There were 215 lenders with approved SBA Export Express loan guaranties at the end of FY2017. These lenders are located in 46 states, Guam, and Puerto Rico. As shown in Table A-2 , the SBA approved 59 Export Express loans totaling $15.45 million in FY2018. Community Advantage 7(a) Loan Initiative The SBA's Community Advantage (CA) 7(a) loan initiative became operational on February 15, 2011. Originally announced as a three-year pilot program (through March 15, 2014), it subsequently was extended through March 15, 2017; March 31, 2020; and September 30, 2022. As of September 12, 2018, there were 113 approved CA lenders, 99 of which were actively making and servicing CA loans. The CA loan initiative is designed to increase lending to underserved low- and moderate-income communities. It, along with the now-discontinued Small Loan Advantage program, replaced the Community Express Pilot Program, which also was designed to increase lending to underserved communities. The CA loan initiative provides the same loan terms, guaranty fees, and guaranty as that of the 7(a) program on loan amounts up to $250,000 (85% for loans up to $150,000 and 75% for those greater than $150,000). Loan proceeds can be used for the same purposes as those of the 7(a) program. The loan's maximum interest rate is prime, plus 6%. The program has an expedited approval process, which includes a two-page application for borrowers and a goal of completing the approval process within 5 to 10 days. The CA loan initiative is designed to increase "the number of SBA 7(a) lenders who reach underserved communities, targeting community-based, mission-focused financial institutions which were previously not able to offer SBA loans." These mission-focused financial institutions include the following: nonfederally regulated Community Development Financial Institutions certified by the U.S. Department of the Treasury, SBA's Certified Development Companies, SBA's nonprofit microlending intermediaries, and, added in December 2015, SBA's Intermediary Lending Pilot Program intermediaries. They are expected to maintain at least 60% of their SBA loan portfolio in underserved markets, including loans to small businesses in, or that have more than 50% of their full-time workforce residing in, low-to-moderate income (LMI) communities; Empowerment Zones and Enterprise Communities; HUBZones; start-ups (firms in business less than two years); businesses eligible for the SBA's Veterans Advantage program; Promise Zones (added in December 2015); and Opportunity Zones and Rural Areas (added in October 2018). The SBA placed a moratorium, effective October 1, 2018, on accepting new CA lender applications, primarily as a means to mitigate the risk of future loan defaults. The SBA also increased the minimum acceptable credit score for CA loans "that satisfies the need to consider several required underwriting criteria" from 120 to 140; increased the wait time for CA lenders ineligible for delegated lender status at the time of approval as a CA lender from 6 months to 12 months and increased the number of CA loans that must be initially dispersed before a CA lender may process applications under delegated authority from five to seven loans; increased the loan loss reserve requirement for CA loans sold in the secondary market from 3% to 5% of the outstanding amount of the guaranteed portion of each loan; modified requirements related to the refinancing of debts with a CA loan; limited fees that can be charged by a CA lender for assistance in obtaining a CA loan to no more than $2,500, with the exception of necessary out-of-pocket costs such as filing or recording fees; and as mentioned previously, added Opportunity Zones and Rural Areas to the list of economically distressed communities that are eligible for a CA loan. As shown in Table A-3 , the SBA approved 1,118 CA loans amounting to $157.5 million in FY2018 and 4,906 CA loans amounting to $643.72 million from the time the program became operational to the end of FY2018. As mentioned previously, legislation was introduced during the 114 th Congress ( S. 2125 , the Small Business Lending and Economic Inequality Reduction Act of 2015) to provide the Community Advantage Pilot program permanent, statutory authorization.
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The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty programs designed to encourage lenders to provide loans to small businesses "that might not otherwise obtain financing on reasonable terms and conditions." The SBA's 7(a) loan guaranty program is considered the agency's flagship loan program. Its name is derived from Section 7(a) of the Small Business Act of 1953 (P.L. 83-163, as amended), which authorizes the SBA to provide business loans and loan guaranties to American small businesses. In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25.4 billion. The average approved 7(a) loan amount was $420,401. Proceeds from 7(a) loans may be used to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. This report discusses the rationale provided for the 7(a) program; the program's borrower and lender eligibility standards and program requirements; and program statistics, including loan volume, loss rates, use of proceeds, borrower satisfaction, and borrower demographics. It also examines issues raised concerning the SBA's administration of the 7(a) program, including the oversight of 7(a) lenders and the program's lack of outcome-based performance measures. The report also surveys congressional and presidential actions taken in recent years to enhance small businesses' access to capital. For example, Congress approved legislation during the 111th Congress to provide more than $1.1 billion to temporarily subsidize the 7(a) and 504/Certified Development Companies (504/CDC) loan guaranty programs' fees and temporarily increase the 7(a) program's maximum loan guaranty percentage to 90% (funding was exhausted on January 3, 2011); raise the 7(a) program's gross loan limit from $2 million to $5 million; and establish an alternative size standard for the 7(a) and 504/CDC loan programs. The SBA waived the up-front, one-time loan guaranty fee for smaller 7(a) loans from FY2014 through FY2018; and is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reducing the up-front one-time guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019. The SBA has also waived the up-front, one-time loan guaranty fee for veteran loans under the SBAExpress program (up to $350,000) since January 1, 2014; and reduced the up-front, one-time loan guaranty fee on non-SBAExpress 7(a) loans to veterans from FY2015 through FY2018. P.L. 114-38, the Veterans Entrepreneurship Act of 2015, provided statutory authorization and made permanent the veteran's fee waiver under the SBAExpress program, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. Congress also approved legislation that increased the 7(a) program's authorization limit from $18.75 billion (on disbursements) in FY2014 to $23.5 billion in FY2015, $26.5 billion in FY2016, $27.5 billion in FY2017, $29.0 billion in FY2018, and $30 billion in FY2019. P.L. 115-189, the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator, starting in FY2019 and after providing at least 30 days' notice to specified congressional committees, to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit. The Appendix provides a brief description of the 7(a) program's SBAExpress, Export Express, and Community Advantage programs.
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Timber harvesting on federal lands is a long-standing activity which sometimes generates controversy. Most timber harvesting on federal lands occurs on lands directed to provide a regular output of multiple uses under current law. Determining the proportions of these uses, in whole and on individual lands, is challenging for land management agencies. Often at issue is the appropriate use of federal lands for timber harvesting under these policies, including what amount of timber harvesting should occur and what constitutes proper balance among timber harvesting and other uses. Congress has authorized timber harvesting on certain federal lands under specified circumstances. Most timber harvesting on federal lands occurs on two land systems. The majority of harvests occur on the National Forest System (NFS), which is managed by the Forest Service (FS) within the Department of Agriculture (USDA). Harvests also occur on the public lands managed by the Bureau of Land Management (BLM) within the Department of the Interior (DOI). The FS manages 144.9 million acres of forest, while the BLM manages 37.6 million acres of forest (see Figure 1 ). Together, FS and BLM forest comprises 76% of federal forest area and 23% of all forest in the United States. Within their respective forest, the FS has 96.1 million acres of timberlands, and the BLM has 6.1 million acres of timberlands. The United States has 765.5 million acres of forest, of which 514.4 million acres is timberland and 57% is private. The United States has 57.0 million acres of woodland. Timber harvesting is the physical cutting and removal of trees or parts of trees from a given forested site. Harvested timber , or cut and removed trees, is the raw material for items made of wood, such as lumber, plywood, paper, and other products. Timber harvesting may occur on private, federal, or non-federal publicly owned lands, and may be conducted by the landowner or by another entity they allow to do so. Most timber harvesting in the United States is conducted on private lands: in 2011, 88% of timber harvests were conducted on private lands, and in 2012, 90% of wood and paper products in the United States originated on private lands. FS and BLM conduct timber sales as the most general way to allow timber harvesting on their respective lands, although they may allow harvesting in other ways. A timber sale is a formal process whereby an entity may purchase a contract to cut and remove specified timber. FS and BLM receive revenue from the sale of the contract. Information on timber harvesting in this report, such as harvested volume, harvested value, and other statistics, derives from FS and BLM data and may include timber harvested through timber sales or other means. Both FS and BLM timber sale planning and implementation proceed under similar principles of achieving multiple use and sustained yield. Both agencies conduct timber harvesting for various purposes. Both plan long-term timber management by designating areas that can support sustainable timber harvest and calculating yields that can be taken without permanent impairment. In the short term, both agencies create plans for timber sales, determine the value of offered timber and specify what timber may be cut, and conduct sales in a competitive manner open to the public. Timber harvesting may also occur on two other federal land systems, the National Park System, managed by the National Park Service, and the National Wildlife Refuge System (NWRS), managed by the Fish and Wildlife Service (both agencies are within DOI). In the case of the National Park System, the Secretary may dispose of timber to control insects and diseases or to conserve natural or historic resources. In the case of the NWRS, the Secretary of the Interior may permit timber harvesting to achieve desired fish and wildlife habitat conditions. On both systems, timber harvesting is rare, and harvested volumes are small. This report provides an overview of timber harvesting on FS and BLM lands. The report describes general statutory authorities and regulations, planning activities, timber sales, and trends in the volume and value of timber harvested, first from FS lands, and then for BLM lands. It concludes with a discussion of issues Congress has debated concerning timber harvesting and federal lands. The National Forest System comprises nearly 193 million acres. It is made up of 154 national forests, national grasslands, and other units such as research and experimental areas. Approximately 75% of national forest acreage is located in 15 states. As discussed, the NFS contains 144.9 million acres of forest and woodland, of which 66% are considered timberland. Most of the lands contained in the modern Forest Service were reserved from the public lands in the late 19 th and early 20 th centuries, in what were first called "forest reserves". The forest reserves were initially managed by the DOI and later moved to the USDA and the Forest Service. Through the Organic Administration Act, Congress specified that the purpose of these forests was to "improve and protect the forest within the reservation … and to furnish a continuous supply of timber for the use and necessities of the citizens of the United States," in addition to protecting water flows. The act authorized timber sales of "dead, matured or large growth of trees" and set out procedures for conducting them. Congress expanded the purposes for the national forests, and developed management goals to achieve those purposes, through the Multiple Use-Sustained Yield Act of 1960 (MUSYA). Congress added the provision of fish and wildlife habitat, recreation, energy and mineral development, and livestock grazing as official purposes of the national forests, in addition to timber harvesting and watershed protection. To supply these activities, management of the forests' resources is to be organized for multiple uses in a "harmonious and coordinated" manner that considers the combination of uses that best meets the needs of the American people, not that necessarily yields the largest dollar return or output. The act also directs a sustained yield of products and services, meaning high-level regular output in perpetuity without impairing the lands' productivity. Congress has directed FS to engage in long-term land use and resource management. Plans set the framework for land management, uses, and protection. They are developed through an interdisciplinary process with opportunities for public participation. FS uses these plans to guide implementation of site-specific activities. In the case of timber, plans describe where timber harvesting may occur and include measures of sustainable timber harvest levels, and are used to guide implementation of individual sales. These sales generate revenues. Congress has specified various uses for these revenues. Congress directed the Forest Service to conduct long-term planning and management through the passage of the National Forest Management Act of 1976 (NFMA). NFMA requires the FS to prepare a land and resource management plan—often called a "forest plan"—for each NFS unit. These plans are to be revised at least every 15 years. The FS has issued regulations to implement the planning requirement—often called "planning rules"—and to establish the procedures for developing, amending, and revising forest plans. The first planning rule was issued in 1979 and later revised; the current rule dates from 2012. Forest planning and implementation generally proceed as described below. Forest Service timber planning and administration proceed under general FS planning procedures. Forest plans guide management of the plan area by specifying objectives, standards, and guidelines for resources and activities. They contain certain components required by statute, such as components addressing provision of outdoor recreation, range, wildlife, fish, and timber. Among the most general required components addressing timber are requirements to identify areas and quantities for timber harvesting. The FS must identify lands that may be not suited for timber production . All other lands in the NFS unit are considered suitable for timber production. The plan must contain the allowable sale quantity, the measure of timber that can be removed annually without impairing future yield, although FS also considers other measures of sustainable yield in planning over various time horizons. The allowable sale quantity informs the amount of timber that can be removed annually over a ten-year plan period. Plans are required to be developed with public participation and in accordance with various other administrative and environmental statutes, such as the National Environmental Policy Act (NEPA). Forest plans may consider harvesting for various purposes—for example, to produce timber or to achieve and maintain desired resource conditions, such as habitat improvement, fire risk reduction, and sanitation. If the forest plan identifies lands as suitable for timber production, the plan must address timber harvesting on those lands. If the forest plan considers timber harvesting for purposes other than producing timber, it must delineate areas where such activities may occur. These areas may be identified by forest type, geographic area, or other criteria. FS conducts timber sales to achieve the objectives in the forest plan. FS establishes a sale schedule and timber sale project plan, which may include more than one timber sale. The plan estimates volume offered, acreage, and harvest methods for the relevant sales. Site-specific timber harvests must also comport with NEPA and relevant statutes, including any requirement for site-specific environmental analysis and review. Prior to an individual sale, FS marks and appraises the timber to be offered. FS may designate timber in one of three ways: physical marking, a written description of specific trees for harvest (called description ) , or a written description of desired post-harvest stand characteristics (called prescription ). FS creates a sale package, including a prospectus, sample contract, and other required documentation; some requirements are site-specific. FS advertises the package at an appraised starting price. Interested parties may bid on the package. A contract is awarded to the highest bidder provided legal conditions are met. The winning bidder conducts the timber harvest according to the terms—such as timeline, harvest method, and road construction conditions—specified in the contract. Timber harvests must generally be completed in 3 years, with a maximum term of 10 years. Timber sales generate revenue, and disposition of this revenue depends on several factors. Congress has established several funds for FS to retain and use timber sale receipts. Depending on the type of sale, among other factors, FS may be required to make certain deposits to these funds. If any portion of receipts are not required to be deposited, FS may distribute receipts among funds at their discretion, including depositing all revenue in a single fund. The money in these funds may be used by the FS for a variety of purposes, sometimes without further appropriation (i.e., as mandatory appropriations). See Table A-1 for a list of these funds. A more detailed discussion of revenue levels, expenditures, and issues related to FS timber revenue funds is outside the scope of this report. Timber harvesting is one of many authorized uses of the NFS. The amount of timber harvested from the NFS, and its relative proportion of total U.S. timber supply, has fluctuated over time. This section provides an overview of timber volume harvested from the NFS, and value of those harvests, along with some economic and historical factors which may have contributed to observed changes. The volume of timber harvested from the national forests (and their precursors, the forest reserves) increased slowly from 1898 until the 1940s. Most demand for wood was met by private timberlands; by 1940, for example, FS lands supplied 2% of U.S. timber supply. In the post-World War II era, timber harvest volume from the NFS grew (see Figure 2 ). The timber supply from private forestry was unable to keep pace with the increased demand, due in part to high harvest levels during WWII. In the 1950s, the FS began to raise harvest limits. Harvests rose from 1-3 billion board feet (abbreviated BBF) annually in the early 1940s to more than 10 BBF in some years of the 1960s and 1970s. According to historical data from one source, harvest from the NFS rose from 9% of total U.S. harvest in 1952 to 16% in 1962 and 1970, and 15% in 1976. Harvest volume declined from the mid-1970s to the early 1980s. Harvest on FS lands shifted to more marginal timberlands; in part, clear-cutting in the previous decades had reduced tree volume available for harvest in productive areas. This period also coincided with recessions in 1980 and 1982, which may have reduced demand. Timber harvests rose from the early 1980s to the early 1990s, sometimes reaching levels of over 12 BBF per year. These timber harvests coincided with the 1986 U.S. peak in per capita consumption of wood products, driven in part by an increase in housing starts following the 1982 recession. In 1986, timber harvests from the NFS were 13% of total U.S. timber harvests. In the early 1990s, harvested timber volume began a sustained decrease. In 1991, the NFS supplied 11% of total U.S. harvested timber, and in 1997, the NFS supplied 5% of total U.S. harvested timber. In 2011, NFS supplied 2% of U.S. wood and paper products. Numerous interrelated factors, including statutory, administrative, biological, and market influences, may have contributed to this decline. The effect of each individual factor is not settled, as is the effect of each factor over time. These factors occurred at varying points in time and may not coincide directly with observed harvest level changes. Some sources have noted that statutory changes added complexity to forest management and increasing litigation frequency, while also increasing transparency and public participation. Other sources have noted changing management priorities. Others have noted decreasing domestic demand, volatile prices, and the prevalence of less valuable timber due to high harvest levels in previous decades. The listing of the northern spotted owl ( Strix occidentalis caurina) under the Endangered Species Act in 1990 is often discussed in regard to declining timber harvest levels. Harvested volumes have consistently been between 2 BBF and 3 BBF annually from FY2004 onward. In FY2018, approximately 2.8 BBF were harvested from FS lands. Although the national timber market in the United States was affected by the 2008 housing market collapse and the subsequent decline in demand, timber volumes harvested from FS experienced relatively little change in volume, for unclear reasons. In FY2018 dollars, harvest values from approximately FY2000 onward are similar to harvest values in the early 1940s. Harvest values generally increased from the early 1940s to a peak of approximately $3.4 billion (FY2018 dollars) in FY1979, before a decline through FY1982. They rose again thereafter, reaching another peak of approximately $2.6 billion (FY2018 dollars) in FY1989, before again declining. Values from FY2001 onward have generally been between approximately $100 million and $300 million in FY2018 dollars. In FY2018, cut value was approximately $188.8 million. FS harvest value declined during the recession and housing collapse of 2008. Harvest value may vary due to quality, species, and age class of offered timber and timber market conditions, and is correlated with volume harvested. FS harvest volume differs by region; these differences mirror the major production regions in private forestry (see Figure 3 ). FS Region 6 (the Pacific Northwest), Region 8 (the Southeast), and Region 9 (the North), are the three largest producing regions in both private and public forestry. In general, harvest volume and value by region is a function of many complex factors, including the dominant timber type, age class, and condition; the suitability of FS sites for harvest operations; the legal limitations on land uses; and the status of the local forest products industry. The Bureau of Land Management (BLM) administers about 246 million surface acres of federal lands, almost entirely located in twelve western states. As noted, about 37.6 million acres of BLM lands are forest; of that, 16% is considered timberland. The Oregon and California (O&C) lands, which comprise approximately 2.6 million acres, contain 2.4 million acres of forest (see " Statutory Authorities for Harvesting Timber ," below, for a description of the O&C lands). The transfer of the forest reserves to FS administration in the early 1900s reduced the amount of forest land and timberland under BLM management today. The modern BLM was formed in 1946 to manage the public domain lands. At its formation, BLM had no general authority to harvest timber on those lands. Congress authorized BLM to dispose of forest materials through the Materials Act of 1947. Congress later elaborated BLM's management responsibilities with the passage of the Federal Land Policy and Management Act of 1976 (FLPMA). Like the MUSYA's mandate for the FS, FLPMA requires BLM to manage the public lands for multiple use and sustained yield in a "harmonious and coordinated" manner that considers the combination of uses that best meets the needs of the American people, not necessarily yields the largest dollar return or output. The act directs a sustained yield of renewable resources, meaning high-level regular output in perpetuity without impairing the lands' productivity. The O&C lands are lands in western Oregon managed according to their own establishing statutes, mostly by BLM. FS manages 492 thousand acres of the O&C lands, or 18% of this total area. The lands consist of several areas, the Oregon and California lands and the Coos Bay Wagon Road (CBWR) lands, which were revested to the federal government following violation of grant terms. They are usually referred to collectively as "O&C lands" and often grouped for legislative purposes. BLM or FS's mandate to sell timber on the O&C lands derives directly from the O&C lands' establishing statute. The O&C Act directs that O&C lands be managed for sustained yield of permanent forest production, watershed protection, recreation, and contributing to the economic stability of local communities and industries. Congress has directed BLM to engage in long-term land use and resource management planning . Plans set the framework for land management, uses, and protection. They are developed through an interdisciplinary process with opportunit ies for public participation. BLM uses these plans to guide implementation of site-specific activities. In the case of timber, plans describe where timber harvesting may occur and include measures of sustainable timber harvest levels . They are used to guide execution of individual sales , which generate revenues. Congress has specified various uses for these revenues. BLM timber planning and administration follow general BLM land use planning procedures. Through FLPMA, Congress directs BLM to develop, maintain, and revise plans for managing public lands. BLM issued the first regulations to implement the planning requirement in 1979, and subsequently revised them; the current BLM planning rule dates from 2005. Plans must be developed with public participation and in accordance with various other administrative and environmental statutes (e.g., NEPA). Under BLM's planning rule, resource management plans remain in effect indefinitely. They are to include monitoring and evaluation standards, and are to be amended or revised when circumstances warrant. The planning rule directs BLM to identify indicators that describe the desired forest outcomes in the plan area. BLM is to identify a suite of management actions to achieve those outcomes, including identifying sustained yield areas, areas that could support long-term timber harvest. BLM personnel determine a harvest level for these areas that can be maintained without permanent impairment; this harvest level is known as the allowable sale quantity . Allowable sale quantity is measured for a ten-year period. In addition, BLM generally makes annual forest product sale plans. These plans contain estimates of sale volume, acreage, and permitted harvest methods for any sales proposed for the year. Site-specific timber harvests must comport with NEPA and relevant statutes, including any additional requirement for site-specific analysis and review. To conduct an individual sale within the plan, BLM designates the timber for sale and appraises the value of the timber. BLM timber may be designated by physical marking or by enclosing timber in a sale boundary. BLM prepares a sale contract, along with a prospectus describing the sale. The sale is advertised at an appraised starting price. Interested parties may bid on the contract. A contract is awarded to the highest bidder provided legal conditions are met. The winning bidder conducts the timber harvest according to the terms specified in the contract, such as timeline and harvest method. Timber harvests must generally be completed in three years, but may be extended under certain circumstances. Timber sales generate revenues, and disposition of these revenues depends on a number of factors. Congress has established several funds for timber sale revenues. Depending on the type of sale and the originating lands, BLM may be required to make certain deposits to these funds. If any portion of revenues are not required to be deposited, BLM may allocate those revenues among funds at its discretion, including depositing all revenues in a single account. Some funds are permanently appropriated to BLM and may be used without further congressional action (i.e. as mandatory appropriations). See Table A-2 for a list of these funds. A more detailed discussion of funding levels, expenditures, and issues related to BLM timber revenue funds is outside the scope of this report. Timber harvesting is one of many authorized uses of BLM lands. Long-term historical data regarding BLM timber harvesting is unavailable. Other data on past timber program activity show that BLM timber harvesting may have changed over time. This section provides data on timber offered for sale, timber sold, and timber harvested from BLM lands at various points in time, along with some economic and historical factors which may have contributed to observed changes. Data on cut timber volume from BLM lands is available from FY1994 onward (see Figure 4 ). While complete historical cut data is unavailable prior to FY1994, some data exists about past sales (see Table 1 ). The intermittent nature of this data challenges drawing conclusions about larger trends in these periods, especially in the missing decades. In addition, these data refer to either timber sold or timber offered for sale, which differs from volume of timber cut. However, as an approximate comparison, the data show that the volumes sold prior to FY1990 are large compared to recent volumes offered for sale. Observers confirmed a decline in public domain timber offered for sale beginning in 1991, though the investigation did not consider the O&C lands. Volumes harvested from BLM lands were between 100 and 260 MMBF from FY1995 to FY2000 and from FY2004 to FY2018 (see Figure 4 ). Harvests were lower in FY1994 and between FY2001 and FY2003. Harvested volumes have shown a generally increasing trend since FY2001, with the largest recently recorded harvest in FY2015 (about 258 MMBF). Like the NFS, harvests from BLM lands during the recession and housing market collapse of 2008 experienced relatively little change in volume, for unclear reasons. In FY2018, BLM harvested about 178 MMBF. Data on cut timber value from BLM lands is available from FY1996 onward (see Figure 4 ). Total value of harvests has declined since FY1996. Harvest values have generally increased since the low value of approximately $15.4 million in FY2001, and have been between $20 million and $50 million since FY2011 (FY2018 dollars). In FY2018, cut value was $41.3 million. Like the FS, BLM harvest value during the recession and housing market collapse of 2008 declined, but the relative change was small compared to the decreases of the late 1990s. Harvest value may vary due to the quality, species, and age class of offered timber as well as timber market conditions, and is correlated with harvested volume. BLM harvest values per unit of timber are higher than FS values per unit, due to the dominant timber type harvested from BLM lands, among other factors. Most timber harvests on BLM lands are conducted on the O&C lands. From FY2014 to FY2018, the average harvested volume from O&C lands was 93% of the average total volume. The large proportion of volume harvested from O&C lands reflects the forest cover and type, dominant use for forest production, and the size of the forest industry in the Pacific Northwest. As with the NFS, in general, BLM harvest volume and value is a function of many complex factors, including the dominant timber type, age class, and condition; the suitability of sites for harvest operations; legal limitations on land uses; and the status of the local forest products industry. Management of federal lands for multiple uses and sustained yield is challenging, including balancing timber harvesting with other uses. Timber production from federal lands is driven by a complex interaction of environmental factors, market forces, and land management policies. Under current law, efforts to change harvest levels must comport with the provision of a sustained yield of multiple uses. Congress has sometimes considered legislation to prioritize or exclude some uses in a limited manner—in certain geographic regions, for example—but has not changed these fundamental management concepts since their enactment in the 1960s and 1970s. The public often expresses preferences for uses of federal forests, including with respect to timber harvesting. Some may support timber harvesting generally, and believe the current levels of production are sufficient. Others may wish to see the levels of production increased or decreased, depending on their perspective. Those who support timber harvesting on federal lands may cite benefits to the local timber industry, a belief that harvesting is part of the core mission of federal forests, or a belief that timber harvesting is a tool for improving forest health conditions, among other reasons. Proponents of timber harvesting on federal lands may also emphasize the role of timber harvesting in some forest-adjacent rural economies. Others may oppose timber harvesting due to concerns about ecological or human impacts: for example, they may cite beliefs that timber sales have detrimental impacts on environmental quality, fish and wildlife habitat, forest character, recreation and tourism, or cultural and aesthetic values. Opponents may also contend that conducting timber sales favors the timber industry over other interests. In addition to the themes identified above, Congress may also debate other issues related to federal timber harvests that are not discussed in detail in this report. For example, these include issues related to the disposition and use of timber sale revenues; the relationship between timber harvest planning and statutes such as NEPA and the Endangered Species Act (ESA); and special harvest authorities, among others. The following tables list and describe the funds that receive timber sale revenues; the funds' statutory authority is also shown. A detailed discussion of funding levels, expenditures, and issues related to these funds is outside the scope of this report.
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Congress has granted some federal land management agencies the authority to sell timber from federal lands. Two agencies, the Forest Service (FS) and the Bureau of Land Management (BLM), conduct timber sales as an authorized use. Together, the FS and the BLM manage 76% of federal forest area. FS manages 144.9 million acres, while BLM manages 37.6 million acres. The other major federal land management agencies, the National Park Service (NPS) and the Fish and Wildlife Service (FWS), rarely conduct timber sales. Lands managed by the FS, the National Forest System (NFS), are managed under a multiple use-sustained yield model pursuant to the Multiple Use-Sustained Yield Act of 1960 (MUSYA). This statute directs FS to balance multiple uses of their lands and ensure a sustained yield of those uses in perpetuity. Congress, through the National Forest Management Act (NFMA), has directed FS to engage in long-term land use and resource management planning. Plans set the framework for land management, uses, and protection; they are developed through an interdisciplinary process with opportunities for public participation. In the case of timber, they describe where timber harvesting may occur and include measures of sustainable timber harvest levels. FS uses these plans to guide implementation of individual sales, which generate revenue. Congress has specified various uses for this revenue. Timber harvest on FS lands has varied over time. FS harvest volumes in the 1940s were around 1-3 billion board feet per year. Annual harvest volumes rose from the 1950s through the 1980s, sometimes exceeding 10 billion board feet. Annual harvested volumes decreased in the early 1990s and have remained between 1.8 and 2.8 billion board feet since FY2003. The total dollar value of FS timber harvests generally rose from the early 1940s to over $3 billion in FY1979. Total value has been between $100 million and $300 million since FY2001. From FY2014 to FY2018, the greatest average annual harvest volume on FS lands was from Oregon and Washington. BLM lands are managed under a multiple use-sustained yield model pursuant to the Federal Land Policy and Management Act of 1976 (FLPMA). This statute directs BLM to balance multiple uses of their lands and ensure a sustained yield of those uses in perpetuity. Congress has directed BLM to engage in long-term land use and resource management planning through FLPMA. Plans set the framework for land management, uses, and protection; they are developed made through an interdisciplinary process with opportunities for public participation. In the case of timber, they describe where timber harvesting may occur and contain measures of sustainable timber harvest levels. The FS and the BLM use these plans to guide implementation of individual sales, which generate revenue. Congress has specified various uses for this revenue. Although trends in timber activities on BLM lands are challenging to infer from the available data, volumes sold in the past appear to be larger than recent volumes offered for sale. Harvested volumes for the BLM have been between 100 and 260 million board feet annually from FY1995 onward, except in FY1994 and between FY2001-FY2003. Total harvest values have declined since the mid-1990s, and have generally been between $20 million and $50 million annually since FY2011. From FY2014 to FY2018, the greatest average annual harvest volume from BLM lands was from Oregon and Washington. Congress has debated the appropriate balance of timber harvesting and other uses on federal lands. Determining the proportions of these uses, in whole and on individual lands, is challenging for land management agencies. Preferences for certain balances of these uses often stem from values about federal forests' purposes, such as consideration of economic, environmental, or recreational values. Debate has also centered on the relationship of timber harvesting levels to forest health, including whether changing harvest levels is a desirable forest management tool. Congress has granted some federal land management agencies the authority to sell timber from federal lands. Two agencies, the Forest Service (FS) and the Bureau of Land Management (BLM), conduct timber sales as an authorized use. Together, the FS and the BLM manage 76% of federal forest area. FS manages 144.9 million acres, while BLM manages 37.6 million acres. The other major federal land management agencies, the National Park Service (NPS) and the Fish and Wildlife Service (FWS), rarely conduct timber sales. Lands managed by the FS, the National Forest System (NFS), are managed under a multiple use-sustained yield model pursuant to the Multiple Use-Sustained Yield Act of 1960 (MUSYA). This statute directs FS to balance multiple uses of their lands and ensure a sustained yield of those uses in perpetuity. Congress, through the National Forest Management Act (NFMA), has directed FS to engage in long-term land use and resource management planning. Plans set the framework for land management, uses, and protection; they are developed through an interdisciplinary process with opportunities for public participation. In the case of timber, they describe where timber harvesting may occur and include measures of sustainable timber harvest levels. FS uses these plans to guide implementation of individual sales, which generate revenue. Congress has specified various uses for this revenue. Timber harvest on FS lands has varied over time. FS harvest volumes in the 1940s were around 1-3 billion board feet per year. Annual harvest volumes rose from the 1950s through the 1980s, sometimes exceeding 10 billion board feet. Annual harvested volumes decreased in the early 1990s and have remained between 1.8 and 2.8 billion board feet since FY2003. The total dollar value of FS timber harvests generally rose from the early 1940s to over $3 billion in FY1979. Total value has been between $100 million and $300 million since FY2001. From FY2014 to FY2018, the greatest average annual harvest volume on FS lands was from Oregon and Washington. BLM lands are managed under a multiple use-sustained yield model pursuant to the Federal Land Policy and Management Act of 1976 (FLPMA). This statute directs BLM to balance multiple uses of their lands and ensure a sustained yield of those uses in perpetuity. Congress has directed BLM to engage in long-term land use and resource management planning through FLPMA. Plans set the framework for land management, uses, and protection; they are developed made through an interdisciplinary process with opportunities for public participation. In the case of timber, they describe where timber harvesting may occur and contain measures of sustainable timber harvest levels. The FS and the BLM use these plans to guide implementation of individual sales, which generate revenue. Congress has specified various uses for this revenue. Although trends in timber activities on BLM lands are challenging to infer from the available data, volumes sold in the past appear to be larger than recent volumes offered for sale. Harvested volumes for the BLM have been between 100 and 260 million board feet annually from FY1995 onward, except in FY1994 and between FY2001-FY2003. Total harvest values have declined since the mid-1990s, and have generally been between $20 million and $50 million annually since FY2011. From FY2014 to FY2018, the greatest average annual harvest volume from BLM lands was from Oregon and Washington. Congress has debated the appropriate balance of timber harvesting and other uses on federal lands. Determining the proportions of these uses, in whole and on individual lands, is challenging for land management agencies. Preferences for certain balances of these uses often stem from values about federal forests' purposes, such as consideration of economic, environmental, or recreational values. Debate has also centered on the relationship of timber harvesting levels to forest health, including whether changing harvest levels is a desirable forest management tool.
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Some time ago, a federal prosecutor referred to the mail and wire fraud statutes as "our Stradivarius, our Colt 45, our Louisville Slugger … and our true love." Not everyone shared the prosecutor's delight. Commentators have argued that the statutes "have long provided prosecutors with a means by which to salvage a modest, but dubious, victory from investigations that essentially proved unfruitful." Federal judges have also expressed concern from time to time, observing that the "mail and wire fraud statutes have 'been invoked to impose criminal penalties upon a staggeringly broad swath of behavior,' creating uncertainty in business negotiations and challenges to due process and federalism." Nevertheless, mail and wire fraud prosecutions have brought to an end schemes that bilked victims of millions, and sometimes billions, of dollars. The federal mail and wire fraud statutes outlaw schemes to defraud that involve the use of mail or wire communications. Both condemn fraudulent conduct that may also come within the reach of other federal criminal statutes. Both may serve as racketeering and money laundering predicate offenses. Both are punishable by imprisonment for not more than 20 years; for not more than 30 years, if the victim is a financial institution or the offense is committed in the context of major disaster or emergency. Both entitle victims to restitution. Both may result in the forfeiture of property. The first of the two, the mail fraud statute, emerged in the late 19 th century as a means of preventing "city slickers" from using the mail to cheat guileless "country folks." But for penalty increases and amendments calculated to confirm its breadth, the prohibition has come down to us essentially unchanged. Speaking in 1987, the Supreme Court noted that "the last substantive amendment to the statute ... was the codification of the holding of Durland ... in 1909." Congress did amend it thereafter to confirm that the mail fraud statute and the wire fraud statute reached schemes to defraud another of the right to honest services and to encompass the use of commercial postal carriers. The wire fraud statute is of more recent vintage. Enacted as part of the Communications Act Amendments of 1952, it was always intended to mirror the provisions of the mail fraud statute. Since its inception, changes in the mail fraud statute have come with corresponding changes in the wire fraud statute in most instances. The mail and wire fraud statutes are essentially the same, except for the medium associated with the offense—the mail in the case of mail fraud and wire communication in the case of wire fraud. As a consequence, the interpretation of one is ordinarily considered to apply to the other. In construction of the terms within the two, the courts will frequently abbreviate or adjust their statement of the elements of a violation to focus on the questions at issue before them. As treatment of the individual elements makes clear, however, there seems little dispute that conviction requires the government to prove the use of either mail or wire communications in the foreseeable furtherance of a scheme and intent to defraud another of either property or honest services involving a material deception. The wire fraud statute applies to anyone who "transmits or causes to be transmitted by wire, radio, or television communication in interstate or foreign commerce any writings ... for the purpose of executing [a] ... scheme or artifice." The mail fraud statute is similarly worded and applies to anyone who "... for the purpose of executing [a] ... scheme or artifice ... places in any post office ... or causes to be delivered by mail ... any ... matter." The statutes require that a mailing or wire communication be in furtherance of a scheme to defraud. The mailing or communication need not be an essential element of the scheme, as long as it "is incident to an essential element of the scheme." A qualifying mailing or communication, standing alone, may be routine, innocent or even self-defeating, because "[t]he relevant question at all times is whether the mailing is part of the execution of the scheme as conceived by the perpetrator at the time, regardless of whether the mailing later, through hindsight, may prove to have been counterproductive." The element may be satisfied by mailings or communications "designed to lull the victim into a false sense of security, postpone inquiries or complaints, or make the transaction less suspect." The element may also be satisfied by mailings or wire communications used to obtain the property which is the object of the fraud. A defendant need not personally have mailed or wired a communication; it is enough that he "caused" a mailing or transmission of a wire communication in the sense that the mailing or transmission was the reasonable foreseeable consequence of his intended scheme. The mail and wire fraud statutes "both prohibit, in pertinent part, 'any scheme or artifice to defraud[,]' or to obtain money or property 'by means of false or fraudulent pretenses, representations, or promises," or deprive another of the right to honest services by such means. From the beginning, Congress intended to reach a wide range of schemes to defraud, and has expanded the concept whenever doubts arose. It added the second prong—obtaining money or property by false pretenses, representations, or promises—after defendants had suggested that the term "scheme to defraud" covered false pretenses concerning present conditions but not representations or promises of future conditions. More recently, it added 18 U.S.C. § 1346 to make it clear the term "scheme to defraud" encompassed schemes to defraud another of the right to honest services. Even before that adornment, the words were understood to "refer 'to wronging one in his property rights by dishonest methods or schemes,' and 'usually signify the deprivation of something of value by trick, deceit, chicane or overreaching.'" As a general rule, the crime is done when the scheme is hatched and an attendant mailing or interstate phone call or email has occurred. Thus, the statutes are said to condemn a scheme to defraud regardless of its success. It is not uncommon for the courts to declare that to demonstrate a scheme to defraud the government needs to show that the defendant's "communications were reasonably calculated to deceive persons of ordinary prudence and comprehension." Even a casual reading, however, might suggest that the statutes also cover a scheme specifically designed to deceive a naïve victim. Nevertheless, the courts have long acknowledged the possibility of a "puffing" defense, and there may be some question whether the statutes reach those schemes designed to deceive the gullible though they could not ensnare the reasonably prudent. In any event, the question may be more clearly presented in the context of the defendant's intent and the materiality of the deception. The mail and wire fraud statutes speak of schemes to defraud or to obtain money or property by means of false or fraudulent pretenses. The Supreme Court has said that the phrase "to defraud" and the phrase "to obtain money or property" do not represent separate crimes, but instead the phrase "obtain money or property" describes what constitutes a scheme to defraud. In later look-alike offenses, Congress specifically numerated the two phrases. The bank fraud statute, for example, applies to "whoever knowingly executes … a scheme or artifice — (1) to defraud a financial institution; or (2) to obtain any of the money, funds, credits, assets, securities, or other property owned by … a financial institution, by means of false or fraudulent pretenses …" It left the mail and wire fraud statutes, however, unchanged. The mail and wire fraud statutes clearly protect against deprivations of tangible property. They also protect certain intangible property rights, but only those that have value in the hands of the victim of a scheme. "To determine whether a particular interest is property for purposes of the fraud statutes, [courts] look to whether the law traditionally has recognized and enforced it as a property right." Neither the mail nor the wire fraud statute exhibits an explicit reference to materiality. Yet materiality is an element of each offense, because at the time of the statutes' enactment, the word "defraud" was understood to "require[] a misrepresentation or concealment of [a] material fact." Thus, other than in an honest services context, a "scheme to defraud" for mail or wire fraud purposes must involve a material misrepresentation of some kind. "A misrepresentation is material if it is capable of influencing the intended victim." Again, other than in the case of honest services, "'intent to defraud' requires an intent to (1) deceive, and (2) cause some harm to result from the deceit. A defendant acts with the intent to deceive when he acts knowingly with the specific intent to deceive for the purpose of causing pecuniary loss to another or bringing about some financial gain to himself." A defendant has a complete defense if he believes the deceptive statements or promises to be true or otherwise acts under circumstances that belie an intent to defraud. Yet, a defendant has no defense if he blinds himself to the truth. Nor is it a defense if he intends to deceive but feels his victim will ultimately profit or be unharmed. The Supreme Court held in McNally v. United States that the protection of the mail fraud statute, and by implication the protection of the wire fraud statute, did not extend to "the intangible right of the citizenry to good government." Soon after McNally , Congress enlarged the mail and wire fraud protection to include the intangible right to honest services, by defining the "term 'scheme or artifice to defraud' [to] include[s] a scheme or artifice to deprive another of the intangible right to honest services." Lest the expanded definition be found unconstitutionally vague, the Court in Skilling v. United States limited its application to cases of bribery or kickbacks. The Court in Skilling supplied only a general description of the bribery and kickbacks condemned in the honest-services statute. Subsequent lower federal courts have often looked to the general federal law relating to bribery and kickbacks for the substantive elements of honest services bribery. In this context, bribery requires "a quid pro quo—a specific intent to give … something of value in exchange for an official act." And an "official act" means no more than an officer's formal exercise of governmental power in the form of a "decision or action on a 'question, matter, cause, suit, proceeding or controversy'" before him. The definition of the word "kickback" quoted by the Court in Skilling has since been reassigned, and the courts have cited the dictionary definition on occasion. Except for the elements of a scheme to defraud in the form of a bribe and a kickback, honest services fraud, as an adjunct of the mail and wire fraud statutes, draws its elements and the sanctions that attend the offense from the mail and wire fraud statutes. Attempting or conspiring to commit mail or wire fraud or aiding and abetting the commission of those offenses carries the same penalties as the underlying offense. "In order to aid and abet another to commit a crime it is necessary that a defendant in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his action to make it succeed." "Conspiracy to commit wire fraud under 18 U.S.C. § 1349 requires a jury to find that (1) two or more persons agreed to commit wire fraud and (2) the defendant willfully joined the conspiracy with the intent to further its unlawful purpose." As a general rule, a conspirator is liable for any other offenses that a co-conspirator commits in the foreseeable furtherance of the conspiracy. Such liability, however, extends only until the objectives of the conspiracy have been accomplished or the defendant has withdrawn from the conspiracy. Where attempt has been made a separate offense, as it has for mail and wire fraud, conviction ordinarily requires that the defendant commit a substantial step toward the completion of the underlying offense with the intent to commit it. It does not, however, require the attempt to have been successful. Unlike conspiracy, a defendant may not be convicted of both the substantive offense and the lesser included crime of attempt to commit it. A mail and wire fraud are punishable by imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for organizations), or fine of not more than $1 million and imprisonment for not more than 30 years if the victim is a financial institution or the offense was committed in relation to a natural disaster. It is also subject to a mandatory minimum two-year term of imprisonment if identify theft is used during and in furtherance of the fraud. Conviction may also result in probation, a term of supervised release, a special assessment, a restitution order, and/or a forfeiture order. Sentencing in federal court begins with the federal Sentencing Guidelines. The Guidelines are essentially a scorekeeping system. A defendant's ultimate sentence under the Guidelines is determined by reference first to a basic guideline, which sets a base "offense level." Offense levels are then added or subtracted to reflect his prior criminal record as well as the aggravating and mitigating circumstances attending his offense. One of two basic guidelines applies to mail and wire fraud. Section 2C1.1 applies to mail or wire fraud convictions involving corruption of public officials. Section 2B1.1 applies to other mail or wire fraud convictions. Both sections include enhancements based on the amount of loss associated with the fraud. After all the calculations, the final offense level determines the Guidelines' recommendations concerning probation, imprisonment, and fines. The Guidelines convert final offense levels into 43 sentencing groups, which are in turn each divided into six sentencing ranges based on the defendant's criminal history. Thus, for instance, the recommended sentencing range for a first-time offender (i.e., one with a category I criminal history) with a final offense level of 15 is imprisonment for between 18 and 24 months. A defendant with the same offense level 15 but with a criminal record placing him in criminal history category VI, would face imprisonment from between 41 and 51 months. The Guidelines also provide offense-level-determined fine ranges for individuals and organizations. As a general rule, sentencing courts may place a defendant on probation for a term of from 1 to 5 years for any crime punishable by a maximum term of imprisonment of less than 25 years. The Guidelines, however, recommend "pure" probation, that is, probation without any term of incarceration, only with respect to defendants with an offense level of 8 or below, i.e., levels where the sentencing range is between zero and six months. Once a court has calculated the Guidelines' recommendations, it must weigh the other statutory factors found in 18 U.S.C. § 3553(a) before imposing a sentence. Appellate courts will uphold a sentence if the sentence is procedurally and substantively reasonable. A sentence is reasonable procedurally if it is free of procedural defects, such as a failure to accurately calculate the Guidelines' recommendations and to fully explain the reasons for the sentence selected. A sentence is reasonable substantively if it is reasonable in light of circumstances that a case presents. Supervised release is a form of parole-like supervision imposed after a term of imprisonment has been served. Although imposition of a term of supervised release is discretionary in mail and wire fraud cases, the Sentencing Guidelines recommend its imposition in all felony cases. The maximum supervised release term for wire and mail fraud generally is three years—five years when the defendant is convicted of the mail or wire fraud against a financial institution that carries a 30-year maximum term of imprisonment. Release will be subject to a number of conditions, violation of which may result in a return to prison for not more than two years (not more than three years if the original crime of conviction carried a 30-year maximum). There are three mandatory conditions: (1) commit no new crimes; (2) allow a DNA sample to be taken; and (3) submit to periodic drug testing. The court may suspend the drug testing condition, although it is under no obligation to do so even though the defendant has no history of drug abuse and drug abuse played no role in the offense. Most courts will impose a standard series of conditions in addition to the mandatory condition of supervised release. The Sentencing Guidelines recommend that these include the payment of any fines, restitution, and special assessments that remain unsatisfied. Defendants convicted of mail or wire fraud must pay a special assessment of $100. Restitution is ordinarily required of those convicted of mail or wire fraud. The victims entitled to restitution include those directly and proximately harmed by the defendant's crime of conviction, and "in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity," like mail and wire fraud, "any person directly harmed by the defendant's conduct in the course of the scheme, conspiracy, or pattern." Property that constitutes the proceeds of mail or wire fraud is subject to confiscation by the United States. It may be confiscated pursuant to either civil forfeiture or criminal forfeiture procedures. Civil forfeiture proceedings are conducted that treat the forfeitable property as the defendant. Criminal forfeiture proceedings are conducted as part of the criminal prosecution of the property owner. The mail and wire fraud statutes essentially outlaw dishonesty. Due to their breadth, misconduct that constitutes mail or wire fraud may constitute a violation of one or more other federal criminal statutes as well. This overlap occurs perhaps most often with respect to (1) crimes for which mail or wire fraud are elements ("predicate offenses") of another offense; (2) fraud proscribed under jurisdictional circumstances other than mail or wire use; and (3) honest services fraud in the form of bribery or kickbacks. Some federal crimes have as an element the commission of some other federal offense. The money laundering statute, for example, outlaws laundering the proceeds of various predicate offenses. The racketeering statute outlaws the patterned commission of a series of predicate offenses in order to operate a racketeering enterprise. Mail and wire fraud are racketeering and money laundering predicate offenses. The Racketeering Influenced and Corrupt Organization (RICO) provisions outlaw acquiring or conducting the affairs of an enterprise, engaged in or whose activities affect interstate commerce, through loan sharking or the patterned commission of various other predicate offenses. The racketeering-conduct and conspiracy-to-engage-in-racketeering-conduct appear to be the RICO offenses most often built on wire or mail fraud violations. The elements of the RICO conduct offense are (1) conducting the affairs; (2) of an enterprise; (3) engaged in activities in or that impact interstate or foreign commerce; (4) through a pattern; (5) of racketeering activity. To prove a RICO conspiracy, the government must prove: "(1) that two or more persons agreed to conduct or to participate, directly or indirectly, in the conduct of an enterprise's affairs through a pattern of racketeering activity; (2) that the defendant was a party to or a member of that agreement; and (3) that the defendant joined the agreement or conspiracy knowing of its objective to conduct or participate, directly or indirectly, in the conduct of the enterprise's affairs through a pattern of racketeering activity." "Racketeering activity" means, among other things, any act that is indictable under either the mail or wire fraud statutes. As for pattern, a RICO pattern "requires at least two acts of racketeering activity. The racketeering predicates may establish a pattern if they [were] related and … amounted to, or threatened the likelihood of, continued criminal activity.'" The pattern of predicate offenses must be used by someone employed by or associated with a qualified enterprise to conduct or participate in its activities. "Congress did not intend to extend RICO liability . . . beyond those who participated in the operation and management of an enterprise through a pattern of racketeering activity." Nevertheless, "liability under § 1962(c) is not limited to upper management … An enterprise is operated not just by upper management but also by lower rung participants." The enterprise may be either any group of individuals, any legal entity, or any group "associated in fact." "Nevertheless, 'an association-in-fact enterprise must have at least three structural features: a purpose, relationships among those associated with the enterprise and longevity sufficient to permit those associates to pursue the enterprise's purpose.'" Moreover, qualified enterprises are only those that "engaged in, or the activities of which affect, interstate or foreign commerce." RICO violations are punishable by imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for organizations). The crime is one for which restitution must be ordered when one of the predicate offenses is mail or wire fraud. RICO has one of the first contemporary forfeiture provisions, covering property and interests acquired through RICO violations. As noted earlier, any RICO predicate offense is by virtue of that fact a money laundering predicate. RICO violations create a cause of action for treble damages for the benefit of anyone injured in their business or property by the offense. Mail and wire fraud are both money laundering predicate offenses by virtue of their status as RICO predicates. The most commonly prosecuted federal money laundering statute, 18 U.S.C. § 1956, outlaws, among other things, knowingly engaging in a financial transaction involving the proceeds generated by a "specified unlawful activity" (a predicate offense) for the purpose (1) of laundering the proceeds (i.e., concealing their source or ownership), or (2) of promoting further predicating offenses. To establish the concealment offense, the government must establish that "(1) [the] defendant conducted, or attempted to conduct a financial transaction which in any way or degree affected interstate commerce or foreign commerce; (2) the financial transaction involved proceeds of illegal activity; (3) [the] defendant knew the property represented proceeds of some form of unlawful activity, [such as mail or wire fraud]; and (4) [the] defendant conducted or attempted to conduct the financial transaction knowing the transaction was designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds of specified unlawful activity." To prove the promotional offense, "the Government must show that the defendant: (1) conducted or attempted to conduct a financial transaction; (2) which the defendant then knew involved the proceeds of unlawful activity; (3) with the intent to promote or further unlawful activity." Nothing in either provision suggests that the defendant must be shown to have committed the predicate offense. Moreover, simply establishing that the defendant spent or deposited the proceeds of the predicate offense is not enough without proof of an intent to promote or conceal. Either offense is punishable by imprisonment for not more than 20 years and a fine of not more than $500,000. Property involved in a transaction in violation of Section 1956 is subject to civil and criminal forfeiture. Merely depositing the proceeds of a money laundering predicate offense, like mail or wire fraud, does not alone constitute a violation of Section 1956. It is enough for a violation of 18 U.S.C. § 1957, however, if more than $10,000 is involved. Section 1957 uses Section 1956's definition of specified unlawful activities. Thus, mail and wire fraud violations may serve as the basis for the prosecution under Section 1957. "Section 1957 differs from Section 1956 in two critical respects: It requires that the property have a value greater than $10,000, but it does not require that the defendant know of [the] design to conceal aspects of the transaction or that anyone have such a design." Violations are punishable by imprisonment for not more than 10 years and a fine of not more than $250,000 (not more than $500,000) for organizations. The property involved in a violation is subject to forfeiture under either civil or criminal procedures. This category includes the offenses that were made federal crimes because they involve fraud against the United States, or because they are other frauds that share elements with the mail and wire fraud. The most prominent are the proscriptions against defrauding the United States by the submission of false claims, conspiracy to defraud the United States, and material false statements in matters within the jurisdiction of the United States. Bank fraud, health care fraud, securities and commodities fraud, and fraud in foreign labor contracting are mail and wire fraud look-alikes. Section 287 outlaws the knowing submission of a false claim against the United States. "To prove a false claim, the government must prove that (1) [the defendant] 'made and presented' to the government a claim, (2) 'the claim was false, fictitious, or fraudulent,' (3) [the defendant] knew the claim was false, fictitious, or fraudulent, and (4) 'the claim was material' to the government." The offense carries a sentence of imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). The crime is one for which restitution must be ordered. There is no explicit authority for confiscation of property tainted by the offense, but either a private individual or the government may bring a civil action for treble damages under the False Claims Act. Section 287 offenses are neither RICO nor money laundering predicate offenses. Nevertheless, a defendant who presents his false claim by mail or email may find himself charged under both Section 287 and either the mail or wire fraud statutes. The general conspiracy statute has two parts. It outlaws conspiracies to violate the laws of the United States. More relevant here, it also outlaws conspiracies to defraud the United States. "To convict on a charge under the 'defraud' clause, the government must show that the defendant (1) entered into an agreement (2) to obstruct a lawful government function (3) by deceitful or dishonest means and (4) committed at least one overt act in furtherance of the conspiracy." Thus, the "fraud covered by the statute reaches any conspiracy for the purpose of impairing, obstructing or defeating the lawful functions of any department of the Government" by "deceit, craft or trickery, or at least by means that are dishonest." Unlike mail and wire fraud, the government need not show that the scheme was designed to deprive another of money, property, or honest services; it is enough to show that the scheme is designed to obstruct governmental functions. Conspiracy to defraud the United States is punishable by imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). It is neither a RICO nor a money laundering predicate offense. It is an offense for which restitution must be ordered. There is no explicit authority for confiscation of property tainted by the offense. Section 1001 outlaws knowingly and willfully making a material false statement on a matter within the jurisdiction of the executive, legislative, or judicial branch of the federal government. A matter is material for purposes of Section 1001 when "it has a natural tendency to influence, or [is] capable of influencing, the decision of" the individual or entity to whom it is addressed. A matter is within the jurisdiction of a federal entity "when it has the power to exercise authority in a particular matter," and federal jurisdiction "may exist when false statements [are] made to state or local government agencies receiving federal support or subject to federal regulation." A violation of Section 1001 is punishable by imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). It is neither a RICO nor a money laundering predicate offense. It is an offense for which restitution must be ordered. There is no explicit authority for confiscation of property tainted by the offense, unless the offense relates to the activities of various federal financial receivers and conservators. Moreover, in a situation where the offense involves the submission of a false claim, either a private individual or the government may bring a civil action for treble damages under the False Claims Act. Chapter 63 contains four other fraud proscriptions in addition to mail and wire fraud: bank fraud, health care fraud, securities and commodities fraud, and fraud in foreign labor contracting. Each relies on a jurisdictional base other than use of the mail or wire communications. The bank fraud statute outlaws (1) schemes to defraud a federally insured financial institution, and (2) schemes to falsely obtain property from such an institution. To establish the bank- property scheme to defraud offense, "the Government must prove: (1) the defendant knowingly executed or attempted to execute a scheme or artifice to defraud a financial institution; (2) the defendant did so with the intent to defraud a financial institution; and (3) the financial institution was federally insured." As for the bank-custody offense, "the government must prove (1) that a scheme existed to obtain moneys, funds, or credit in the custody of a federally-insured bank by fraud; (2) that the defendant participated in the scheme by means of material false pretenses, representations, or promises; and (3) that the defendant acted knowingly." Violation of either offense is punishable by imprisonment for not more than 30 years and a fine of not more than $1 million. Bank fraud is both a RICO and a money laundering predicate offense. Conviction also requires an order for victim restitution. Property constituting the proceeds of a violation is subject to forfeiture under either civil or criminal procedure. The health care fraud provision follows the pattern of other Chapter 63 offenses. It condemns schemes to defraud. The schemes it proscribes include honest services fraud in the form of bribery and kickbacks. Attempts and conspiracies to violate its prohibitions carry the same penalties as the complete offense it describes. It is often prosecuted along with other related offenses. Parsed to its elements, the section declares: [a] Whoever [b] knowingly and willfully [c] executes or attempts to execute [d] a scheme or artifice (1) to defraud any health care benefit program, or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property owned by, or under the custody or control of, any health care benefit program [e] in connection with the delivery of or payment for health care benefits, items, or services shall be … Section 1347's penalty structure is somewhat distinctive. General violations are punishable by imprisonment for not more than 10 years and fines of not more than $250,000. Should serious bodily injury result, however, the maximum penalty is increased to imprisonment for not more than 20 years; should death result, the maximum penalty is imprisonment for life or any term of years. Section 1347 offenses are neither money laundering nor RICO predicate offenses, and proceeds of a violation of Section 1347 are not subject to confiscation. Victims, however, are entitled to restitution. Section 1348, the securities and commodities fraud prohibition, continues the progression of separating its defrauding feature from its obtaining-property feature. The elements of defrauding offense "are (1) fraudulent intent, (2) a scheme or artifice to defraud, and (3) a nexus with a security." To prove a violation of Section 1348(2), the government must establish that the defendant (1) executed, or attempted to execute, a scheme or artifice; (2) with fraudulent intent; (3) in order to obtain money or property; (4) by material false or fraudulent pretenses, representations, or promises. A conviction for mail fraud or wire fraud, or both, sometimes accompanies a conviction for securities fraud under Section 1348. Under either version of Section 1348, offenders face imprisonment for not more than 25 years and fines of not more than $250,000 (not more than $500,000 for organizations). The offense s are neither money laundering nor RICO predicate offense s . Victim restitution must be ordered upon conviction, but forfeiture is not authorized. "The substantive offense of fraud in foreign labor contracting [under 18 U.S.C. § 1351] occurs when someone: (1) recruits, solicits, or hires a person outside the United States, or causes another person to do so, or attempts to do so; (2) does so by means of materially false or fraudulent pretenses, representations or promises regarding that employment; and (3) acts knowingly and with intent to defraud." The offense occurs outside the United States when related to a federal contract or U.S. presence abroad. The offense is a RICO predicate offense and consequently a money laundering predicate offense as well. A restitution order is required at sentencing, but forfeiture is not authorized. After the Supreme Court's 2010 decision in Skillin g v. United States , honest services mail and wire fraud consists of bribery and kickback schemes furthered by use of the mail or wire communications. Mail and wire fraud aside, the principal bribery and kickback statutes include 18 U.S.C. §§ 201(b)(1) (bribery of federal officials), 666 (bribery relating to federal programs), 1951 (extortion under color of official right); 15 U.S.C §§ 78dd-1 to 78dd-3 (foreign corrupt practices); and 42 U.S.C. § 1320a-7b (Medicare/Medicaid anti-kickback). Conviction for violation of Section 201(b)(1) "requires a showing that something of value was corruptly ... offered or promised to a public official ... or corruptly ... sought ... or agreed to be received by a public official with intent ... to influence any official act ... or in return for 'being influenced in the performance of any official act." The hallmark of the offense is a corrupt quid pro quo, "a specific intent to give or receive something of value in exchange for an official act." The public officials covered include federal officers and employees, those of the District of Columbia, and those who perform tasks for or on behalf of the United States or any of its departments or agencies. The official acts that constitute the objective of the corrupt bargain include any decision or action relating to any matter coming before an individual in his official capacity. Section 201 punishes bribery with imprisonment for up to 15 years, a fine of up to $250,000 (up to $500,000 for an organization), and disqualification from future federal office or employment. Section 201 is a RICO predicate offense and consequently also a money laundering predicate offense. The proceeds of a bribe in violation of Section 201 are subject to forfeiture under either civil or criminal procedure. Section 666 outlaws both (1) fraud and (2) bribery by the faithless agents of state, local, tribal, or private entities—that receive more than $10,000 in federal benefits—in relation to a transaction of $5,000 or more. "A violation of Section 666(a)(1)(A) requires proof of five elements. The government must prove that: (1) a defendant was an agent of an organization, government, or agency; (2) in a one-year period that organization, government, or agency received federal benefits in excess of $10,000; (3) a defendant … obtained by fraud … ; (4) … property owned by, or in the care, custody, or control of, the organization, government, or entity; and (5) the value of that property was at least $5,000." "A person is guilty under § 666[(a)(1)(B)] if he, being an agent of an organization, government, or governmental agency that receives federal-program funds, corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more." Agents are statutorily defined as "person[s] authorized to act on behalf of another person or a government and, in the case of an organization or government, includes a servant or employee, and a partner, director, officer, manager, and representative." The circuits appear divided over whether the government must establish a quid pro quo as in a Section 201 bribery case. The government, however, need not establish that the tainted transaction involves federal funds. Violations of Section 666 are punishable by imprisonment for not more than 10 years and a fine of not more than $250,000 (not more than $500,000 for organizations). Section 666 offenses are money laundering predicate offenses. Section 666 offenses are not among the RICO federal predicate offenses, although bribery in violation of state felony laws is a RICO predicate offense. The proceeds of a bribe in violation of Section 666 are subject to forfeiture under either civil or criminal procedure. The Hobbs Act, 18 U.S.C. § 1951, outlaws obtaining the property of another under "color of official right," in a manner that has an effect on interstate commerce. Conviction requires the government to prove that the defendant "(1) was a government official; (2) who accepted property to which she was not entitled; (3) knowing that she was not entitled to the property; and (4) knowing that the payment was given in return for officials acts: (5) which had at least a de minimis effect on commerce." Conviction does not require that the public official sought or induced payment: "the government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts." Hobbs Act violations are punishable by imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for an organization). Hobbs Act violations are RICO predicate offenses and thus money laundering predicates as well. The proceeds of a Hobbs Act violation are subject to forfeiture under either civil or criminal procedure. The bribery provisions of the Foreign Corrupt Practices Act (FCPA) are three: 15 U.S.C. §§ 78dd-1 (trade practices by issuers), 78dd-2 (trade practices by domestic concerns), and 78dd-3 (trade practices by others within the United States). Other than the class of potential defendants, the elements of the three are comparable. They make[] it a crime to: (1) willfully; (2) make use of the mail or any means or instrumentality of interstate commerce; (3) corruptly; (4) in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to; (5) any foreign official; (6) for purposes of [either] influencing any act or decision of such foreign official in his official capacity [or] inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official [or] securing any improper advantage; (7) in order to assist such [corporation] in obtaining or retaining business for or with, or directing business to, any person. None of the three proscriptions apply to payments "to expedite or to secure the performance of a routine governmental action," and each affords defendants an affirmative defense for payments that are lawful under the applicable foreign law or regulation. Violations are punishable by imprisonment for not more than five years and by a fine of not more than $100,000 (not more than $2 million for organizations). Foreign Corrupt Practices Act violations are not RICO predicate offenses, but they are money laundering predicates. The proceeds of a violation are subject to forfeiture under either civil or criminal procedure. The Medicare/Medicaid kickback prohibition in 42 U.S.C. 1320a-7b(b) outlaws "knowingly and willfully [offering or paying], soliciting [or] receiving, any remuneration (including any kickback) ... (A) to induce the referral of [, or (B) the purchase with respect to] Medicare [or] Medicaid beneficiaries ... any item or service for which payment may be made in whole or in part under the Medicare [or] Medicaid programs...." Violations are punishable by imprisonment for not more than five years and by a fine of not more than $25,000. Section 1320a-7b kickback violations are money laundering, but not RICO, predicate offenses. The proceeds of a violation are subject to forfeiture under either civil or criminal procedure. Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both. Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5122 )), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both. For the purposes of this chapter, the term "scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right of honest services. Any person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.
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The mail and wire fraud statutes are exceptionally broad. Their scope has occasionally given the courts pause. Nevertheless, prosecutions in their name have brought to an end schemes that have bilked victims out of millions, and sometimes billions, of dollars. The statutes proscribe (1) causing the use of the mail or wire communications, including email; (2) in conjunction with a scheme to intentionally defraud another of money or property; (3) by means of a material deception. The offenses, along with attempts or conspiracies to commit them, carry a term of imprisonment of up to 30 years in some cases, followed by a term of supervised release. Offenders also face the prospect of fines, orders to make restitution, and forfeiture of their property. The mail and wire fraud statutes overlap with a surprising number of other federal criminal statutes. Conduct that supports a prosecution under the mail or wire fraud statutes will often support prosecution under one or more other criminal provision(s). These companion offenses include (1) those that use mail or wire fraud as an element of a separate offense, like racketeering or money laundering; (2) those that condemn fraud on some jurisdictional basis other than use of the mail or wire communications, like those that outlaw defrauding the federal government or federally insured banks; and (3) those that proscribe other deprivations of honest services (i.e., bribery and kickbacks), like the statutes that ban bribery of federal officials or in connection with federal programs. Among the crimes for which mail or wire fraud may serve as an element, RICO (Racketeer Influenced and Corrupt Organizations Act) outlaws employing the patterned commission of predicate offenses to conduct the affairs of an enterprise that impacts commerce. Money laundering consists of transactions involving the proceeds of a predicate offense in order to launder them or to promote further predicate offenses. The statutes that prohibit fraud in some form or another are the most diverse of the mail and wire fraud companions. Congress modeled some after the mail and wire fraud statutes, incorporating elements of a scheme to defraud or obtain property by false pretenses into statutes that outlaw bank fraud, health care fraud, securities fraud, and foreign labor contracting fraud. Congress designed others to protect the public fisc by proscribing false claims against the United States, conspiracies to defraud the United States by obstructing its functions, and false statements in matters within the jurisdiction of the United States and its departments and agencies. Federal bribery and kickback statutes populate the third class of wire and mail fraud companions. One provision bans offering or accepting a thing of value in exchange for the performance or forbearance of a federal official act. Another condemns bribery of faithless agents in connection with federally funded programs and activities. A third, the Hobbs Act, outlaws bribery as a form of extortion under the color of official right. The fines, prison sentences, and other consequences that follow conviction for wire and mail fraud companions vary considerably, with fines from not more than $25,000 to not more than $2 million and prison terms from not more than five years to life.
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Congress passed the Community Reinvestment Act of 1977 (CRA; P.L. 95-128 , 12 U.S.C. §§2901-2908) in response to concerns that federally insured banking institutions were not making sufficient credit available in the local areas in which they were chartered and acquiring deposits. According to some in Con gress, the granting of a public bank charter should translate into a continuing obligation for that bank to serve the credit needs of the public where it was chartered. Consequently, the CRA was enacted to "re-affirm the obligation of federally chartered or insured financial institutions to serve the convenience and needs of their service areas" and "to help meet the credit needs of the localities in which they are chartered, consistent with the prudent operation of the institution." The CRA requires federal banking regulators to conduct examinations to assess whether a bank is meeting local credit needs. The regulators issue CRA credits, or points, where banks engage in qualifying activities—such as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit low- and moderate-income (LMI) areas and entities—that occur within assessment areas (where institutions have local deposit-taking operations). These credits are then used to issue each bank a performance rating from a four-tiered system of descriptive performance levels (Outstanding, Satisfactory, Needs to Improve, or Substantial Noncompliance). The CRA requires federal banking regulators to take those ratings into account when institutions apply for charters, branches, mergers, and acquisitions, or seek to take other actions that require regulatory approval. Congress became concerned with the geographical mismatch of deposit-taking and lending activities for a variety of reasons. Deposits serve as a primary source of borrowed funds that banks may use to facilitate their lending. Hence, there was concern that banks were using deposits collected from local neighborhoods to fund out-of-state as well as various international lending activities at the expense of addressing the local area's housing, agricultural, and small business credit needs. Another motivation for congressional action was to discourage redlining practices. One type of redlining can be defined as the refusal of a bank to make credit available to all of the neighborhoods in its immediate locality, including LMI neighborhoods where the bank may have collected deposits. A second type of redlining is the practice of denying a creditworthy applicant a loan for housing located in a certain neighborhood even though the applicant may qualify for a similar loan in another neighborhood. This type of redlining pertains to circumstances in which a bank refuses to serve all of the residents in an area, perhaps due to discrimination. The CRA applies to banking institutions with deposits insured by the Federal Deposit Insurance Corporation (FDIC), such as national banks, savings associations, and state-chartered commercial and savings banks. The CRA does not apply to credit unions, insurance companies, securities companies, and other nonbank institutions because of the differences in their financial business models. The Office of the Comptroller of the Currency (OCC), the Federal Reserve System, and the FDIC administer the CRA, which is implemented via Regulation BB. The CRA requires federal banking regulatory agencies to evaluate the extent to which regulated institutions are effectively meeting the credit needs within their designated assessment areas, including LMI neighborhoods, in a manner consistent with the federal prudential regulations for safety and soundness . The CRA's impact on lending activity has been publicly debated. Some observers are concerned that the CRA may induce banks to forgo more profitable lending opportunities in nontargeted neighborhoods by encouraging a disproportionate amount of lending in LMI communities. Furthermore, some argue that the CRA compels banks to make loans to higher-risk borrowers that are more likely to have repayment problems, which may subsequently compromise the financial stability of the banking system. For example, some researchers have attributed the increase in risky lending prior to the 2007-2009 recession to banks attempting to comply with CRA objectives. Others are concerned that enforcement of CRA objectives has not been stringent enough to compel banks to increase financial services in LMI areas. Almost all banks receive Satisfactory or better performance ratings (discussed in more detail below) on their CRA examinations, which some may consider indicative of weak enforcement. This report informs the congressional debate concerning the CRA's effectiveness in incentivizing bank lending and investment activity to LMI customers. It begins with a description of bank CRA examinations, including how a bank delineates its assessment area; the activities that may qualify for points under the three tests (i.e., lending, investment, and service) that collectively make up the CRA examination; and how the composite CRA rating is calculated. Next, the report analyzes the difficulty in attributing bank lending decisions to CRA incentives. For example, the CRA does not specify the quality and quantity of CRA-qualifying activities, meaning that CRA compliance does not require adherence to lending quotas or benchmarks. Without explicit benchmarks, linking the composition of banks' loan portfolios to either too strong or too weak CRA enforcement is difficult. Banks are also unlikely to get CRA credit for all of the loans they make to LMI customers. Specifically, higher-risk loans that banking regulators explicitly discourage are unlikely to be eligible for CRA consideration. Furthermore, greater mobility of lending and deposit-taking activity across regional boundaries due to various financial market innovations has complicated the ability to geographically link various financial activities. Hence, many banks' financial activities occurring in a designated assessment area that are eligible for CRA consideration may simply be profitable, meaning they may have occurred without the CRA incentive. Finally, this report summarizes recent policy discussions regarding modernization of the CRA. As noted above, the federal banking regulators conduct regular examinations of banks to assess whether they meet local credit needs in designated assessment areas. The regulators issue CRA credits, or points, when banks engage in qualifying activities—such as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entities—that occur within assessment areas. Regulation BB provides the criteria that a bank's board of directors must use to determine the assessment area(s) in which its primary regulator will conduct its CRA examination. The assessment area typically has a geographical definition—the location of a bank's main office, branches, and deposit-taking automatic teller machines, as well as surrounding areas where the bank originates and purchases a substantial portion of loans. Assessment areas must generally include at least one metropolitan statistical area (MSA) or at least one contiguous political subdivision, such as a county, city, or town. Regulation BB also requires that assessment areas may not reflect illegal discrimination, arbitrarily exclude LMI geographies, and extend substantially beyond an MSA boundary or a state boundary (unless the assessment area is located in a multistate MSA). Banking regulators regularly review a bank's assessment area delineations for compliance with Regulation BB requirements as part of the CRA examination. Instead of a more conventionally delineated assessment area, certain banking firms may obtain permission to devise a strategic plan for compliance with Regulation BB requirements. For example, wholesale and limited purpose banks are specialized banks with nontraditional business models. Wholesale banks provide services to larger clients, such as large corporations and other financial institutions; they generally do not provide financial services to retail clients, such as individuals and small businesses. Limited purpose banks offer a narrow product line (e.g., concentration in credit card lending) rather than provide a wider range of financial products and services. These banking firms typically apply to their primary regulators to request designation as a wholesale or limited purpose bank and, for CRA examination purposes, are evaluated under strategic plan options that have been tailored for their distinctive capacities, business strategies, and expertise. The option to develop a strategic plan of pre-defined CRA performance goals is available to any bank subject to the CRA. The public is allowed time (e.g., 30 days) to provide input on the draft of a bank's strategic plan, after which the bank submits the plan to its primary regulator for approval (within 60 days after the application is received). Regulation BB does not impose lending quotas or benchmarks. Instead, Regulation BB provides banks with a wide variety of options to serve the needs of their assessment areas. Qualifying CRA activities include mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entities. For example, banks may receive CRA credits for such activities as investing in special purpose community development entities (CDEs), which facilitate capital investments in LMI communities (discussed below); providing support (e.g., consulting, detailing an employee, processing transactions for free or at a discounted rate, and providing office facilities) to minority- and women-owned financial institutions and low-income credit unions (MWLIs), thereby enhancing their ability to serve LMI customers; serving as a joint lender for a loan originated by MWLIs; facilitating financial literacy education to LMI communities, including any support of efforts of MWLIs and CDEs to provide financial literacy education; opening or maintaining bank branches and other transactions facilities in LMI communities and designated disaster areas; providing low-cost education loans to low-income borrowers; and offering international remittance services in LMI communities. The examples listed above are not comprehensive, but they illustrate several activities banks may engage in to obtain consideration for CRA credits. The banking regulators will consider awarding CRA credits or points to a bank if its qualifying activities occur within an assigned assessment area. The points are then used to compute a bank's overall composite CRA rating. Regulators apply up to three tests, which are known as the lending , investment , and service tests, respectively, to determine whether a bank is meeting local credit need in designated assessment areas. The lending test evaluates the number, amount, and distribution across income and geographic classifications of a bank's mortgage, small business, small farm, and consumer loans. The investment test grades a bank's community development investments in the assessment area. The service test examines a bank's retail service delivery, such as the availability of branches and low-cost checking in the assessment area. The point system for bank performance under the lending, investment, and service tests is illustrated in Table 1 . The lending test is generally regarded as the most important of the three tests, awarding banks the most points (CRA credits) in all rating categories. As shown in Table 1 , banks receive fewer credits for making CRA-qualified investments than for providing direct loans to individuals under the lending test. In some instances, an activity may qualify for more than one of the performance tests. Federal banking regulators evaluate financial institutions based upon their capacity, constraints, and business strategies; demographic and economic data; lending, investment, and service opportunities; and benchmark against competitors and peers. Because these factors vary across banks, the CRA examination was customized in 1995 to account for differences in bank sizes and business models. In 2005, the bank size definitions were revised to include small , intermediate small , and large banks. The bank regulators also indexed the asset size thresholds—which are adjusted annually—to inflation using the Consumer Price Index. As of January 1, 2019, a small bank is defined as having less than $1.284 billion in assets as of December 31 of either of the prior two calendar years; an intermediate small bank has at least $321 million as of December 31 of both of the prior two calendar years but less than $1.284 billion as of December 31 of either of the prior two calendar years; and a large bank has $1.284 billion or more in assets. Small banks are typically evaluated under the lending test. Regulators review (1) loan-to-deposit ratios; (2) percentage of loans in an assessment area; (3) lending to borrowers of different incomes and in different amounts; (4) geographical distribution of loans; and (5) actions on complaints about performance. Intermediate small banks are subject to both the lending and investment tests. Large banks are subject to all three tests. As mentioned previously, direct lending to borrowers, taking place in what is referred to as primary lending markets , qualify for CRA credit under the lending test. Investments taking place in secondary lending markets , in which investors purchase loans that have already been originated (such that little or no direct interaction occurs between investors and borrowers), qualify for CRA credit under the investment test. Secondary market investors may assume the default risk associated with a loan if the entire loan is purchased. Alternatively, if a set of loans are pooled together, then numerous secondary investors may purchase financial securities in which the returns are generated by the principal and interest repayments from the underlying loan pool, thereby sharing the lending risk. Direct ownership of loans or purchases of smaller portions (debt securities) of a pool of loans, therefore, are simply alternative methods to facilitate lending. As shown in Table 1 above, a bank may receive CRA consideration under the lending test for making a loan to LMI individuals that is guaranteed by a federal agency, such as the Federal Home Administration (FHA). If, however, a bank purchases securities backed by pools of FHA-guaranteed mortgage originations, this activity receives credit under the investment test. Thus, the bank receives less CRA credit when the financial risk is shared with other lenders than it would for making a direct loan (and holding all of the lending risk) even though it would still facilitate lending to LMI borrowers. In 2005, the activities that qualify for CRA credit were expanded to encourage banks to make public welfare investments. More specifically, qualifying activities include a public welfare investment (PWI) that promotes the public welfare by providing housing, services, or jobs that primarily benefit LMI individuals; and a community development investment (CDI), economic development investment , or project that meets the PWI requirements. Examples of CDI activities include promoting affordable housing, financing small businesses and farms, and conducting activities that revitalize LMI areas. Banks may engage in certain activities that typically would not be permitted under other banking laws as long as these activities promote the public welfare and do not expose institutions to unlimited liability. For example, banks generally are not allowed to make direct purchases of the preferred or common equity shares of other banking firms; however, banks may purchase equity shares of institutions with a primary mission of community development (discussed in more detail in the Appendix ) up to an allowable CDI limit. The Financial Services Regulatory Relief Act of 2006 ( P.L. 109-351 ) increased the amount that national banking associations and state banks (that are members of the Federal Reserve System) may invest in a single institution from 10% to 15% of a bank's unimpaired capital and unimpaired surplus. CDIs that benefit a bank's designated assessment area may qualify for CRA credit. For CRA purposes, the definition of a CDI was expanded in 2005 to include "underserved and distressed" rural areas and "designated disaster areas" to aid the regional rebuilding from severe hurricanes, flooding, earthquakes, tornados, and other disasters. The disaster area provision allows banks anywhere in America to receive consideration for CRA credit if they facilitate making credit available to a distressed location or geographic area outside of their own assessment areas. Thus, the 2005 revisions to the PWI and CDI definitions made more banking activities eligible for CRA credits. The banking regulators would consider awarding full CRA credits under the lending test to banks that make CDI loans directly in their assessment areas. Under the investment test, however, the banking regulators may choose to prorate the credits awarded to indirect investments. The Appendix provides examples of CDI activities that would qualify for CRA consideration under the investment test. Any awarded CRA credits could be prorated given that investing banks typically would have less control over when and where the funds are loaned. The CRA was revised in 1989 to require descriptive CRA composite performance ratings that must be disclosed to the public. The composite ratings illustrated in Table 2 are tabulated using the points assigned from the individual tests (shown in Table 1 above). Grades of Outstanding and Satisfactory are acceptable; Satisfactory ratings in both community development and retail lending are necessary for a composite Satisfactory . Large banks must receive a sufficient amount of points from the investment and service tests to receive a composite Outstanding rating. Regulators include CRA ratings as a factor when lenders request permission to engage in certain activities, such as moving offices or buying another institution. Denying requests, particularly applications for mergers and acquisitions, is a mechanism that may be applied against banking organizations with ratings below Satisfactory . In 2005, the banking regulators also ruled that any evidence of discrimination or credit practices that violate an applicable law, rule, or regulation by any affiliate would adversely affect an agency's evaluation of a bank's CRA performance. Applicants with poor ratings may resubmit their applications after making the necessary improvements. Covered institutions must post a CRA notice in their main offices and make publicly available a record of their composite CRA performance. Given that the CRA is not a federal assistance program and that several regulators implement it separately, no single federal agency is responsible for evaluating its overall effectiveness. In 2000, Congress directed the Federal Reserve to study the CRA's effectiveness. The Federal Reserve's study reported that lending to LMI families had increased since the CRA's enactment but found it was not possible to directly attribute all of that increase to the CRA. For example, advancements in underwriting over the past several decades have enabled lenders to better predict and price borrower default risk, thus making credit available to borrowers that might have been rejected prior to such technological advances. This section examines the difficulty linking bank lending outcomes directly to the CRA, considering questions raised about the subjectivity of the CRA examination itself, whether prudential regulators use CRA to encourage banks to engage in high-risk lending, and whether the increased lending to LMI borrowers since CRA's enactment can be attributed to other profit-incentives that exist apart from the CRA. Questions have been raised as to whether the CRA examination itself is effective at measuring a bank's ability to meet local credit needs. For example, the CRA examinations have an element of subjectivity in terms of measuring both the quality and quantity of CRA compliance. In terms of quality, regulators determine the "innovativeness or flexibility" of qualified loan products; the "innovativeness or complexity" of qualified investments; or the "innovativeness" of ways banks service groups of customers previously not served. The number of points some CRA-qualifying investments receive relative to others is up to the regulator's judgment given that no formal definition of innovativeness has been established (although regulators provide a variety of examples as guidelines for banks to follow). In terms of quantity, there is no official quota indicating when banks have done enough CRA-qualified activities to receive a particular rating. Without specific definitions of the criteria or quotas, the CRA examination may be considered subjective. Almost all banks pass their CRA examinations. Figure 1 shows the average annual composite scores of banks that received CRA examinations as well as the annual number of bank examinations by size. In general, most banks receive a composite Satisfactory or better rating regardless of the number of banks examined in a year. For all years, approximately 97% or more of banks examined received ratings of Satisfactory or Outstanding . Whether the consistently high ratings reflect the CRA's influence on bank behavior or whether the CRA examination procedures need improvement is difficult to discern. Another issue raised is whether the CRA has resulted in banks making more high-risk loans given that it encourages banks to lend to LMI individuals (perhaps under the presumption that LMI individuals are less creditworthy relative to higher-income individuals). Since passage of the CRA, however, innovations have allowed lenders to better evaluate the creditworthiness of borrowers (e.g., credit scoring, the adoption of automated underwriting), thus enhancing credit availability to both high credit quality and credit-impaired individuals. Credit-impaired borrowers can be charged higher interest rates and fees than those with better credit histories to compensate lenders for taking on greater amounts of credit or default risk. Nontraditional loan products (e.g., interest-only, initially low interest rate) allow borrowers to obtain lower regular payments during the early stages of the loan, perhaps under the expectation that their financial circumstances may improve in the later stages as the loan payments adjust to reflect the true costs. The ability to charge higher prices or offer such nontraditional loan products may result in greater higher-risk lending. Because these technological developments in the financial industry occurred after enactment of the CRA, banks' willingness to enter into higher-risk lending markets arguably cannot be attributed solely to the CRA. Regulators arguably are more reluctant to award banks CRA credit for originating higher-risk loans given the scrutiny necessary to determine whether higher loan prices reflect elevated default risk levels or discriminatory or predatory lending practices. Primary bank regulators are concerned with both prudential regulation and consumer protection. It is difficult for regulators to monitor how well borrowers understood the disclosures regarding loan costs and features, or whether any discriminatory or predatory behavior occurred at the time of loan origination. Regulators use fair lending examinations to determine whether loan pricing practices have been applied fairly and consistently across applicants or if some steering to higher-priced loan products occurred. Nevertheless, although it is not impossible for banks to receive CRA credits for making some higher-priced loans, regulators are mindful of practices such as improper consumer disclosure, steering, or discrimination that inflate loan prices. Prudential regulators are also unlikely to encourage lending practices that might result in large concentrations of high-risk loans on bank balance sheets. Hence, certain lending activities—subprime mortgages and payday lending—have been explicitly discouraged by bank regulators, as discussed in more detail below. Although no consensus definition has emerged for subprime lending, this practice may generally be described as lending to borrowers with weak credit at higher costs relative to borrowers of higher credit quality. In September 2006, the banking regulatory agencies issued guidance on subprime lending that was restrictive in tone. The guidance warned banks of the risk posed by nontraditional mortgage loans, including interest-only and payment-option adjustable-rate mortgages. The agencies expressed concern about these loans because of the lack of principal amortization and the potential for negative amortization. Consequently, a study of 2006 Home Mortgage Disclosure Act data reported that banks subject to the CRA and their affiliates originated or purchased only 6% of the reported high-cost loans made to lower-income borrowers within their CRA assessment areas. Banks, therefore, received little or no CRA credit for subprime mortgage lending. Instead, federal regulators offered CRA consideration to banks that helped mitigate the effects of distressed subprime mortgages. On April 17, 2007, federal regulators provided examples of various arrangements that financial firms could provide to LMI borrowers to help them transition into affordable mortgages and avoid foreclosure. The various workout arrangements were eligible for favorable CRA consideration. Banks are unlikely to receive CRA consideration for originating subprime mortgages going forward. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act; P.L. 111-203 ) requires lenders to consider consumers' ability to repay before extending them mortgage credit, and one way for lenders to comply is to originate qualified mortgages (QMs) that satisfy various underwriting and product-feature requirements. For example, QMs may not have any negative amortization features, interest-only payments, or points and fees that exceed specified caps of the total loan amount; in most cases, borrowers' debt-to-income ratios shall not exceed 43%. QM originations will give lenders legal protections if the required income verification and other proper underwriting procedures were followed. Given the legal protections afforded to QMs, some banks might show greater reluctance toward making non-QM loans. With this in mind, the federal banking regulators announced that banks choosing to make only or predominately QM loans should not expect to see an adverse effect on their CRA evaluations; however, the regulators did not indicate that CRA consideration would be given for non-QMs. Arguably, the federal banking regulators appear less inclined to use the CRA to encourage lending that could be subject to greater legal risks. Banks have demonstrated interest in providing financial services such as small dollar cash advances, which are similar to payday loans, in the form of subprime credit cards, overdraft protection services, and direct deposit advances. However, banks are discouraged from engaging in payday and similar forms of lending. Legislation, such as the Credit Card Accountability Responsibility and Disclosure Act of 2009 ( P.L. 111-24 ), placed restrictions on subprime credit card lending. In addition, federal banking regulators expressed concern when banks began offering deposit advance products due to the similarities to payday loans. Specifically, on April 25, 2013, the OCC, FDIC, and Federal Reserve expressed concerns that the high costs and repeated extensions of credit could add to borrower default risks and issued final supervisory guidance regarding the delivery of these products. Many banks subsequently discontinued offering deposit advances. In general, these legislative and regulatory efforts explicitly discourage banks from offering high-cost consumer financial products and thus such products are unlikely to receive CRA consideration. When various financial products are deemed unsound by bank regulators and not offered by banks, a possible consequence may be that some customers migrate to nonbank institutions willing to provide these higher-cost products. Accordingly, the effectiveness of the CRA diminishes if more individuals choose to seek financial products from nonbank institutions. In general, it can be difficult to determine the extent to which banks' financial decisions are motivated by CRA incentives, profit incentives, or both. Compliance with CRA does not require banks to make unprofitable, high-risk loans that would threaten the financial health of the bank. Instead, CRA loans have profit potential; and bank regulators require all loans, including CRA loans, to be prudently underwritten. As evidenced below, it may be difficult to determine whether banks have made particular financial decisions in response to profit or CRA incentives in cases where those incentives exist simultaneously. For example, banks increased their holdings of municipal bonds in 2009. Although banks may receive CRA consideration under the investment test for purchasing state and local municipal bonds that fund public and community development projects in their designated assessment areas, banks may choose this investment for reasons unrelated to CRA. During recessions, for example, banks may reduce direct (or primary market) lending activities and increase their holdings of securities in the wake of declining demand for and supply of direct loan originations that occur during economic slowdowns and early recovery periods. In addition, a provision of the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) provided banks with a favorable tax incentive to invest in municipal bonds in the wake of the 2007-2009 recession. Hence, determining whether banks increased their municipal holdings because of a turn to securities markets for higher yields following a recession, a favorable tax incentive, or the CRA incentive is challenging. Similarly, banks increased their investments in Small Business Investment Corporations (SBICs, defined in the Appendix ) in 2010. Investments in SBICs allow banks to provide subordinate financing (rather than senior debt) to businesses. Senior lenders have first claims to the business's assets in case of failure; however, subordinate financiers provide funds in the form of mezzanine capital or equity, requiring a higher return because they are repaid after senior lenders. Banks generally are not allowed to act as subordinate financiers because they are not allowed to acquire ownership interests in private equity funds, unless such investments promote public welfare. Hence, attributing community development financing activities, such as SBIC investments, to CRA incentives may arguably be easier (relative to other financing activities) because the ability to engage in subordinate financing activities typically represents a CRA exemption from ordinary permissible banking activities. Following the 2007-2009 recession, however, U.S. interest rates dropped to historically low levels for an abnormally long period of time. Because low-yielding interest rate environments squeeze profits, banks were likely to search for higher-yielding and larger-sized lending opportunities, such as investments in SBICs. Hence, it remains difficult to determine whether a particular bank's decision to increase SBIC financing activities was driven by normal profit or CRA-related incentives. Between June 2016 and June 2017, more than 1700 U.S. bank branches were closed. Many branch closings occurred primarily in rural and low-income tract areas, raising concerns that banks would be able to circumvent their CRA obligation to lend and be evaluated in these areas. A traditional bank business model, however, relies primarily on having access to core deposits , a stable source of funds used to subsequently originate loans. Banks value geographic locations with greater potential to attract high core deposit volumes, which is also consistent with the CRA's requirement that assessment areas include at least one MSA or contiguous political subdivision (as previously discussed). Furthermore, using FDIC and U.S. Census Bureau data, the Federal Reserve noted that the number of branches per capita in 2017 was higher than two decades ago. Hence, determining whether branch closures reflect a bank's intentions to circumvent CRA compliance or to facilitate its ability to attract core deposits is challenging. On April 3, 2018, the U.S. Department of Treasury (Treasury) released recommendations to modernize CRA in a memorandum to the federal banking regulators (OCC, FCIC, and the Fed). Treasury highlighted four of its recommendations, summarized below. When the CRA was enacted in 1977, banks received deposits and made loans primarily through geographical branches. Assessment areas defined geographically arguably may not fully reflect the community served by a bank because of technology developments, such as the internet and mobile phone banking, prompting Treasury to call for revisiting the approach for determining banks' assessment areas. In 2016, the banking regulators issued Interagency Questions and Answers (Q&As) to provide banks guidance pertaining to CRA-eligible activities; however, Treasury noted that each regulator provides its examiners with additional guidance. Also, the Interagency Q&As illustrate past CRA-qualifying activities, but Treasury noted that no formal process currently exists to help determine whether potential (complex, innovative, or innovative) activities would qualify for CRA credit. Treasury recommends establishing clearer standards for CRA-qualifying activities and flexibility (expanding the types of loans, investments, and services that qualify for CRA credit), which may encourage banks to venture beyond activities that typically receive CRA credit. Treasury reports that each bank regulator follows a different examination schedule; the examinations are lengthy; and delays associated with the release of performance evaluations may limit the time banks can react to recommendations before their next CRA examination. Treasury recommends increasing the timeliness of the CRA examination process. Treasury recommends incorporating performance incentives that might result in more efficient lending activities. For example, CRA-qualifying loans may receive credit in the year of origination, but equity investments may receive credit each year that the investment is held. Treasury recommends consistent treatment of loans and investments, which may encourage banks to make more long-term loans (rather than sequences of short-term loans for the sake of being awarded CRA credits at each CRA examination). On August, 28, 2018, the OCC released an Advance Notice of Proposed Rulemaking (ANPR) to seek comments on ways to modernize the CRA framework. The ANPR solicited comments on the issues raised by Treasury among other things. The OCC's ANPR does not propose specific changes, but its content and the questions posed suggest that the OCC is exploring the possibility of adopting a quantitative metric-based approach to CRA performance evaluation, changing how assessment areas are defined, expanding CRA-qualifying activities, and reducing the complexity, ambiguity, and burden of the regulations on the bank industry. When the comment period closed on November 19, 2018, the OCC had received 1584 comments. The Federal Reserve and the FDIC did not join the OCC in releasing the ANPR. The Federal Reserve System, however, did host research symposiums around the country to gather comments pertaining to CRA reform. As reported by the Federal Reserve, some banking industry comments suggested, among other things, the need for consistency of the CRA examinations to facilitate CRA compliance. Yet some tailoring may still be necessary with respect to determining assessment areas that better reflect each bank's business models, particularly for models that use technology to deliver products and services. The regulators also heard from community and consumer groups. While expressing the need to retain focus on the historical context of the CRA, these groups highlighted the need to address issues pertaining to banking deserts in underserved communities. Community development investments (CDIs) that meet public welfare investment (PWI) requirements are those that promote the public welfare, primarily resulting in economic benefits for low- and moderate-income (LMI) individuals. This appendix provides examples of CDI activities that would qualify for consideration under the CRA investment test. In many cases, covered banks are more likely to take advantage of these optional vehicles to obtain CRA credits if they perceive the underlying investment opportunities to have profit potential. Loan Participations Banks and credit unions often use participation (syndicated) loans to jointly provide credit. When a financial firm (e.g., bank, credit union) originates a loan for a customer, it may decide to structure loan participation arrangements with other institutions. The loan originator often retains a larger portion of the loan and sells smaller portions to other financial institutions willing to participate. Suppose a financial firm originates a business or mortgage loan in a LMI neighborhood. A bank may receive CRA investment credit consideration by purchasing a participation, thus becoming a joint lender to the LMI borrower. An advantage of loan participations is that the default risk is divided and shared among the participating banks (as opposed to one financial firm retaining all of the risk). CRA consideration is possible if the activity occurs within the designated assessment area. For all participating banks to receive credit, some overlap in their designated assessment areas must exist. An exception is made for participations made to benefit designated disaster areas, in which all participating banks would receive CRA consideration regardless of location. State and Local Government Bonds State and local governments issue municipal bonds, and the proceeds are used to fund public projects, community development activities, and other qualifying activities. The interest that nonbank municipal bondholders receive is exempt from federal income taxes to encourage investment in hospitals, schools, infrastructure, and community development projects that require state and local funding. Legislative actions during the 1980s eliminated the tax-exempt status of interest earned from holdings of municipal bonds for banks. Although banks no longer have a tax incentive to purchase municipal bonds, they still consider the profitability of holding these loans, as they do with all lending opportunities. Furthermore, banks receive CRA investment consideration when purchasing state and local municipal bonds that fund public and community development projects in their designated assessment areas. CRA-Targeted Secondary Market Instruments Secondary market financial products have been developed to facilitate the ability of banks to participate in lending activities eligible for CRA consideration, such as purchasing mortgage-backed securities (MBSs) or shares of real estate investment trusts (REITs). A MBS is a pool of mortgage loans secured by residential properties; a multifamily MBS is a pool of mortgage loans secured by multifamily properties, consisting of structures designed for five or more residential units, such as apartment buildings, hospitals, nursing homes, and manufactured homes. CRA-MBSs are MBSs consisting of loans that originated in specific geographic assessment areas, thereby allowing bank purchases into these pools to be eligible for CRA consideration under the investment test. Similarly, REITs may also pool mortgages, mortgage MBSs, and real estate investments (e.g., real property, apartments, office buildings, shopping malls, hotels). Investors purchase shares in REIT pools and defer the taxes. Banks may only invest in mortgage REITs and MBS REITs. Similar to the CRA-MBSs, the REITs must consist of mortgages and MBSs that would be eligible for CRA consideration. The Community Development Trust REIT is an example of a REIT that serves as a CRA-qualified investment for banks. Community Development Financial Institutions and Equity Equivalent Investments The Community Development Financial Institutions (CDFI) Fund was created by the Riegle Community Development Regulatory Improvement Act of 1994 (the Riegle Act; P.L. 103-325 ). The CDFI Fund was established to promote economic development for distressed urban and rural communities. The CDFI Fund, currently located within the U.S. Department of the Treasury, is authorized to certify banks, credit unions, nonprofit loan funds, and (for-profit and nonprofit) venture capital funds as designated CDFIs. In other words, a bank may satisfy the requirements to become a CDFI, but not all CDFIs are banks. The primary focus of institutions with CDFI certification is to serve the financial needs of economically distressed people and places. The designation also makes these institutions eligible to receive financial awards and other assistance from the CDFI Fund. In contrast to non-CDFI banks, some CDFI banks have greater difficulty borrowing funds and then transforming them into loans for riskier, economically distressed consumers. The lack of loan level data for most CDFI banks causes creditors to hesitate in making low-cost, short-term loans to these institutions. Specifically, the lack of information on loan defaults and prepayment rates on CDFI banking assets is likely to result in limited ability to sell these loan originations to secondary loan markets. Consequently, the retention of higher-risk loans, combined with limited access to low-cost, short-term funding, makes CDFI banks more vulnerable to liquidity shortages. Hence, CDFIs rely primarily on funding their loans (assets) with net assets , which are proceeds analogous to the equity of a traditional bank or net worth of a credit union. CDFI net assets are often acquired in the form of awards or grants from the CDFI Fund or for-profit banks. Funding assets with net assets is less expensive for CDFIs than funding with longer-term borrowings. Banks may obtain CRA investment credit consideration by making investments to CDFIs, which provides CDFIs with net assets (equity). Under PWI authority, banks are allowed to make equity investments in specialized financial institutions, such as CDFIs, as long as they are considered by their safety and soundness regulator to be at least adequately capitalized . Furthermore, the final Basel III notification of proposed regulation (NPR) allows for preferential capital treatment for equity investments made under PWI authority, meaning equity investments to designated CDFIs may receive more favorable capital treatment. Consequently, banks often provide funds to CDFIs through equity equivalent investments (EQ2s), which are debt instruments issued by CDFIs with a continuous rolling (indeterminate) maturity. EQ2s, from a bank's perspective, are analogous to holding convertible preferred stock with a regularly scheduled repayment. Hence, banks may view EQ2s as a potentially profitable opportunity to invest in other specialized financial institutions and receive CRA consideration, particularly when the funds are subsequently used by CDFIs to originate loans in the banks' assessment areas. Small Business Investment Companies The Small Business Administration (SBA) was established in 1953 by the Small Business Act of 1953 (P.L. 83-163) to support small businesses' access to capital in a variety of ways. Although issuing loan guarantees for small businesses is a significant component of its operations, the SBA also has the authority to facilitate the equity financing of small business ventures through its Small Business Investment Company (SBIC) program, which was established by the Small Business Investment Act of 1958 (P.L. 85-699). SBICs that are licensed and regulated by the SBA may provide debt and equity financing and, although not a program requirement, educational (management consulting) resources for businesses that meet certain SBA size requirements. Banks may act as limited partners if they choose to provide funds to SBICs, which act as general partners. Banks may establish their own SBICs, jointly establish SBICs (with other banks), or provide funds to existing SBICs. SBICs subsequently use bank funding to invest in the long-term debt and equity securities of small, independent (SBA-eligible) businesses, and banks may receive CRA investment consideration if the activities benefit their assessment areas. Community banks invest in SBICs because of the profit potential as well as the opportunity to establish long-term relationships with business clients during their infancy stages. Banks that are considered by their regulators to be adequately capitalized are allowed to invest in these specialized financial institutions under PWI authority, but the investments still receive risk-based capital treatment. SBIC assets, similar to CDFIs, are illiquid given the difficulty to obtain credit ratings for SBIC investments; thus, they cannot be sold in secondary markets. Because banks risk losing the principal of their equity investments, they are required to perform the proper due diligence associated with prudent underwriting. Tax Credits The low-income housing tax credit (LIHTC) program was created by the Tax Reform Act of 1986 ( P.L. 99-514 ) to encourage the development and rehabilitation of affordable rental housing. Generally speaking, government (federal or state) issued tax credits may be bought and, in many cases, sold like any other financial asset (e.g., stocks and bonds). Owners of tax credits may reduce their tax liabilities either by the amount of the credits or by using the formulas specified on those credits, assuming the owners have participated in the specified activities that the government wants to encourage. For LIHTCs, banks may use a formula to reduce their federal tax liabilities when they provide either credit or equity contributions (grants) for the construction and rehabilitation of affordable housing. If a bank also owns a LIHTC, then a percentage of the equity grant may be tax deductible if the CDFI uses the funds from the grant to finance affordable rental housing. Furthermore, banks may receive consideration for CRA-qualified investment credits. After a domestic corporation or partnership receives designation as a Community Development Entity (CDE) from the CFDI Fund, it may apply for New Markets Tax Credits (NMTCs). Encouraging capital investments in LMI communities is the primary mission of CDEs, and CDFIs and SBICs automatically qualify as CDEs. Only CDEs are eligible to compete for NMTCs, which are allocated by the CDFI Fund via a competitive process. Once awarded an allocation of NMTCs, the CDE must obtain equity investments in exchange for the credits. Then, the equity proceeds raised must either be used to provide loans or technical assistance or deployed in eligible community investment activities. Only for-profit CDEs, however, may provide NMTCs to their investors in exchange for equity investments. Investors making for-profit CDE equity investments can use the NMTCs to reduce their tax liabilities by a certain amount over a period of years. As previously discussed, a bank may receive CRA credit for making equity investments in nonprofit CDEs and for-profit subsidiaries, particularly if the investment occurs within the bank's assessment area. Furthermore, banks may be able to reduce their tax liabilities if they can obtain NMTCs from the CDEs in which their investments were made.
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The Community Reinvestment Act (CRA; P.L. 95-128, 12 U.S.C. §§2901-2908) addresses how banking institutions meet the credit needs of the areas they serve, particularly in low- and moderate-income (LMI) neighborhoods. The federal banking regulatory agencies—the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC)—currently implement the CRA. The regulators issue CRA credits, or points, where banks engage in qualifying activities—such as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entities—that occur with a designated assessment area. These credits are then used to issue each bank a performance rating. The CRA requires these ratings be taken into account when banks apply for charters, branches, mergers, and acquisitions among other things. The CRA, which was enacted in 1977, was subsequently revised in 1989 to require public disclosure of bank CRA ratings to establish a four-tiered system of descriptive performance levels (i.e., Outstanding, Satisfactory, Needs to Improve, or Substantial Noncompliance). In 1995, the CRA examination was customized to account for differences in bank sizes and business models. In 2005, the bank size definitions were revised and indexed to the Consumer Price Index. The 2005 amendments also expanded opportunities for banks to earn CRA credit for public welfare investments (such as providing housing, services, or jobs that primarily benefit LMI individuals). Qualifying activities under the CRA have evolved to include consumer and business lending, community investments, and low-cost services that would benefit LMI areas and entities. Congressional interest in the CRA stems from various perceptions of its effectiveness. Some have argued that, by encouraging lending in LMI neighborhoods, the CRA may also encourage the issuance of higher-risk loans to borrowers likely to have repayment problems (under the presumption that low-income is correlated with lower creditworthiness), which can translate into losses for lenders. Others are concerned that the CRA is not generating sufficient incentives to increase credit availability to qualified LMI borrowers, which may impede economic recovery for some, particularly following the 2007-2009 recession. This report informs the congressional debate concerning the CRA's effectiveness in incentivizing bank lending and investment activity to LMI borrowers. After a discussion of the CRA's origins, it presents the CRA's examination process and bank activities that are eligible for consideration of CRA credits. Next, it discusses the difficulty of determining the CRA's influence on bank behavior. For example, the CRA does not specify the quality and quantity of CRA-qualifying activities, meaning that compliance with the CRA does not require adherence to lending quotas or benchmarks. In the absence of benchmarks, determining the extent to which CRA incentives have influenced LMI credit availability relative to other factors is not straightforward. Banks also face a variety of financial incentives—for example, capital requirements, the prevailing interest rate environment, changes in tax laws, and technological innovations—that influence how much (or how little) they lend to LMI borrowers. Because multiple financial profit incentives and CRA incentives tend to exist simultaneously, it is difficult to determine the extent to which CRA incentives have influenced LMI credit availability relative to other factors.
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In 1956, the Army began the development of a family of air-transportable, armored multi-purpose vehicles intended to provide a lightweight, amphibious armored personnel carrier for armor and mechanized infantry units. Known as the M-113, it entered production in 1960 and saw extensive wartime service in Vietnam. Considered a reliable and versatile vehicle, a number of different variations of the M-113 were produced to fulfill such roles as a command and control vehicle, mortar carrier, and armored ambulance, to name but a few. The Army began replacing the M-113 infantry carrier version in the early 1980s with the M-2 Bradley Infantry Fighting Vehicle, but many non-infantry carrier versions of the M-113 were retained in service. According to the Army The Armored Multi-Purpose Vehicle (AMPV) is the proposed United States Army program for replacement of the M-113 Family of Vehicles (FOV) to mitigate current and future capability gaps in force protection, mobility, reliability, and interoperability by mission role variant within the Heavy Brigade Combat Team (HBCT) [now known as the Armored Brigade Combat Team – ABCT]. The AMPV will have multiple variants tailored to specific mission roles within HBCT. Mission roles are as follows: General Purpose, Medical Evacuation, Medical Treatment, Mortar Carrier, and Mission Command. AMPV is a vehicle integration program. Regarding the decision to replace remaining M-113s, the Army notes the following: The M-113 lacks the force protection and mobility needed to operate as part of combined arms teams within complex operational environments. For example, "commanders will not allow them to leave Forward Operating Bases (FOBs) or enter contested areas without extensive mission protection and route clearance." The use of other vehicles for M-113 mission sets (casualty evacuations, for example) reduces unit combat effectiveness. The majority of the Army's M-113s are found in Armored Brigade Combat Teams (ABCTs), where they comprise 32% of the tracked armored vehicles organic to that organization. The 114 M-113 variants in the ABCT are distributed as follows: In addition to the AMPV requirement in the ABCTs, the Army also planned to procure an additional 1,922 AMPVs to replace M-113s in Echelons Above Brigade (EAB). The Army notes that these AMPVs might have different requirements than the ABCT AMPVs. DOD estimates if the M-113s are replaced by AMPVs at EAB, total program costs could be increased by an additional $6.5 billion. According to the Government Accountability Office (GAO), in March 2012, the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD, AT&L) approved a materiel development decision for AMPV and authorized the Army's entry into the materiel solution analysis phase. The Army completed the AMPV analysis of alternatives (AoA) in July 2012 and proposed a nondevelopmental vehicle (the candidate vehicle will be either an existing vehicle or a modified existing vehicle—not a vehicle that is specially designed and not in current service). Because the AMPV is to be a nondevelopmental vehicle, DOD decided the program would start at Milestone B, Engineering and Manufacturing Development (EMD) Phase and skip the Milestone A, Technology Development Phase. The Army planned for a full and open competition and aimed to award one industry bidder a 42-month EMD contract to develop all five AMPV variants. A draft Request for Proposal (RFP) released in March 2013 stated the EMD contract would be worth $1.46 billion, including $388 million for 29 EMD prototypes for testing between 2014 and 2017 and $1.08 billion for 289 low-rate initial production (LRIP) models between 2018 and 2020. The Army had planned on releasing the formal RFP in June 2013 but instead slipped the date until mid-September 2013, citing a delayed Defense Acquisition Board review attributed in part to Department of Defense civilian furloughs. The EMD contract award was originally planned for late 2014. The Army planned for an average unit manufacturing cost (AUMC) of $1.8 million per vehicle. On November 26, 2013, DOD issued an Acquisition Decision Memorandum (ADM) officially approving the Army's entry into the Milestone B, Engineering and Manufacturing Development (EMD) Phase. The ADM directed the Army to impose an Average Procurement Unit Cost less than or equal to $3.2 million at a production rate of not less than 180 vehicles per year. In addition, operations and sustainment costs were to be less than or equal to $400,000 per vehicle per year. The Army was also directed to down select to a single prime contractor at the completion of Milestone B. Also on November 26, 2013, the Army issued a new draft Request for Proposal (RFP) for the AMPV. This RFP stipulated the Army planned to award a five-year EMD contract in May 2014 worth $458 million to a single contractor for 29 prototypes. While the March 2013 RFP established an Average Unit Manufacturing Cost Ceiling for each AMPV at $1.8 million, this was rescinded to permit vendors greater flexibility. The EMD phase was scheduled to run between FY2015 and FY2019, followed by three years of low-rate initial production (LRIP) starting in 2020. On December 23, 2014, the Army announced it had selected BAE Systems Land and Armaments L.P. as the winner of the EMD contract. The initial award was for 52 months valued at about $382 million. During this period of performance, BAE was to produce 29 vehicles, which would be put through "rigorous developmental and operational testing." In addition, the award provided for an optional low-rate initial production (LRIP) phase award in the future. If this phase is awarded, BAE would produce an additional 289 vehicles for a total contract value of $1.2 billion. The Army, in its announcement, emphasized the BAE EMD contract did not pertain to the 1,922 EAB AMPVs. According to reports, the AMPV successfully completed its Critical Design Review (CDR) on June 23, 2016. Successful completion of a CDR demonstrates the AMPV's design is stable, can be expected to meet established performance standards, and the program can be accomplished within its established budget. On December 15, 2016, BAE delivered the first general purpose AMPV to the Army for testing. The Army plans for six months of contractor tests, followed by one year of government testing and then Limited User Testing. In April 2018, BAE reportedly delivered all 29 AMPVs to the Army for testing. In September 2017, the Army reportedly started reliability, availability, and maintainability (RAM) testing for the AMPV. DOD defines RAM as follows: Reliability is the probability of an item to perform a required function under stated conditions for a specified period of time. Reliability is further divided into mission reliability and logistics reliability. Availability is a measure of the degree to which an item is in an operable state and can be committed at the start of a mission when the mission is called for at an unknown (random) point in time. Availability as measured by the user is a function of how often failures occur and corrective maintenance is required, how often preventive maintenance is performed, how quickly indicated failures can be isolated and repaired, how quickly preventive maintenance tasks can be performed, and how long logistics support delays contribute to down time. Maintainability is the ability of an item to be retained in, or restored to, a specified condition when maintenance is performed by personnel having specified skill levels, using prescribed procedures and resources, at each prescribed level of maintenance and repair. Due to budgetary constraints, the Army reportedly planned to provide upgraded EAB M-113s to a small number of units outside the continental United States and in South Korea and Europe. In August 2017, Army officials reportedly noted "that the amount of time and resources it would take to achieve a pure fleet solution for both ABCTs and EAB units would likely push fielding into FY 2040 and beyond, which is not a suitable course of action." Officials also suggested that upgrading M-113s for EAB use was "an interim solution until we can get to the optimal solution." The Army had planned to issue a request for proposal (RFP) for upgraded M-113s in the summer of 2018. A number of vendors, including General Dynamics Land Systems (GDLS), BAE Systems, and Science Applications International Corporation (SAIC), reportedly planned to respond to the RFP. Reportedly, on May 21, 2018, the Army indefinitely postponed its plans to upgrade EAB M-113s and also put on hold plans to issue an RFP for upgraded M-113s. In October 2018, Army leadership reportedly made the AMPV part of the Army's NGCV program, which is to be overseen by the Army's Futures Command (AFC). Previously, AMPV was overseen by the Program Executive Officer (PEO) for Ground Combat Systems (GCS), but program authority is now shared with the AFC's NGCV Cross Functional Team (CFT). Reportedly, the PEO GCS will retain acquisition legal authorities, but the CFT is to have input on requirements and acquisition schedule. The CFT is also to help prioritize corrective actions needed to address deficiencies identified during testing, as well as identify the resources that will be required. In December 2018, the AMPV program received approval to move into the Production and Deployment phase of acquisition. BAE Systems is to start the production of the first batch of 551 of a total of 2,907 AMPVs, with initial vehicle delivery early in 2020. The Army is expected to field 258 vehicles as part of the European Deterrence Initiative (EDI) in FY2020 and two brigade sets' worth of AMPVs by the end of calendar year 2020. In January 2019, it was reported that the Army had decided to cancel M-113 replacement at echelons above brigade (EAB) and reprogram funding for higher priorities. At this point, it is not readily apparent how the Army plans to address its previous 1,922 EAB AMPV requirement. On March 13, 2019, Army leadership reportedly announced the Army had decided to cut funding over the next five years for 93 programs—including the AMPV—to increase available funding for its new modernization strategy. While the Army has yet to release its final five-year reduction plan, program officials reportedly stated that the AMPV's overall top-line requirement would likely remain unchanged, but the Army would likely slow the per-year procurement rate. An April 28, 2017, DOD IG report noted the Army has effectively managed the AMPV program, in particular keeping it within cost requirements and scheduled timeframes, but also expressed the following concerns: The program might not meet entry requirements for initial production and testing (Milestone C) because the Army has not fully resolved vehicle performance and design demonstration concerns. As a result of the aforementioned performance and design concerns, the AMPV could experience increased costs and schedule delays as a result of addressing the IG's concerns. Because the U.S. Army Deputy Chief of Staff, Programming (G-8) had not revised the procurement quantities to reflect changes to the Army's equipment and force structure requirements, the program's estimated total cost and Average Procurement Unit Cost is not accurate. An April 2018 GAO Weapon Systems Annual Assessment expressed the following concerns: The program has experienced development contract cost growth of over 20 percent above target cost due to continued challenges meeting logistics, performance, and production requirements. However, program officials noted that the government's official cost position for AMPV development—based on the independent cost estimate prepared by the Office of Cost Assessment and Program Evaluation—has not changed as it includes adequate margin to account for the cost growth to date. AMPV remains dependent on other programs—such as the Army's Handheld, Manpack, and Small Form Fit Radios—for its key communication and networking capabilities. However, these programs have experienced their own acquisition challenges delaying their availability for the AMPV program. The program is including a legacy radio platform in its production vehicle design configuration, which will, according to program officials, readily accommodate future networking capabilities provided by these other programs. Given the aforementioned 2017 DOD IG concerns and GAO's 2018 concerns regarding cost growth, difficulties meeting a variety of developmental requirements, and dependencies on other programs that are experiencing developmental challenges, the AMPV program will likely receive significant scrutiny and oversight to insure it remains a cost effective and viable program. DOT&E's FY2018 Annual Report noted the following: Preliminary observations of the Limited Users Test indicate the AMPV meets or exceeds its goal of replacing the M113 family of vehicles (FoV) with a more capable platform. The AMPV demonstrated superior power and mobility over the M113 FoV. The AMPV was able to maintain its position in the formation. The AMPV operational mission availability and reliability were far superior to the M113 FoV. The platform provides potential for growth for power demand. Having common parts among all the variants should improve overall availability. The Mission Command variant facilitates digital mission command. The Medical Treatment and Medical Evacuation variants provide improved patient care and treatment capability with a new capability of conducting treatment on the move. The following deficiencies, if uncorrected, could adversely affect AMPV performance: The driver's and vehicle commander's displays would frequently lock up, and the reboots each took 10 minutes. Due to the physical size and location, the commander's weapons station degraded situational awareness of the vehicle commander. The Joint Battle Command Platform and radios in the Mission Command vehicle cannot be removed from their docking stations within the vehicle. This limits the ability of the command group to share a common operational picture when operating as a Tactical Operations Center. The capability to support analog operations is degraded without the stowage for mapboards and plotting boards. The Medical Evacuation vehicle seat stowage and litter lift are difficult to use. (The program manager has identified a design change to correct this deficiency.) The Mortar Carrier's ammunition storage is not optimized to support the mortar system. There is water leakage from the hatch and the roof leaks, affecting the electronics in all variants and patient care in the medical variants. The preliminary survivability assessment identified minor vehicle design vulnerabilities that the Program Office is addressing with the vendor in order to meet survivability and force protections requirements. The FY2020 budget request includes Research Development, Testing and Evaluation (RDT&E) and Procurement funding requests for the AMPV in both the Base and Overseas Contingency Operations (OCO) budgets, as well as FY2020 requested quantities. The Army notes that FY2020 OCO funding will procure 66 AMPVs to support U.S. European Command's (USEUCOM's) requirement for unit equipment sets to deter potential adversaries and support the European Deterrence Initiative (EDI). As previously noted, the Army's optimal solution would be to replace EAB M-113s with AMPVs, but the Army felt that given current and projected budgetary constraints, only selected EAB units outside the continental United States and in South Korea and Europe would receive AMPVs while the remainder would receive upgraded M-113s as an interim solution. Reportedly, on May 21, 2018, the Army indefinitely postponed its plans to upgrade EAB M-113s and also put on hold plans to issue an RFP for upgraded M-113s. Reportedly in January 2019, the Army decided to cancel M-113 at EAB replacement efforts. Given the frequently changing nature of the Army's plans for addressing the replacement of legacy M-113s at EAB and the decision to cancel M-113 EAB replacement, it is not unreasonable to question if the Army has a clearly defined "way ahead" for addressing M-113s at EAB. Will the Army simply "leave" M-113s at EAB and continue to maintain them, will they replaced by another vehicle, or is the Army still trying to decide on a course of action and a program strategy? DOD's April 2017 IG report, while acknowledging effective management of the AMPV program, also raised fundamental concerns about performance and design, as well as inaccurate procurement quantities, which could adversely impact program costs. GAO's 2018 concerns regarding cost growth, difficulties meeting a variety of developmental requirements, and dependencies on other programs that are experiencing developmental challenges suggest that programmatic issues continue. DOT&E's 2018 findings noted a number of performance concerns as well. Given these concerns, a more in-depth examination of identified AMPV program deficiencies might prove beneficial for DOD and policymakers alike. As previously noted, on March 13, 2019, Army leadership reportedly announced the Army had decided to cut funding over the next five years for 93 programs—including the AMPV—to increase available funding for its new modernization strategy. While the Army is not expected to change its overall AMPV top-line requirement, it could slow the per- year procurement rate. Once the Army has finalized its revised modernization plan, including program cuts, it could be beneficial to provide policymakers with a revised overall AMPV procurement plan, as well as a new fielding plan for units—both Active and Reserves—designated to receive AMPVs.
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The Armored Multi-Purpose Vehicle (AMPV) is the Army's proposed replacement for the Vietnam-era M-113 personnel carriers, which are still in service in a variety of support capacities in Armored Brigade Combat Teams (ABCTs). While M-113s no longer serve as infantry fighting vehicles, five variants of the M-113 are used as command and control vehicles, general purpose vehicles, mortar carriers, and medical treatment and evacuation vehicles. The AMPV is intended to be a nondevelopmental program (candidate vehicles will be either existing vehicles or modified existing vehicles—not vehicles that are specially designed and not currently in service). Some suggest a nondevelopmental vehicle might make it easier for the Army to eventually field this system to the force, as most of the Army's past developmental programs, such as the Ground Combat Vehicle (GCV), the Future Combat System (FCS), the Crusader self-propelled artillery system, and the Comanche helicopter, were cancelled before they could be fully developed and fielded. On November 26, 2013, the Army issued a Request for Proposal (RFP) for the AMPV. This RFP stipulated the Army planned to award a five-year Engineering and Manufacturing Development (EMD) contract in May 2014 worth $458 million to a single contractor for 29 prototypes. While the March 2013 RFP established an Average Unit Manufacturing Cost Ceiling for each AMPV at $1.8 million, this was rescinded to permit vendors greater flexibility. The EMD phase was scheduled to run between FY2015 and FY2019, followed by three years of low-rate initial production (LRIP) starting in 2020. As of 2018, the Army planned to procure 2,936 AMPVs to replace M-113s in ABCTs. The Army also has plans to replace 1,922 M-113s at Echelons Above Brigade (EAB), and the Department of Defense (DOD) estimates that if the M-113s are replaced by AMPVs at EAB, total program costs could be increased by an additional $6.5 billion. While the Army would like a pure fleet of AMPVs, budgetary constraints could preclude this. On December 23, 2014, the Army announced it had selected BAE Systems Land and Armaments L.P. as the winner of the EMD contract. The initial award was for 52 months, valued at about $382 million. In addition, the award provided for an optional low-rate initial production (LRIP) phase. The EMD contract did not include EAB AMPV variants. The AMPV reportedly successfully completed its Critical Design Review (CDR) on June 23, 2016. On December 15, 2016, BAE delivered the first general purpose AMPV to the Army for testing. In September 2017, the Army began AMPV reliability, availability, and maintainability (RAM) testing. Also in 2017, based on budgetary constraints, the Army decided it would upgrade a number of EAB M-113s instead of replacing them with AMPVs. In May 2018, the Army decided to put the EAB M-113 upgrade effort on hold. On March 13, 2019, Army leadership reportedly announced the Army had decided to cut funding over the next five years for 93 programs—including the AMPV—to increase available funding for its new modernization strategy. This cut is not expected to affect the overall AMPV requirement but could slow the AMPV production rate. Other program issues include DOD Inspector General (IG) concerns regarding performance and design concerns, as well as inaccurate procurement quantities, which could result in inaccurate program costs. The Government Accountability Office (GAO) in 2018 expressed concerns regarding cost growth, difficulties meeting a variety of developmental requirements, and dependencies on other programs that are experiencing developmental challenges. Potential issues for Congress include a "way ahead" for upgraded M-113s at EAB, DOD Inspector General (IG) and GAO concerns, and the potential revised AMPV procurement rate.
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F ederal law provides a variety of powers for the President to use in response to crisis, exigency, or emergency circumstances threatening the nation. They are not limited to military or war situations. Some of these authorities, deriving from the Constitution or statutory law, are continuously available to the President with little or no qualification. Others—statutory delegations from Congress—exist on a standby basis and remain dormant until the President formally declares a national emergency. Congress may modify, rescind, or render dormant such delegated emergency authority. Until the crisis of World War I, Presidents utilized emergency powers at their own discretion. Proclamations announced the exercise of exigency authority. During World War I and thereafter, Chief Executives had available to them a growing body of standby emergency authority that became operative upon the issuance of a proclamation declaring a condition of national emergency. Sometimes such proclamations confined the matter of crisis to a specific policy sphere, and sometimes they placed no limitation whatsoever on the pronouncement. These activations of standby emergency authority remained acceptable practice until the era of the Vietnam War. In 1976, Congress curtailed this practice with the passage of the National Emergencies Act. The exercise of emergency powers had long been a concern of the classical political theorists, including the 18 th -century English philosopher John Locke, who had a strong influence upon the Founding Fathers in the United States. A preeminent exponent of a government of laws and not of men, Locke argued that occasions may arise when the executive must exert a broad discretion in meeting special exigencies or "emergencies" for which the legislative power provided no relief or existing law granted no necessary remedy. He did not regard this prerogative as limited to wartime or even to situations of great urgency. It was sufficient if the "public good" might be advanced by its exercise. Emergency powers were first expressed prior to the actual founding of the Republic. Between 1775 and 1781, the Continental Congress passed a series of acts and resolves that count as the first expressions of emergency authority. These instruments dealt almost exclusively with the prosecution of the Revolutionary War. At the Constitutional Convention of 1787, emergency powers, as such, failed to attract much attention during the course of debate over the charter for the new government. It may be argued, however, that the granting of emergency powers by Congress is implicit in its Article I, Section 8, authority to "provide for the common Defense and general Welfare;" the commerce clause; its war, armed forces, and militia powers; and the "necessary and proper" clause empowering it to make such laws as are required to fulfill the executions of "the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof." There is a tradition of constitutional interpretation that has resulted in so-called implied powers, which may be invoked in order to respond to an emergency situation. Locke seems to have anticipated this practice. Furthermore, Presidents have occasionally taken an emergency action that they assumed to be constitutionally permissible. Thus, in the American governmental experience, the exercise of emergency powers has been somewhat dependent upon the Chief Executive's view of the presidential office. Perhaps the President who most clearly articulated a view of his office in conformity with the Lockean position was Theodore Roosevelt. Describing what came to be called the "stewardship" theory of the presidency, Roosevelt wrote of his "insistence upon the theory that the executive power was limited only by specific restrictions and prohibitions appearing in the Constitution or imposed by the Congress under its constitutional powers." It was his view "that every executive officer, and above all every executive officer in high position, was a steward of the people," and he "declined to adopt the view that what was imperatively necessary for the Nation could not be done by the President unless he could find some specific authorization to do it." Indeed, it was Roosevelt's belief that, for the President, "it was not only his right but his duty to do anything that the needs of the Nation demanded unless such action was forbidden by the Constitution or by the laws." Opposed to this view of the presidency was Roosevelt's former Secretary of War, William Howard Taft, his personal choice for and actual successor as Chief Executive. He viewed the presidential office in more limited terms, writing "that the President can exercise no power which cannot be fairly and reasonably traced to some specific grant of power or justly implied and included within such express grant as proper and necessary to its exercise." In his view, such a "specific grant must be either in the Federal Constitution or in an act of Congress passed in pursuance thereof. There is," Taft concluded, "no undefined residuum of power which he can exercise because it seems to him to be in the public interest." Between these two views of the presidency lie various gradations of opinion, resulting in perhaps as many conceptions of the office as there have been holders. One authority has summed up the situation in the following words: Emergency powers are not solely derived from legal sources. The extent of their invocation and use is also contingent upon the personal conception which the incumbent of the Presidential office has of the Presidency and the premises upon which he interprets his legal powers. In the last analysis, the authority of a President is largely determined by the President himself. Apart from the Constitution, but resulting from its prescribed procedures, there are statutory grants of power for emergency conditions. The President is authorized by Congress to take some special or extraordinary action, ostensibly to meet the problems of governing effectively in times of exigency. Sometimes these laws are of only temporary duration. The Economic Stabilization Act of 1970, for example, allowed the President to impose certain wage and price controls for about three years before it expired automatically in 1974. The statute gave the President emergency authority to address a crisis in the nation's economy. Many of these laws are continuously maintained or permanently available for the President's ready use in responding to an emergency. The Defense Production Act, originally adopted in 1950 to prioritize and regulate the manufacture of military material, is an example of this type of statute. There are various standby laws that convey special emergency powers once the President formally declares a national emergency activating them. In 1973, a Senate special committee studying emergency powers published a compilation identifying some 470 provisions of federal law delegating to the executive extraordinary authority in time of national emergency. The vast majority of them are of the standby kind—dormant until activated by the President. However, formal procedures for invoking these authorities, accounting for their use, and regulating their activation and application were established by the National Emergencies Act of 1976. Relying upon constitutional authority or congressional delegations made at various times over the past 230 years, the President of the United States may exercise certain powers in the event that the continued existence of the nation is threatened by crisis, exigency, or emergency circumstances. What is a national emergency? In the simplest understanding of the term, the dictionary defines emergency as "an unforeseen combination of circumstances or the resulting state that calls for immediate action." In the midst of the crisis of the Great Depression, a 1934 Supreme Court majority opinion characterized an emergency in terms of urgency and relative infrequency of occurrence as well as equivalence to a public calamity resulting from fire, flood, or like disaster not reasonably subject to anticipation. An eminent constitutional scholar, the late Edward S. Corwin, explained emergency conditions as being those that "have not attained enough of stability or recurrency to admit of their being dealt with according to rule." During congressional committee hearings on emergency powers in 1973, a political scientist described an emergency in the following terms: "It denotes the existence of conditions of varying nature, intensity and duration, which are perceived to threaten life or well-being beyond tolerable limits." Corwin also indicated it "connotes the existence of conditions suddenly intensifying the degree of existing danger to life or well-being beyond that which is accepted as normal." There are at least four aspects of an emergency condition. The first is its temporal character: An emergency is sudden, unforeseen, and of unknown duration. The second is its potential gravity: An emergency is dangerous and threatening to life and well-being. The third, in terms of governmental role and authority, is the matter of perception: Who discerns this phenomenon? The Constitution may be guiding on this question, but it is not always conclusive. Fourth, there is the element of response: By definition, an emergency requires immediate action but is also unanticipated and, therefore, as Corwin notes, cannot always be "dealt with according to rule." From these simple factors arise the dynamics of national emergency powers. These dynamics can be seen in the history of the exercise of emergency powers. In 1792, residents of western Pennsylvania, Virginia, and the Carolinas began forcefully opposing the collection of a federal excise tax on whiskey. Anticipating rebellious activity, Congress enacted legislation providing for the calling forth of the militia to suppress insurrections and repel invasions. Section 3 of this statute required that a presidential proclamation be issued to warn insurgents to cease their activity. If hostilities persisted, the militia could be dispatched. On August 17, 1794, President Washington issued such a proclamation. The insurgency continued. The President then took command of the forces organized to put down the rebellion. Here was the beginning of a pattern of policy expression and implementation regarding emergency powers. Congress legislated extraordinary or special authority for discretionary use by the President in a time of emergency. In issuing a proclamation, the Chief Executive notified Congress that he was making use of this power and also apprised other affected parties of his emergency action. Over the next 100 years, Congress enacted various permanent and standby laws for responding largely to military, economic, and labor emergencies. During this span of years, however, the exercise of emergency powers by President Abraham Lincoln brought the first great dispute over the authority and discretion of the Chief Executive to engage in emergency actions. By the time of Lincoln's inauguration (March 4, 1861), seven states of the lower South had announced their secession from the Union; the Confederate provisional government had been established (February 4, 1861); Jefferson Davis had been elected (February 9, 1861) and installed as president of the confederacy (February 18, 1861); and an army was being mobilized by the secessionists. Lincoln had a little over two months to consider his course of action. When the new President assumed office, Congress was not in session. For reasons of his own, Lincoln delayed calling a special meeting of the legislature but soon ventured into its constitutionally designated policy sphere. On April 19, he issued a proclamation establishing a blockade on the ports of the secessionist states, "a measure hitherto regarded as contrary to both the Constitution and the law of nations except when the government was embroiled in a declared, foreign war." Congress had not been given an opportunity to consider a declaration of war. The next day, the President ordered the addition of 19 vessels to the navy "for purposes of public defense." A short time later, the blockade was extended to the ports of Virginia and North Carolina. By a proclamation of May 3, Lincoln ordered that the regular army be enlarged by 22,714 men, that navy personnel be increased by 18,000, and that 42,032 volunteers be accommodated for three-year terms of service. The directive antagonized many Representatives and Senators, because Congress is specifically authorized by Article I, Section 8, of the Constitution "to raise and support armies." In his July message to the newly assembled Congress, Lincoln suggested, "These measures, whether strictly legal or not, were ventured upon under what appeared to be a popular and a public necessity, trusting then, as now, that Congress would readily ratify them. It is believed," he wrote, "that nothing has been done beyond the constitutional competency of Congress." Congress subsequently did legislatively authorize, and thereby approve, the President's actions regarding his increasing armed forces personnel and would do the same later concerning some other questionable emergency actions. In the case of Lincoln, the opinion of scholars and experts is that "neither Congress nor the Supreme Court exercised any effective restraint upon the President." The emergency actions of the Chief Executive were either unchallenged or approved by Congress and were either accepted or—because of almost no opportunity to render judgment—went largely without notice by the Supreme Court. The President made a quick response to the emergency at hand, a response that Congress or the courts might have rejected in law but, nonetheless, had been made in fact and with some degree of popular approval. Similar controversy would arise concerning the emergency actions of Presidents Woodrow Wilson and Franklin D. Roosevelt. Both men exercised extensive emergency powers with regard to world hostilities, and Roosevelt also used emergency authority to deal with the Great Depression. Their emergency actions, however, were largely supported by statutory delegations and a high degree of approval on the part of both Congress and the public. During the Wilson and Roosevelt presidencies, a major procedural development occurred in the exercise of emergency powers—use of a proclamation to declare a national emergency and thereby activate all standby statutory provisions delegating authority to the President during a national emergency. The first such national emergency proclamation was issued by President Wilson on February 5, 1917. Promulgated on the authority of a statute establishing the U.S. Shipping Board, the proclamation concerned water transportation policy. It was statutorily terminated, along with a variety of other wartime measures, on March 3, 1921. President Franklin D. Roosevelt issued the next national emergency proclamation some 48 hours after assuming office. Proclaimed March 6, 1933, on the somewhat questionable authority of the Trading with the Enemy Act of 1917, the proclamation declared a "bank holiday" and halted a major class of financial transactions by closing the banks. Congress subsequently gave specific statutory support for the Chief Executive's action with the passage of the Emergency Banking Act on March 9. Upon signing this legislation into law, the President issued a second banking proclamation, based upon the authority of the new law, continuing the bank holiday until it was determined that banking institutions were capable of conducting business in accordance with new banking policy. Next, on September 8, 1939, President Roosevelt promulgated a proclamation of "limited" national emergency, though the qualifying term had no meaningful legal significance. Almost two years later, on May 27, 1941, he issued a proclamation of "unlimited" national emergency. This action, however, did not actually make any important new powers available to the Chief Executive in addition to those activated by the 1939 proclamation. The President's purpose in making the second proclamation was largely to apprise the American people of the worsening conflict in Europe and growing tensions in Asia. These two war-related proclamations of a general condition of national emergency remained operative until 1947, when certain of the provisions of law they had activated were statutorily rescinded. Then, in 1951, Congress terminated the declaration of war against Germany. In the spring of the following year, the Senate ratified the treaty of peace with Japan. Because these actions marked the end of World War II for the United States, legislation was required to keep certain emergency provisions in effect. Initially, the Emergency Powers Interim Continuation Act temporarily maintained this emergency authority. It was subsequently supplanted by the Emergency Powers Continuation Act, which kept selected emergency delegations in force until August 1953. By proclamation in April 1952, President Harry S. Truman terminated the 1939 and 1941 national emergency declarations, leaving operative only those emergency authorities continued by statutory specification. President Truman's 1952 termination, however, specifically exempted a December 1950 proclamation of national emergency he had issued in response to hostilities in Korea. This condition of national emergency would remain in force and unimpaired well into the era of the Vietnam War. Two other proclamations of national emergency would also be promulgated before Congress once again turned its attention to these matters. Faced with a postal strike, President Richard Nixon declared a national emergency in March 1970, thereby gaining permission to use units of the Ready Reserve to assist in moving the mail. President Nixon proclaimed a second national emergency in August 1971 to control the balance of payments flow by terminating temporarily certain trade agreement provisos and imposing supplemental duties on some imported goods. In the years following the conclusion of U.S. armed forces involvement in active military conflict in Korea, occasional expressions of concern were heard in Congress regarding the continued existence of President Truman's 1950 national emergency proclamation long after the conditions prompting its issuance had disappeared. There was some annoyance that the President was retaining extraordinary powers intended only for a time of genuine emergency and a feeling that the Chief Executive was thwarting the legislative intent of Congress by continuously failing to terminate the declared national emergency. Growing public and congressional displeasure with the President's exercise of his war powers and deepening U.S. involvement in hostilities in Vietnam prompted interest in a variety of related matters. For Senator Charles Mathias, interest in the question of emergency powers developed out of U.S. involvement in Vietnam and the incursion into Cambodia. Together with Senator Frank Church, he sought to establish a Senate special committee to study the implications of terminating the 1950 proclamation of national emergency that was being used to prosecute the Vietnam War "to consider problems which might arise as the result of the termination and to consider what administrative or legislative actions might be necessary." Such a panel was initially chartered by S.Res. 304 as the Special Committee on the Termination of the National Emergency in June 1972, but it did not begin operations before the end of the year. With the convening of the 93 rd Congress in 1973, the special committee was approved again with S.Res. 9 . Upon exploring the subject matter of national emergency powers, however, the mission of the special committee became more burdensome. There was not just one proclamation of national emergency in effect but four such instruments, issued in 1933, 1950, 1970, and 1971. The United States was in a condition of national emergency four times over, and with each proclamation, the whole collection of statutorily delegated emergency powers was activated. Consequently, in 1974, with S.Res. 242 , the study panel was rechartered as the Special Committee on National Emergencies and Delegated Emergency Powers to reflect its focus upon matters larger than the 1950 emergency proclamation. Its final mandate was provided by S.Res. 10 in the 94 th Congress, although its termination date was necessarily extended briefly in 1976 by S.Res. 370 . Senators Church and Mathias co-chaired the panel. The Special Committee on National Emergencies and Delegated Emergency Powers produced various studies during its existence. After scrutinizing the U . S . Code and uncodified statutory emergency powers, the panel identified 470 provisions of federal law that delegated extraordinary authority to the executive in time of national emergency. Not all of them required a declaration of national emergency to be operative, but they were, nevertheless, extraordinary grants. The special committee also found that no process existed for automatically terminating the four outstanding national emergency proclamations. Thus, the panel began developing legislation containing a formula for regulating emergency declarations in the future and otherwise adjusting the body of statutorily delegated emergency powers by abolishing some provisions, relegating others to permanent status, and continuing others in a standby capacity. The panel also began preparing a report offering its findings and recommendations regarding the state of national emergency powers in the nation. The special committee, in July 1974, unanimously recommended legislation establishing a procedure for the presidential declaration and congressional regulation of a national emergency. The proposal also modified various statutorily delegated emergency powers. In arriving at this reform measure, the panel consulted with various executive branch agencies regarding the significance of existing emergency statutes, recommendations for legislative action, and views as to the repeal of some provisions of emergency law. This recommended legislation was introduced by Senator Church for himself and others on August 22, 1974, and became S. 3957 . It was reported from the Senate Committee on Government Operations on September 30 without public hearings or amendment. The bill was subsequently discussed on the Senate floor on October 7, when it was amended and passed. Although a version of the reform legislation had been introduced in the House on September 16, becoming H.R. 16668 , the Committee on the Judiciary, to which the measure was referred, did not have an opportunity to consider either that bill or the Senate-adopted version due to the press of other business—chiefly the impeachment of President Nixon and the nomination of Nelson Rockefeller to be Vice President of the United States. Thus, the National Emergencies Act failed to be considered on the House floor before the final adjournment of the 93 rd Congress. With the convening of the next Congress, the proposal was introduced in the House on February 27, 1975, becoming H.R. 3884 , and in the Senate on March 6, becoming S. 977 . House hearings occurred in March and April before the Subcommittee on Administrative Law and Governmental Relations of the Committee on the Judiciary. The bill was subsequently marked up and, on April 15, was reported in amended form to the full committee on a 4-0 vote. On May 21, the Committee on the Judiciary, on a voice vote, reported the bill with technical amendments. During the course of House debate on September 4, there was agreement to both the committee amendments and a floor amendment providing that national emergencies end automatically one year after their declaration unless the President informs Congress and the public of a continuation. The bill was then passed on a 388-5 yea and nay vote and sent to the Senate, where it was referred to the Committee on Government Operations. The Senate Committee on Government Operations held a hearing on H.R. 3884 on February 25, 1976, the bill was subsequently reported on August 26 with one substantive and several technical amendments. The following day, the amended bill was passed and returned to the House. On August 31, the House agreed to the Senate amendments, clearing the proposal for President Gerald Ford's signature on September 14. In its final report, issued in May 1976, the special committee concluded "by reemphasizing that emergency laws and procedures in the United States have been neglected for too long, and that Congress must pass the National Emergencies Act to end a potentially dangerous situation." Other issues identified by the special committee as deserving attention in the future, however, did not fare so well. The panel, for example, was hopeful that standing committees of both houses of Congress would review statutory emergency power provisions within their respective jurisdictions with a view to the continued need for, and possible adjustment of, such authority. Actions in this regard were probably not as ambitious as the special committee expected. A title of the Federal Civil Defense Act of 1950 granting the President or Congress power to declare a civil defense emergency in the event of an attack on the United States occurred or was anticipated expired in June 1974 after the House Committee on Rules failed to report a measure continuing the statute. A provision of emergency law was refined in May 1976. Legislation was enacted granting the President the authority to order certain selected members of an armed services reserve component to active duty without a declaration of war or national emergency. Previously, such an activation of military reserve personnel had been limited to a "time of national emergency declared by the President" or "when otherwise authorized by law." Another refinement of emergency law occurred in 1977 when action was completed on the International Emergency Economic Powers Act (IEEPA). Reform legislation containing this statute modified a provision of the Trading with the Enemy Act of 1917, authorizing the President to regulate the nation's international and domestic finance during periods of declared war or national emergency. The enacted bill limited the President's Trading with the Enemy Act power to regulate the country's finances to times of declared war. In IEEPA, a provision conferred authority on the Chief Executive to exercise controls over international economic transactions in the future during a declared national emergency and established procedures governing the use of this power, including close consultation with Congress when declaring a national emergency to activate IEEPA. Such a declaration would be subject to congressional regulation under the procedures of the National Emergencies Act. Other matters identified in the final report of the special committee for congressional scrutiny included investigation of emergency preparedness efforts conducted by the executive branch, attention to congressional preparations for an emergency and continual review of emergency law, ending open-ended grants of authority to the executive, investigation and institution of stricter controls over delegated powers, and improving the accountability of executive decisionmaking. There is some public record indication that certain of these points, particularly the first and the last, have been addressed in the past two decades by congressional overseers. As enacted, the National Emergencies Act consisted of five titles. The first of these generally returned all standby statutory delegations of emergency power, activated by an outstanding declaration of national emergency, to a dormant state two years after the statute's approval. However, the act did not cancel the 1933, 1950, 1970, and 1971 national emergency proclamations, because the President issued them pursuant to his Article II constitutional authority. Nevertheless, it did render them ineffective by returning to dormancy the statutory authorities they had activated, thereby necessitating a new declaration to activate standby statutory emergency authorities. Title II provided a procedure for future declarations of national emergency by the President and prescribed arrangements for their congressional regulation. The statute established an exclusive means for declaring a national emergency. Emergency declarations were to terminate automatically after one year unless formally continued for another year by the President, but they could be terminated earlier by either the President or Congress. Originally, the prescribed method for congressional termination of a declared national emergency was a concurrent resolution adopted by both houses of Congress. This type of "legislative veto" was effectively invalidated by the Supreme Court in 1983. The National Emergencies Act was amended in 1985 to substitute a joint resolution as the vehicle for rescinding a national emergency declaration. When declaring a national emergency, the President must indicate, according to Title III, the powers and authorities being activated to respond to the exigency at hand. Certain presidential accountability and reporting requirements regarding national emergency declarations were specified in Title IV, and the repeal and continuation of various statutory provisions delegating emergency powers was accomplished in Title V. Since the 1976 enactment of the National Emergencies Act, various national emergencies have been declared pursuant to its provisions. Some were subsequently revoked, while others remain in effect. Table 1 displays the number of national emergencies in effect (some may refer to these as "active") and the number of national emergencies no longer in effect (some may refer to these as "inactive"), by President. Detailed information regarding the 31 national emergencies in effect may be found in Table 2 . Similar information regarding the 22 national emergencies no longer in may be found in Table 3 . The second column in Table 2 and Table 3 identifies the national emergency declaration, which is either an executive order (E.O.) or a presidential proclamation (Proc.). Table 3 includes declared national emergencies that are no longer in effect. The development, exercise, and regulation of emergency powers, from the days of the Continental Congress to the present, reflect at least one highly discernable trend: Those authorities available to the executive in time of national crisis or exigency have, since the time of the Lincoln Administration, come to be increasingly rooted in statutory law. The discretion available to a Civil War President in his exercise of emergency power has been harnessed, to a considerable extent, in the contemporary period. Due to greater reliance upon statutory expression, the range of this authority has come to be more circumscribed, and the options for its use have come to be regulated procedurally through the National Emergencies Act. Since its enactment the National Emergencies Act has not been revisited by congressional overseers. The 1976 report of the Senate Special Committee on National Emergencies suggested that the prospect remains that further improvements and reforms in this policy area might be pursued and perfected. An anomaly in the activation of emergency powers appears to have occurred on September 8, 2005, when President George W. Bush issued a proclamation suspending certain wage requirements of the Davis-Bacon Act in the course of the federal response to the Gulf Coast disaster resulting from Hurricane Katrina. Instead of following the historical pattern of declaring a national emergency to activate the suspension authority, the President set out the following rationale in the proclamation: "I find that the conditions caused by Hurricane Katrina constitute a 'national emergency' within the meaning of section 3147 of title 40, United States Code." A more likely course of action would seemingly have been for the President to declare a national emergency pursuant to the National Emergencies Act and to specify that he was, accordingly, activating the suspension authority. Although the propriety of the President's action in this case might have been ultimately determined in the courts, the proclamation was revoked on November 3, 2005, by a proclamation in which the President cited the National Emergencies Act as authority, in part, for his action.
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The President of the United States has available certain powers that may be exercised in the event that the nation is threatened by crisis, exigency, or emergency circumstances (other than natural disasters, war, or near-war situations). Such powers may be stated explicitly or implied by the Constitution, assumed by the Chief Executive to be permissible constitutionally, or inferred from or specified by statute. Through legislation, Congress has made a great many delegations of authority in this regard over the past 230 years. There are, however, limits and restraints upon the President in his exercise of emergency powers. With the exception of the habeas corpus clause, the Constitution makes no allowance for the suspension of any of its provisions during a national emergency. Disputes over the constitutionality or legality of the exercise of emergency powers are judicially reviewable. Both the judiciary and Congress, as co-equal branches, can restrain the executive regarding emergency powers. So can public opinion. Since 1976, the President has been subject to certain procedural formalities in utilizing some statutorily delegated emergency authority. The National Emergencies Act (50 U.S.C. §§1601-1651) eliminated or modified some statutory grants of emergency authority, required the President to formally declare the existence of a national emergency and to specify what statutory authority activated by the declaration would be used, and provided Congress a means to countermand the President's declaration and the activated authority being sought. The development of this regulatory statute and subsequent declarations of national emergency are reviewed in this report.
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Some time ago, a federal prosecutor referred to the mail and wire fraud statutes as "our Stradivarius, our Colt 45, our Louisville Slugger … and our true love." Not everyone shares the prosecutor's delight. Commentators have argued that the statutes "have long provided prosecutors with a means by which to salvage a modest, but dubious, victory from investigations that essentially proved unfruitful." Federal judges have also expressed concern from time to time, observing that the "mail and wire fraud statutes have 'been invoked to impose criminal penalties upon a staggeringly broad swath of behavior,' creating uncertainty in business negotiations and challenges to due process and federalism." Nevertheless, mail and wire fraud prosecutions have brought to an end schemes that bilked victims of millions, and sometimes billions, of dollars. The federal mail and wire fraud statutes outlaw schemes to defraud that involve the use of mail or wire communications. Both condemn fraudulent conduct that may also come within the reach of other federal criminal statutes. Both may serve as racketeering and money laundering predicate offenses. Both are punishable by imprisonment for not more than 20 years; for not more than 30 years, if the victim is a financial institution or the offense is committed in the context of major disaster or emergency. Both entitle victims to restitution. Both may result in the forfeiture of property. The mail and wire fraud statutes are essentially the same, except for the medium associated with the offense—the mail in the case of mail fraud and wire communication in the case of wire fraud. As a consequence, the interpretation of one is ordinarily considered to apply to the other. In construction of the terms within the two, the courts will frequently abbreviate or adjust their statement of the elements of a violation to focus on the questions at issue before them. As treatment of the individual elements makes clear, however, there seems little dispute that conviction requires the government to prove (1) the use of either mail or wire communications in the foreseeable furtherance, (2) of a scheme and intent to defraud another of either property or honest services, (3) involving a material deception. The wire fraud statute applies to anyone who "transmits or causes to be transmitted by wire, radio, or television communication in interstate or foreign commerce any writings ... for the purpose executing [a] ... scheme or artifice." The mail fraud statute is similarly worded and applies to anyone who "... for the purpose of executing [a] ... scheme or artifice ... places in any post office ... or causes to be delivered by mail ... any ... matter." The statutes require that a mailing or wire communication be in furtherance of a scheme to defraud. The mailing or communication need not be an essential element of the scheme, as long as it "is incident to an essential element of the scheme." A qualifying mailing or communication, standing alone, may be routine, innocent, or even self-defeating, because "[t]he relevant question at all times is whether the mailing is part of the execution of the scheme as conceived by the perpetrator at the time, regardless of whether the mailing later, through hindsight, may prove to have been counterproductive." The element may be satisfied by mailings or communications "designed to lull the victim into a false sense of security, postpone inquiries or complaints, or make the transaction less suspect." The element may also be satisfied by mailings or wire communications used to obtain the property that is the object of the fraud. A defendant need not personally have mailed or wired a communication; it is enough that he "caused" a mailing or transmission of a wire communication in the sense that the mailing or transmission was the reasonable foreseeable consequence of his intended scheme. The mail and wire fraud statutes "both prohibit, in pertinent part, 'any scheme or artifice to defraud[,]' or to obtain money or property 'by means of false or fraudulent pretenses, representations, or promises," or to deprive another of the right to honest services by such means. From the beginning, Congress intended to reach a wide range of schemes to defraud, and has expanded the concept whenever doubts arose. It added the second prong—obtaining money or property by false pretenses, representations, or promises—after defendants had suggested that the term "scheme to defraud" covered false pretenses concerning present conditions but not representations or promises of future conditions. More recently, it added 18 U.S.C. § 1346 to make it clear the term "scheme to defraud" encompassed schemes to defraud another of the right to honest services. Even before that adornment, the words were understood to "refer 'to wronging one in his property rights by dishonest methods or schemes,' and 'usually signify the deprivation of something of value by trick, deceit, chicane or overreaching.'" As a general rule, the crime is done when the scheme is hatched and an attendant mailing or interstate phone call or email has occurred. Thus, the statutes are said to condemn a scheme to defraud regardless of its success. It is not uncommon for the courts to declare that to demonstrate a scheme to defraud the government needs to show that the defendant's "communications were reasonably calculated to deceive persons of ordinary prudence and comprehension." Even a casual reading, however, might suggest that the statutes also cover a scheme specifically designed to deceive a naïve victim. Nevertheless, the courts have long acknowledged the possibility of a "puffing" defense, and there may be some question whether the statutes reach those schemes designed to deceive the gullible though they could not ensnare the reasonably prudent. In any event, the question may be more clearly presented in the context of the defendant's intent and the materiality of the deception, a focus on the scheme's creator rather than its victim. Defrauding or to Obtain Money or Property . The mail and wire fraud statutes speak of schemes to defraud or to obtain money or property by means of false or fraudulent pretenses. The Supreme Court has said that the phrase "to defraud" and the phrase "to obtain money or property" do not represent separate crimes, but instead the phrase "obtain money or property" describes what constitutes a scheme to defraud. In later look-alike offenses, Congress specifically numerated the two phrases. The bank fraud statute, for example, applies to "whoever knowingly executes … a scheme or artifice – (1) to defraud a financial institution; or (2) to obtain any of the money, funds, credits, assets, securities, or other property owned by … a financial institution, by means of false or fraudulent pretenses …" It left the mail and wire fraud statutes, however, unchanged. The mail and wire fraud statutes clearly protect against deprivations of tangible property. They also protect certain intangible property rights, but only those that have value in the hands of the victim of a scheme. "To determine whether a particular interest is property for purposes of the fraud statutes, [courts] look to whether the law traditionally has recognized and enforced it as a property right." Neither the mail nor the wire fraud statute exhibits an explicit reference to materiality. Yet materiality is an element of each offense, because at the time of the statutes' enactment, the word "defraud" was understood to "require[] a misrepresentation or concealment of [a] material fact." Thus, other than in an honest services context, a "scheme to defraud" for mail or wire fraud purposes must involve a material misrepresentation of some kind. "A misrepresentation is material if it is capable of influencing the intended victim." Again, other than in the case of honest services, "'intent to defraud' requires an intent to (1) deceive, and (2) cause some harm to result from the deceit. A defendant acts with the intent to deceive when he acts knowingly with the specific intent to deceive for the purpose of causing pecuniary loss to another or bringing about some financial gain to himself." A defendant has a complete defense if he believes the deceptive statements or promises to be true or otherwise acts under circumstances that belie an intent to defraud. Yet, a defendant has no defense if he blinds himself to the truth. Nor is it a defense if he intends to deceive but feels his victim will ultimately profit or be unharmed. Some time ago, the Supreme Court held in McNally v. United States that the protection of the mail fraud statute, and by implication the protection of the wire fraud statute, did not extend to "the intangible right of the citizenry to good government." Soon after McNally , Congress enlarged the mail and wire fraud protection to include the intangible right to honest services, by defining the "term 'scheme or artifice to defraud' [to] include[s] a scheme or artifice to deprive another of the intangible right to honest services." Lest the expanded definition be found unconstitutionally vague, the Court in Skilling v. United States limited its application to cases of bribery or kickbacks. The Court in Skilling supplied only a general description of the bribery and kickbacks condemned in the honest-services statute. Subsequent lower federal courts have often looked to the general federal law relating to bribery and kickbacks for the substantive elements of honest services bribery. In this context, bribery requires "a quid pro quo—a specific intent to give … something of value in exchange for an official act." And an "official act" means no more than an officer's formal exercise of governmental power in the form of a "decision or action on a 'question, matter, cause, suit, proceeding or controversy'" before him. The definition of the word "kickback" quoted by the Court in Skilling has since been reassigned, and the courts have cited the dictionary definition on occasion. Except for the elements of a scheme to defraud in the form of a bribe and a kickback, honest services fraud, as an adjunct of the mail and wire fraud statutes, draws its elements and the sanctions that attend the offense from the mail and wire fraud statutes. Attempting or conspiring to commit mail or wire fraud or aiding and abetting the commission of those offenses carries the same penalties as the underlying offense. "In order to aid and abet another to commit a crime it is necessary that a defendant in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his action to make it succeed." "Conspiracy to commit wire fraud under 18 U.S.C. § 1349 requires a jury to find that (1) two or more persons agreed to commit wire fraud and (2) the defendant willfully joined the conspiracy with the intent to further its unlawful purpose." As a general rule, a conspirator is liable for any other offenses that a co-conspirator commits in the foreseeable furtherance of the conspiracy. Such liability, however, extends only until the objectives of the conspiracy have been accomplished or the defendant has withdrawn from the conspiracy. Where attempt has been made a separate offense, as it has for mail and wire fraud, conviction ordinarily requires that the defendant commit a substantial step toward the completion of the underlying offense with the intent to commit it. It does not, however, require the attempt to have been successful. Unlike conspiracy, a defendant may not be convicted of both the substantive offense and the lesser included crime of attempt to commit it. Mail and wire fraud are each punishable by imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for organizations), or fine of not more than $1 million and imprisonment for not more than 30 years if the victim is a financial institution or the offense was committed in relation to a natural disaster. It is also subject to a mandatory minimum two-year term of imprisonment if identify theft is used during and in furtherance of the fraud. Conviction may also result in (1) probation, (2) a term of supervised release, (3) a special assessment, (4) a restitution order, and/or (5) a forfeiture order. Supervised Release and Special Assessments . Supervised release is a form of parole-like supervision imposed after a term of imprisonment has been served. Although imposition of a term of supervised release is discretionary in mail and wire fraud cases, the Sentencing Guidelines recommend its imposition in all felony cases. The maximum supervised release term for wire and mail fraud generally is three years—five years when the defendant is convicted of the mail or wire fraud against a financial institution that carries a 30-year maximum term of imprisonment. Release will be subject to a number of conditions, violation of which may result in a return to prison for not more than two years (not more than three years if the original crime of conviction carried a 30-year maximum). There are three mandatory conditions: (1) commit no new crimes; (2) allow a DNA sample to be taken; and (3) submit to periodic drug testing. The court may suspend the drug testing condition, although it is under no obligation to do so even though the defendant has no history of drug abuse and drug abuse played no role in the offense. Most courts will impose a standard series of conditions in addition to the mandatory condition of supervised release. The Sentencing Guidelines recommend that these include the payment of any fines, restitution, and special assessments that remain unsatisfied. Defendants convicted of mail or wire fraud must pay a special assessment of $100. Restitution . Restitution is ordinarily required of those convicted of mail or wire fraud. The victims entitled to restitution include those directly and proximately harmed by the defendant's crime of conviction, and "in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity," like mail and wire fraud, "any person directly harmed by the defendant's conduct in the course of the scheme, conspiracy, or pattern." Forfeiture . Property that constitutes the proceeds of mail or wire fraud is subject to confiscation by the United States. It may be confiscated pursuant to either civil forfeiture or criminal forfeiture procedures. Civil forfeiture proceedings are conducted that treat the forfeitable property as the defendant. Criminal forfeiture proceedings are conducted as part of the criminal prosecution of the property owner. The mail and wire fraud statutes essentially outlaw dishonesty. Due to their breadth, misconduct that constitutes mail or wire fraud may constitute a violation of one or more other federal criminal statutes as well. This overlap occurs perhaps most often with respect to (1) crimes for which mail or wire fraud are elements ("predicate offenses") of another offense; (2) fraud proscribed under jurisdictional circumstances other than mail or wire use; and (3) honest services fraud in the form of bribery or kickbacks. Some federal crimes have as an element the commission of some other federal offense. The money laundering statute, for example, outlaws laundering the proceeds of various predicate offenses. The racketeering statute outlaws the commission of a pattern of predicate offenses to operate a racketeering enterprise. Mail and wire fraud are predicate racketeering and money laundering predicate offenses. RICO . The Racketeer Influenced and Corrupt Organizations (RICO) provisions outlaw acquiring or conducting the affairs of an enterprise, engaged in or whose activities affect interstate commerce, through loan sharking or the patterned commission of various other predicate offenses. The racketeering-conduct and conspiracy-to-engage-in-racketeering-conduct appear to be the RICO offenses most often built on wire or mail fraud violations. The elements of the RICO conduct offense are (1) conducting the affairs; (2) of an enterprise; (3) engaged in activities in or that impact interstate or foreign commerce; (4) through a pattern; (5) of racketeering activity. "Racketeering activity" means, among other things, any act that is indictable under either the mail or wire fraud statutes. As for pattern, a RICO pattern "requires at least two acts of racketeering activity. The racketeering predicates may establish a pattern if they [were] related and … amounted to, or threatened the likelihood of, continued criminal activity.'" The pattern of predicate offenses must be used by someone employed by or associated with a qualified enterprise to conduct or participate in its activities. "Congress did not intend to extend RICO liability … beyond those who participated in the operation and management of an enterprise through a pattern of racketeering activity." Nevertheless, "liability under § 1962(c) is not limited to upper management … An enterprise is operated not just by upper management but also by lower rung participants." The enterprise may be either any group of individuals, any legal entity, or any group "associated in fact." "Nevertheless, 'an association-in-fact enterprise must have at least three structural features: a purpose, relationships among those associated with the enterprise and longevity sufficient to permit those associates to pursue the enterprise's purpose.'" Moreover, qualified enterprises are only those that "engaged in, or the activities of which affect, interstate or foreign commerce." Penalties : Imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for organizations). Money Laundering . Mail and wire fraud are both money laundering predicate offenses by virtue of their status as RICO predicates. The most commonly prosecuted federal money laundering statute, 18 U.S.C. §1956, outlaws, among other things, knowingly engaging in a financial transaction involving the proceeds generated by a "specified unlawful activity" (a predicate offense) for the purpose (1) of laundering the proceeds (i.e., concealing their source or ownership), or (2) of promoting further predicating offenses. To establish the concealment offense, the government must establish that "(1) [the] defendant conducted, or attempted to conduct a financial transaction which in any way or degree affected interstate commerce or foreign commerce; (2) the financial transaction involved proceeds of illegal activity; (3) [the] defendant knew the property represented proceeds of some form of unlawful activity, [such as mail or wire fraud]; and (4) [the] defendant conducted or attempted to conduct the financial transaction knowing the transaction was designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds of specified unlawful activity." To prove the promotional offense, "the Government must show that the defendant: (1) conducted or attempted to conduct a financial transaction; (2) which the defendant then knew involved the proceeds of unlawful activity; (3) with the intent to promote or further unlawful activity." Nothing in either provision suggests that the defendant must be shown to have committed the predicate offense. Moreover, simply establishing that the defendant spent or deposited the proceeds of the predicate offense is not enough without proof of an intent to promote or conceal. Penalties : Imprisonment for not more than 20 years and a fine of not more than $500,000. Merely depositing the proceeds of a money laundering predicate offense does not alone constitute a violation of Section 1956. It is enough for a violation of 18 U.S.C. § 1957, however, if more than $10,000 is involved. Section 1957 uses Section 1956's definition of specified unlawful activities. Thus, mail and wire fraud violations may serve as the basis for the prosecution under Section 1957. "Section 1957 differs from Section 1956 in two critical respects: It requires that the property have a value greater than $10,000, but it does not require that the defendant know of [the] design to conceal [or promote] aspects of the transaction or that anyone have such a design." Penalties: Imprisonment for not more than 10 years and a fine of not more than $250,000 (not more than $500,000) for organizations. This category includes the offenses that were made federal crimes because they involve fraud against the United States or because they are other frauds that share elements with the mail and wire fraud. The most prominent are the proscriptions against defrauding the United States by the submission of false claims, conspiracy to defraud the United States, and material false statements in matters within the jurisdiction of the United States. Bank fraud, health care fraud, securities and commodities fraud, and fraud in foreign labor contracting are all Chapter 63 companions of mail and wire fraud. Defrauding the United States — False Claims . Section 287 outlaws the knowing submission of a false claim against the United States. "To prove a false claim, the government must prove that (1) [the defendant] 'made and presented' to the government a claim, (2) 'the claim was false, fictitious, or fraudulent,' (3) [the defendant] knew the claim was false, fictitious, or fraudulent, and (4) 'the claim was material' to the government." Penalti es : Imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). Conspiracy to Defraud the U nited S tates . The general conspiracy statute has two parts. It outlaws conspiracies to violate the laws of the United States. More relevant here, it also outlaws conspiracies to defraud the United States. "To convict on a charge under the 'defraud' clause, the government must show that the defendant (1) entered into an agreement (2) to obstruct a lawful government function (3) by deceitful or dishonest means and (4) committed at least one overt act in furtherance of the conspiracy." Thus, the "fraud covered by the statute reaches any conspiracy for the purpose of impairing, obstructing or defeating the lawful functions of any department of the Government" by "deceit, craft or trickery, or at least by means that are dishonest." Unlike mail and wire fraud, the government need not show that the scheme was designed to deprive another of money, property, or honest services; it is enough to show that the scheme is designed to obstruct governmental functions. Penalties : Imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). False Statements . Section 1001 outlaws knowingly and willfully making a material false statement on a matter within the jurisdiction of the executive, legislative, or judicial branch of the federal government. A matter is material for purposes of Section 1001 when "it has a natural tendency to influence, or is capable of influencing, the decision of" the individual or entity to whom it is addressed. A matter is within the jurisdiction of a federal entity "when it has the power to exercise authority in a particular matter" and federal jurisdiction "may exist when false statements [are] made to state or local government agencies receiving federal support or subject to federal regulation." Penalties : Imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for organizations). Fraud Elsewhere in Chapter 63. Chapter 63 contains four other fraud proscriptions in addition to mail and wire fraud: bank fraud, health care fraud, securities and commodities fraud, and fraud in foreign labor contracting. Each relies on a jurisdictional base other than use of the mail or wire communications. Bank Fraud . The bank fraud statute outlaws (1) schemes to defraud a federally insured financial institution, and (2) schemes to falsely obtain property from such an institution. To establish the bank-property scheme to defraud offense, "the Government must prove: (1) the defendant knowingly executed or attempted to execute a scheme or artifice to defraud a financial institution; (2) the defendant did so with the intent to defraud a financial institution; and (3) the financial institution was federally insured." As for the bank-custody offense, "the government must prove (1) that a scheme existed to obtain moneys, funds, or credit in the custody of a federally-insured bank by fraud; (2) that the defendant participated in the scheme by means of material false pretenses, representations, or promises; and (3) that the defendant acted knowingly." Penalties : Imprisonment for not more than 30 years and a fine of not more than $1 million. Health Care Fraud . The health care fraud provision follows the pattern of other Chapter 63 offenses. It condemns schemes to defraud. The schemes it proscribes include honest services fraud in the form of bribery and kickbacks. Attempts and conspiracies to violate its prohibitions carry the same penalties as the complete offense it describes. It is often prosecuted along with other related offenses. Parsed to its elements, the section declares, "[a] Whoever [b] knowingly and willfully [c] executes or attempts to execute [d] a scheme or artifice (1) to defraud any health care benefit program, or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property owned by, or under the custody or control of, any health care benefit program [e] in connection with the delivery of or payment for health care benefits, items, or services shall be …" Penalties : A fine of not more than $250,000 (not more than $500,000 for organizations) and (1) if death results, imprisonment for life or any term of years; (2) if serious bodily injury results, imprisonment for 20 years; (3) otherwise, imprisonment for not more than 10 years. Securities and Commodities Fraud . Section 1348, the securities and commodities fraud prohibition, continues the progression of separating its defrauding feature from its obtaining-property feature. The elements of defrauding offense "are (1) fraudulent intent, (2) a scheme or artifice to defraud, and (3) a nexus with a security." To prove a violation of Section 1348(2), the government must establish that the defendant (1) executed, or attempted to execute, a scheme or artifice; (2) with fraudulent intent; (3) in order to obtain money or property; (4) by material false or fraudulent pretenses, representations, or promises. Penalties : Imprisonment for not more than 25 years and fines of not more than $250,000 (not more than $500,000 for organizations). Fraud in Foreign Labor Contracting . "The substantive offense of fraud in foreign labor contracting [under 18 U.S.C. § 1351] occurs when someone: (1) recruits, solicits, or hires a person outside the United States, or causes another person to do so, or attempts to do so; (2) does so by means of materially false or fraudulent pretenses, representations or promises regarding that employment; and (3) acts knowingly and with intent to defraud." The offense occurs outside the United States when related to a federal contract or U.S. presence abroad. Penalties : Imprisonment for not more than five years and a fine of not more than $250,000 (not more than $500,000 for an organization). After the Supreme Court's 2010 decision in Skillin g v. United States , honest services mail and wire fraud consists of bribery and kickback schemes furthered by use of the mail or wire communications. Mail and wire fraud aside, the principal bribery and kickback statutes include 18 U.S.C. §§ 201(b)(1) (bribery of federal officials), 666 (bribery relating to federal programs), 1951 (extortion under color of official right); 15 U.S.C §§ 78dd-1 to 78dd-3 (foreign corrupt practices); and 42 U.S.C. § 1320a-7b (Medicare/Medicaid anti-kickback). Bribery of Federal Officials . Conviction for violation of Section 201(b)(1) "requires a showing that something of value was corruptly ... offered or promised to a public official ... or corruptly ... sought ... or agreed to be received by a public official with intent ... to influence any official act ... or in return for 'being influenced in the performance of any official act." The hallmark of the offense is a corrupt quid pro quo, "a specific intent to give or receive something of value in exchange for an official act." The public officials covered include federal officers and employees, those of the District of Columbia, and those who perform tasks for or on behalf of the United States or any of its departments or agencies. The official acts that constitute the objective of the corrupt bargain include any decision or action relating to any matter coming before an individual in his official capacity. Penalti es : Imprisonment for up to 15 years, a fine of up to $250,000 (up to $500,000 for an organization). Bribery and Fraud Related to Federal Programs . Section 666 outlaws both (1) fraud and (2) bribery by the faithless agents of state, local, tribal or private entities—that receive more than $10,000 in federal benefits—in relation to a transaction of $5,000 or more. "A violation of Section 666(a)(1)(A) requires proof of five elements. The government must prove that: (1) a defendant was an agent of an organization, government, or agency; (2) in a one-year period that organization, government, or agency received federal benefits in excess of $10,000; (3) a defendant … obtained by fraud … ; (4) … property owned by, or in the care, custody, or control of, the organization, government, or entity; and (5) the value of that property was at least $5,000." "A person is guilty under § 666[(a)(1)(B)] if he, being an agent of an organization, government, or governmental agency that receives federal-program funds, corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more." Penalties : Imprisonment for not more than 10 years and a fine of not more than $250,000 (not more than $500,000 for organizations). Hobbs Act . The Hobbs Act, 18 U.S.C. § 1951, outlaws obtaining the property of another under "color of official right," in a manner that has an effect on interstate commerce. Conviction requires the government to prove that the defendant "(1) was a government official; (2) who accepted property to which she was not entitled; (3) knowing that she was not entitled to the property; and (4) knowing that the payment was given in return for officials acts: (5) which had at least a de minimis effect on commerce." Conviction does not require that the public official sought or induced payment: "the government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts." Penalties : Imprisonment for not more than 20 years and a fine of not more than $250,000 (not more than $500,000 for an organization). Foreign Corrupt Practices . The bribery provisions of the Foreign Corrupt Practices Act (FCPA) are three: 15 U.S.C. §§ 78dd-1(trade practices by issuers), 78dd-2 (trade practices by domestic concerns), and 78dd-3 (trade practices by others within the United States). Other than the class of potential defendants, the elements of the three are comparable. They "make[] it a crime to: (1) willfully; (2) make use of the mail or any means or instrumentality of interstate commerce; (3) corruptly; (4) in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to; (5) any foreign official; (6) for purposes of [either] influencing any act or decision of such foreign official in his official capacity [or] inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official [or] securing any improper advantage; (7) in order to assist such [corporation] in obtaining or retaining business for or with, or directing business to, any person." None of the three proscriptions apply to payments "to expedite or to secure the performance of a routine governmental action," and each affords defendants an affirmative defense for payments that are lawful under the applicable foreign law or regulation. Penalties : Imprisonment for not more than five years and a fine of not more than $100,000 (not more than $2 million for organizations). Medicare Kickbacks . The Medicare/Medicaid kickback prohibition in 42 U.S.C. 1320a-7b(b) outlaws "knowingly and willfully [offering or paying], soliciting [or] receiving, any remuneration (including any kickback) ... (A) to induce the referral of [, or (B) the purchase with respect to] Medicare [or] Medicaid beneficiaries ... any item or service for which payment may be made in whole or in part under the Medicare [or] Medicaid programs...." Penalties : Imprisonment for not more than five years and a fine of not more than $25,000.
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The mail and wire fraud statutes are exceptionally broad. Their scope has occasionally given the courts pause. Nevertheless, prosecutions in their name have brought to an end schemes that have bilked victims out of millions, and sometimes billions, of dollars. The statutes proscribe (1) causing the use of the mail or wire communications, including email; (2) in conjunction with a scheme to intentionally defraud another of money or property; (3) by means of a material deception. The offenses, along with attempts or conspiracies to commit them, carry a term of imprisonment of up to 30 years in some cases, followed by a term of supervised release. Offenders also face the prospect of fines, orders to make restitution, and forfeiture of their property. The mail and wire fraud statutes overlap with a surprising number of other federal criminal statutes. Conduct that supports a prosecution under the mail or wire fraud statutes will often support prosecution under one or more other criminal provision(s). These companion offenses include (1) those that use mail or wire fraud as an element of a separate offense, like racketeering or money laundering; (2) those that condemn fraud on some jurisdictional basis other than use of the mail or wire communications, like those that outlaw defrauding the federal government or federally insured banks; and (3) those that proscribe other deprivations of honest services (i.e., bribery and kickbacks), like the statutes that ban bribery of federal officials or in connection with federal programs. Among the crimes for which mail or wire fraud may serve as an element, RICO (Racketeer Influenced and Corrupt Organizations Act) outlaws employing the patterned commission of predicate offenses to conduct the affairs of an enterprise that impacts commerce. Money laundering consists of transactions involving the proceeds of a predicate offense in order to launder them or to promote further predicate offenses. The statutes that prohibit fraud in some form or another are the most diverse of the mail and wire fraud companions. Congress modeled some after the mail and wire fraud statutes, incorporating elements of a scheme to defraud or obtain property by false pretenses into statutes that outlaw bank fraud, health care fraud, securities fraud, and foreign labor contracting fraud. Congress designed others to protect the public fisc by proscribing false claims against the United States, conspiracies to defraud the United States by obstructing its functions, and false statements in matters within the jurisdiction of the United States and its departments and agencies. Federal bribery and kickback statutes populate the third class of wire and mail fraud companions. One provision bans offering or accepting a thing of value in exchange for the performance or forbearance of a federal official act. Another condemns bribery of faithless agents in connection with federally funded programs and activities. A third, the Hobbs Act, outlaws bribery as a form of extortion under the color of official right. The fines, prison sentences, and other consequences that follow conviction for wire and mail fraud companions vary considerably, with fines from not more than $25,000 to not more than $2 million and prison terms from not more than five years to life.
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Since the late 1700s, Congress has expressed public gratitude to individuals and groups by awarding medals and other similar decorations. The first Congressional Gold Medals were issued by the Continental Congress. Since that time, Congress has awarded gold medals to express public gratitude for distinguished contributions, dramatize the virtues of patriotism, and perpetuate the remembrance of great events. This tradition of authorizing individually struck gold medals bearing the portraits or actions of honorees is rich with history. Although Congress has approved legislation stipulating specific requirements for numerous other awards and decorations, there are no permanent statutory provisions specifically relating to the creation of Congressional Gold Medals. When such an award has been deemed appropriate, Congress has, by special action, provided for the creation of a personalized medal to be given in its name. The first Congressional Gold Medals were issued by the Continental Congress. As initially conceived, Congressional Gold Medals were awards "imbued with the conviction that only the very highest achievements [were] entitled to such a distinction, and that the value of a reward is enhanced by its rarity!" At that time, the Continental Congress concluded there was no better way to honor "and preserve the memory of illustrious characters and splendid events than medals—whether we take into consideration the imperishable nature of the substance whence they are formed, the facility of multiplying copies, or the practice of depositing them in the cabinets of the curious." The first gold medals were struck in Paris under the direction of Colonel David Humphrey. Following a long-standing historical practice, Congress commissioned gold medals as tributes for what were considered to be the most distinguished achievements. Silver and bronze medals, and ceremonial swords, were awarded for less eminent, but still notable, accomplishments. However, only the gold medal has been continuously awarded to the present day. The first Congressional Gold Medal was authorized on March 25, 1776, for George Washington, then commander of the Continental Army, for his "wise and spirited conduct" in bringing about British evacuation of Boston. During the next 12 years, the Continental Congress authorized an additional six gold medals for Revolutionary military leaders. Table 1 lists the Congressional Gold Medals issued by the Continental Congress, the year, the awardee, and the reason the medal was authorized. The gold medal conferred upon Major Henry "Light Horse Harry" Lee for his "remarkable prudence" and "bravery" during the surprise raid of Paulus Hook, NJ, was the first to be struck in the United States. Following the ratification of the Constitution, the first two Congressional Gold Medals were given in 1800 to Captain Thomas Truxtun for his gallant effort during the action between the U.S. frigate Constellation and the French ship La Vengeance and in 1805 to Commodore Edward Preble for gallantry and good conduct during the War with Tripoli. After those medals were awarded, Congress issued gold medals primarily for military achievements in the War of 1812 and the Mexican War. All told, 27 gold medals were awarded for the War of 1812, and a series of medals were awarded for expeditions led by Major General Zachary Taylor and Major General Winfield Scott in the Mexican War. General Taylor received three Congressional Gold Medals, while General Scott received one. In 1854, Congress began to broaden the scope of activities that merited a Congressional Gold Medal. This change was prompted by Commander Duncan N. Ingraham of the USS St. Louis 's rescue of Martin Koszta from illegal seizure and imprisonment about the Austrian war-brig Hussar . Subsequently, gold medals were issued to several individuals recognized for nonmilitary heroic activities or their work in specific fields. For example, in 1864 Cornelius Vanderbilt was honored for donating a steamship to the United States; in 1867 Cyrus W. Field was praised for his work in the laying of the transatlantic cable; and Private George F. Robinson was awarded for saving Secretary of State William H. Seward from an assassination attempt. At this time, Congress also established the Medal of Honor as a military award and increasingly focused the Congressional Gold Medal as an award for individuals and events. In the 20 th and 21 st centuries, Congress continued to broaden the scope of Congressional Gold Medals to include recognition of excellence in such varied fields as the arts, athletics, aviation, diplomacy, entertainment, exploration, medicine, politics, religion, and science. Several of the following individuals were the first in their specialties to be awarded gold medals: Composer George M. Cohan (1936) was the first entertainer to receive a gold medal, for his patriotic songs "Over There" and "A Grand Old Flag." Wilbur and Orville Wright (1909) were the first aeronautical or space pioneers to receive a gold medal, for their achievements in demonstrating to the world the potential of aerial navigation. Lincoln Ellsworth (1926) was the first explorer honored, for his polar flight in 1925 and transpolar flight in 1926. Major Walter Reed and his associates (1928) were the first scientists honored, for discovering the cause and means of transmission of yellow fever in 1921. Vice President Alben W. Barkley (1949) was the first political honoree. In the late 20 th and early 21 st centuries, numerous other individuals have been honored for a variety of contributions including civil rights activism and humanitarian contributions. For a complete list of Congressional Gold Medal recipients since 1776, see the Appendix . Once a Congressional Gold Medal bill is introduced, it is typically referred to the House Committee on Financial Services or the Senate Committee on Banking, Housing, and Urban Affairs. The process for considering legislation varies between the House and Senate. In the House, there are currently no chamber or committee rules regarding the procedures for gold medal bills. In some past Congresses, the House Financial Services Committee had adopted a committee rule that prohibited its Domestic Monetary Policy and Technology Subcommittee from holding a hearing on commemorative medal legislation—including Congressional Gold Medals—"unless the legislation is cosponsored by at least two-thirds of the members of the House." Informal practices regarding cosponosrship requirements, however, may still exist. In the Senate, the Banking, Housing, and Urban Affairs Committee in the 116 th Congress requires that at least 67 Senators cosponsor any Congressional Gold Medal bill before being considered by the committee. This committee rule presumably does not formally preclude committee consideration of a House bill referred to it. The committee rule also does not prevent the Senate from considering or passing gold medal legislation. Referred bills may be brought to the floor without committee consideration; in other cases, a bill may avoid being referred to committee at all. In current practice, many enacted gold medal bills receive no formal committee consideration. Rather, the Senate often discharges the committee of the bill by unanimous consent; however, it appears that this discharge practice only occurs after the requisite number of cosponsors sign on to a Senate bill. Although Congress has approved legislation stipulating requirements for numerous other awards and decorations, there are no permanent statutory provisions specifically relating to the creation of Congressional Gold Medals. When a Congressional Gold Medal has been deemed appropriate, Congress has, by legislative action, provided for the creation of a medal on an ad hoc basis. Additionally, there is no statutory limit on the number of Congressional Gold Medals that may be struck in a given year. Congressional Gold Medal legislation generally has certain features, including findings that summarize the subject's history and importance; specifications for awarding the medal; instructions, if any, for the medal's design and striking; permission to mint and sell duplicates; and certification that medals are minted pursuant to existing requirements for national medals (5 U.S.C. §5111). Congressional Gold Medal legislation typically includes a section of findings. These often include historical facts about the people or groups being awarded the medal. For example, the legislation to authorize the Congressional Gold Medal to the World War II members of the "Doolittle Tokyo Raiders" stated the following: Congressional Gold Medal legislation typically includes a section that provides details on the presentation, design, and striking of the medal. For example, the legislation to authorize the Congressional Gold Medal to the Foot Soldiers who participated in Bloody Sunday, Turnaround Tuesday, or the final Selma to Montgomery Voting Rights March in March of 1965 stated the following: Additionally, this section can contain specific instructions to the Smithsonian, when it is the recipient of the physical gold medal, on its display and availability to be loaned to other institutions. For example, the legislation authorizing the American Fighter Aces Congressional Gold Medal stated the following: Gold medal legislation also generally authorizes the Secretary of the Treasury to strike and sell duplicate medals in bronze. The duplicates are generally sold in two sizes: 1.5 inches and 3 inches. Duplicates are sold at a price which allows the U.S. Mint to cover the cost of striking the gold medal. For example, legislation authorizing the 65 th Infantry Regiment, known as the Borinqueneers, Congressional Gold Medal stated the following: Gold medal legislation generally contains a statement that these awards are considered as national medals for the purpose of the U.S. Mint's statutory requirements for producing medals. For example, legislation authorizing the Montford Point Marines Congressional Gold Medal stated the following: In some cases, authorizing legislation includes language authorizing appropriations for a Congressional Gold Medal. In these examples, Congress has authorized a specific sum from the United States Mint Public Enterprise Fund to pay for the cost of the medal. In cases where the authorization of appropriations is provided, a provision requiring that proceeds from the sale of duplicates be deposited in the same Fund is generally included. For example, legislation authorizing the Women Airforce Service Pilots Congressional Gold Medal stated the following: Congressional Gold Medal designs vary for each issuance. In general, the authorizing legislation provides that the Secretary of the Treasury "shall strike a gold medal with suitable emblems, devices, and inscriptions, to be determined by the Secretary." When designing a Congressional Gold Medal, the Secretary consults with the Citizens Coinage Advisory Commission (CCAC) and the U.S. Commission of Fine Arts (CFA) before determining the final design. Established by P.L. 108-15 , the CCAC advises the Secretary of the Treasury on theme and design of all U.S. coins and medals. For Congressional Gold Medals, the CCAC advises the Secretary "on any theme or design proposals relating to ... Congressional Gold Medals." The CCAC consists of 11 members appointed by the Secretary of the Treasury, with four persons appointed upon the recommendation of the congressional leadership (one each by the Speaker of the House, the House minority leader, the Senate majority leader, and the Senate minority leader). The CCAC meets several times each year to consider design suggestions for coins and medals. For each coin considered, the CCAC provides advice to the Secretary "on thematic, technical, and design issues related to the production of coins." Recommendations are then published to the committee's website, at http://www.ccac.gov . In tandem with recommendations received from the CCAC, the U.S. Mint also seeks a recommendation from the U.S. Commission of Fine Arts. Established in 1910, the CFA advises "upon the location of statues, fountains, and monuments in the public squares, streets, and parks in the District of Columbia; the selection of models for statues, fountains, and monuments erected under the authority of the Federal Government; the selection of artists; and questions of art generally when required to do so by the President or a committee of Congress." This includes review of commemorative coins when they are presented by the U.S. Mint and the issuance of recommendations for a coin's design. For example, in March 2014, the U.S. Mint presented several alternative designs for the First Special Service Force Congressional Gold Medal. In a letter to the U.S. Mint, the CFA provided recommendations on the design for the gold medal. CFA's letter stated the following: After receiving advice from the CCAC and the CFA, the Secretary of the Treasury, through the U.S. Mint, finalizes the coin's design and schedules it for production. Figure 1 shows the final design of two Congressional Gold Medals: the New Frontier Gold Medal for Neil Armstrong, Michael Collins, Buzz Aldrin, and John Glenn; and the Jack Nicklaus Gold Medal. As Members of Congress contemplate introducing legislation, and the House or the Senate potentially consider Congressional Gold Medal measures, there are several issues that could be considered. These can be divided into issues for individual Members of Congress with respect to individual Congressional Gold Medals, and issues for Congress as an institution. Individual issues include choices Members may make about which people or groups might be honored and whether specific design elements might be specified statutorily. Institutional issues might include committee or chamber rules on the consideration of Congressional Gold Medals and creating standards for the issuance of gold medals. Some Congressional Gold Medals have honored individuals (e.g., Arnold Palmer, Muhammad Yunus), some discrete groups of individuals (e.g., General of the Army George Catlett Marshall and Fleet Admiral Ernest Joseph King, Ruth and Billy Graham), and some larger groups (e.g., military units such as Women Airforce Service Pilots ["WASP"], Monuments Men). In choosing whom or what to recognize, Members of Congress generally evaluate whether they believe that the individual's or group's activities merit recognition by Congress. Congressional Gold Medals are "the highest civilian honor award program ... [to] honor national achievement in patriotic, humanitarian, and artistic endeavors." There are no specific criteria to determine whether or not an individual or group meets those lofty goals. Instead, each individual or group is judged on their merits by Congress should the legislation be considered. Congressional Gold Medal authorizations generally do not specify design elements. Instead, they direct the Secretary of the Treasury to "strike a gold medal with suitable emblems, devices, and inscriptions to be determined by the Secretary." Should Congress want to specify particular design elements, they might be included in the authorizing legislation. This would provide the Secretary of the Treasury with congressional intent on what should be incorporated into the gold medal design. Similar statutory specificity is sometimes included in commemorative coin legislation. Such specification, however, could serve to limit design choices for the gold medal and might alter the cost structure of striking the award, if the required element diverges from standard practices. Congressional Gold Medal legislation for groups generally provides that only a single gold medal is struck and specifies where it will be located after it is formally awarded. In many cases, the gold medal is given to the Smithsonian for appropriate display and where it can be made available for research. In other cases, the gold medal is provided to an organization that represents the honored group. Since most gold medal legislation contains a provision on the medal's location, a Member of Congress can help determine where the medal will be located. As discussed above under " Authorizing Congressional Gold Medals ," neither the House nor Senate rules provide any restrictions specifically concerning consideration of Congressional Gold Medal legislation on the House or Senate floor. In the 116 th Congress, the Senate Committee on Banking, Housing, and Urban Affairs requires that at least 67 Senators must cosponsor any Senate Congressional Gold Medal bill before being considered by the committee. Currently, the House Financial Services Committee has not adopted any specific rules concerning committee consideration of Congressional Gold Medal legislation, although it has required a minimum number of cosponsors in past Congresses for committee consideration. As demonstrated by the discontinuation of the House Financial Services Committee rule requiring a minimum number of cosponsors for committee gold medal legislation, committee rules can be changed from Congress to Congress. Should the committee want to place requirements on its consideration of gold medal legislation, the Financial Services Committee could readopt its former rule, or something similar. Adopting committee rules to require a minimum number of cosponsors might encourage bill sponsors to build support among Representatives for gold medal bills. Such a minimum requirement, however, could potentially limit the number or type of gold medal bills the committee considers. Since only the Senate Committee on Banking, Housing, and Urban Affairs has a rule that imposes a formal qualification on the potential committee consideration of gold medal legislation, the possible path forward for a bill can be different within each chamber. Should the House, the Senate, or both want to adopt similar language for committee or chamber consideration of gold medal legislation, such language could be incorporated into future committee rules, into House and Senate Rules, or into law. Taking steps to formally codify the gold medal consideration process might provide sponsors with a single process for award consideration, which could make it easier for gold medal bills to meet minimum requirements for consideration across both the House and Senate. Such codification could also limit congressional flexibility and might result in fewer proposals or authorizations to comply with new standards. Currently, there is no statutory limit to the number of Congressional Gold Medals that can be authorized. Should Congress want to place a limit on the number of gold medals awarded, standards could be adopted to provide a maximum number of gold medals authorized in any year or Congress. Congress has previously adopted similar standards for commemorative coins—only two coins may be minted in any given calendar year. Legislation to place a limit on the number of gold medals authorized has previously been introduced and considered in the House. During the 109 th Congress (2005-2006), H.R. 54 passed the House and would have restricted the Secretary of the Treasury from striking "more than 2 congressional gold medals for presentation ... in any calendar year." Introduced by Representative Michael Castle, the stated purpose of the legislation was to "maintain the prestige of the medal by limiting the number that may be awarded each year," and to "clarify that recipients are individuals and not groups." Passage of the measure, he argued, would "ensure the future integrity and true honor of the award." H.R. 54 did not receive further consideration in the Senate. While proponents of a limit on the number of gold medals issued might make arguments similar to those made by Representative Castle, opponents believe that Congress should reserve the right to authorize as many gold medals as it deems necessary, without consideration of the number struck in any calendar year. Representative Joseph Crowley in opposing the legislation told his House colleagues, "We are rushing to act on an issue that does not represent a problem." "Who that received this medal in the past," he asked, "was not worthy of it?" Further, Crowley argued that "there are occasions when more than one person is justified to receive the medal for their honorable actions in tandem with others." He continued by emphasizing that had this bill already been law, "Congress would not have been able to issue" a Congressional Gold Medal "to the Little Rock Nine," to "President and Mrs. Reagan," or to "Martin Luther King and Coretta Scott King." Congressional Gold Medals have long been an important way for Congress to express public gratitude for important historical events and achievements. Congressional Gold Medals, which have been issued since the American Revolution, are "the highest civilian honor award program ... [to] honor national achievement in patriotic, humanitarian, and artistic endeavors." In recent years, the number of gold medals awarded has "soared from four or five per decade for most of its history to an average of almost twenty in the 1980s, 1990s, and 2000s." Each Congress, legislation to award Congressional Gold Medals is introduced. In the 113 th Congress (2013-2014), 52 bills were introduced, 34 in the House and 18 in the Senate, to award a gold medal. In the 114 th Congress (2015-2016), 52 bills were introduced, 38 in the House and 14 in the Senate. In the 115 th Congress (2017-2018), 55 bills were introduced, 33 in the House and 22 in the Senate. Based on the number of measures offered in both chambers, some Members of Congress clearly feel it is important to recognize individuals and groups for their patriotic, humanitarian, and artistic achievements. Several considerations appear important when Members decide to introduce gold medal legislation. These include who should be honored, how many medals should be awarded in a given Congress, and whether specific design elements should be prescribed for the medal design. As Congress continues to consider legislation to award future gold medals, these considerations and others will likely be important factors for issuing the award.
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Senators and Representatives are frequently asked to support or sponsor proposals recognizing historic events and outstanding achievements by individuals or institutions. Among the various forms of recognition that Congress bestows, the Congressional Gold Medal is often considered the most distinguished. Through this venerable tradition—the occasional commissioning of individually struck gold medals in its name—Congress has expressed public gratitude on behalf of the nation for distinguished contributions for more than two centuries. Since 1776, this award, which initially was bestowed on military leaders, has also been given to such diverse individuals as Sir Winston Churchill and Bob Hope, George Washington and Robert Frost, Joe Louis and Mother Teresa of Calcutta. Congressional gold medal legislation generally has a specific format. Once a gold medal is authorized, it follows a specific process for design, minting, and awarding. This process includes consultation and recommendations by the Citizens Coinage Advisory Commission (CCAC) and the U.S. Commission of Fine Arts (CFA), pursuant to any statutory instructions, before the Secretary of the Treasury makes the final decision on a gold medal's design. Once the medal has been struck, a ceremony will often be scheduled to formally award the medal to the recipient. In recent years, the number of gold medals awarded has increased, and some have expressed interest in examining the gold medal awarding process. Should Congress want to make such changes, several individual and institutional options might be available. The individual options include decisions made by Members of Congress as to what individual or groups might be honored; potential specification of gold medal design elements; and where gold medals for groups might be housed once the award is made. The institutional options could include House, Senate, or committee rules for the consideration of gold medal legislation and whether statutory standards on the number of gold medals issued per year or per Congress might be established for gold medals.
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Congress appropriates approximately $23 million annually to maintain the Selective Service agency. The United States has not used conscription to fill manpower requirements for over four decades; however, the Selective Service System and the requirement for young men to register for the draft remain today. Men who fail to register are subject to penalties in the form of lost benefits and criminal action. Some have questioned the need to maintain this agency and the registration requirements. Others have questioned whether the current requirements for registration are fair and equitable. This report is intended to provide Congress with information about how the Military Selective Service Act (MSSA), the Selective Service System (SSS), and associated requirements for registration have evolved over time. It explains why the United States developed the SSS, what the system looks like today, how constituents are affected by the MSSA requirements, and what the options and considerations may be for the future of the Selective Service. The first section of the report provides background and history on the Military Selective Service Act, the Selective Service System, and the implementation of the draft in the United States. The second section discusses statutory registration requirements, processes for registering, and penalties for failing to register. The third section discusses the current organization, roles, and resourcing of the Selective Service System. The final section discusses policy options and consideration for Congress for the future of the MSSA and the Selective Service System. This report does not discuss the state of the all-volunteer force or whether it is adequate to meet our nation's current or future manpower needs. In addition, it will not provide an analysis of other options for military manpower resourcing such as universal military service or universal military training. It also does not discuss the history of the draft and draft planning for health service workers. Finally, this report does not evaluate whether the SSS, as currently structured, is adequately resourced and organized to perform its statutory mission. These questions and others will be reviewed by the National Commission on Military, National, and Public Service established by the National Defense Authorization Act (NDAA) for Fiscal Year 2017 ( P.L. 114-328 ). The United States has used federal conscription at various times since the Civil War era, primarily in times of war, but also during peacetime in the aftermath of World War II. When first adopted in 1863, national conscription was a marked departure from the traditional military policy of the United States, which from the founding era had relied on a small standing force that could be augmented by state militias in times of conflict. Conscription into the Armed Forces of the United States was used just prior to, during, and immediately after World War II (WWII). Reinstated on June 24, 1948, it remained in force until June 30, 1973. Following the adoption of the all-volunteer force (AVF) in 1973, authority to induct new draftees under the Military Selective Service Act ceased. Nevertheless, a standby draft mechanism still exists to furnish manpower above and beyond that provided by the active and reserve components of the Armed Forces in the case of a major military contingency. If the federal government were to reinstate the draft, draftees would likely be required to fill all authorized positions to include casualty replacements, billets in understrength units, and new military units activated to expand the wartime force. During the Civil War, due to high demand for military manpower, weaknesses in the system for calling up state militia units, and an insufficient number of volunteers for active federal service, President Abraham Lincoln signed the 1863 Enrollment Act. This marked the first instance of the federal government calling individuals into compulsory federal service through conscription. All male citizens between the ages of 20 and 45 who were capable of bearing arms were liable to be drafted. The law allowed exemptions for dependency and employment in official positions. The Enrollment Act also established a national Provost Marshal Bureau, led by a provost marshal general and was responsible for enforcing the draft. Under the act, the President had authority to establish enrollment districts and to appoint a provost marshal to each district to serve under the direction of the Secretary of War in a separate bureau under the War Department. The provost marshal general was responsible for establishing a district board for processing enrollments and was given authority under the law to make rules and regulations for the operation of the boards and to arrest draft dodgers and deserters. Government agents went door-to-door to enroll individuals, followed by a lottery in each congressional district based on district quotas. Some observers criticized the Enrollment Act as favoring the wealthiest citizens because it allowed for either the purchase of a substitute who would serve in the draftee's place or payment by the draftee of a fee up to $300. In addition, volunteers were offered bounties by both the federal government and some local communities. Under this system, fraud and desertions were common. Enforcement of the draft also incited rioting and violence in many cities across the United States, most famously in New York City. On July 13, 1863, the intended date of the second draft drawing in New York City, an angry mob attacked the assistant Ninth District provost marshal's office, smashing the lottery selection wheel and setting the building on fire. Several days of rioting and violence ensued until federal troops were called in to restore order. The draft call was suspended in New York City during the rioting and was not resumed until August 19, 1863. The total number of men that served in the Union forces during the course of the war was 2,690,401. The number drafted was 255,373. Of the total draftees, 86,724 avoided military service by the payment of commutation, and 117,986 furnished substitutes. Volunteerism during this war was likely driven in part by the bounty system. After the Civil War, the federal government did not use conscription again until World War I (WWI). By then a new concept for a draft system termed "Selective Service" had been developed that would apportion requirements for manpower to the states and through the states to individual counties. By 1915, Europe was in all-out war; however, the United States only had a small volunteer Army of approximately 100,000 men. On April 2, 1917, President Woodrow Wilson asked Congress for a declaration of war, and on May 18, 1917, he signed an act commonly known as the Selective Service Act of 1917 into law. This new law allowed the President to draft the National Guard into federal service and made all male citizens between the ages of 21 and 31 liable for the draft. On July 15, 1917, Congress enacted a provision that all conscripted persons would be released from compulsory service within four months of a presidential proclamation of peace. In 1918, Congress extended the eligible draft age to include all males between the ages of 18 and 45. World War I was the first instance of conscription of United States citizens for overseas service. A key aspect of the Selective Service Act of 1917 was that it allowed the federal government to select individuals from a pool of registrants for federal service. Unlike the Civil War, a shortage of volunteers was not the primary concern in enacting this leg islation. The selective aspects of the WWI draft law were driven by concerns that indiscriminate volunteerism could adversely affect the domestic economy and industrial base. In support of the selective service law, Senator William M. Calder of New York said, "under a volunteer system, there is no way of preventing men from leaving industries and crippling resources that are just as important as the army itself." In contrast to the Civil War draft, the Selective Service Act of 1917 did not allow for the furnishing of substitutes or bounties for enlistment. It also provided for decentralized administration through local and district draft boards that were responsible for registering and classifying men, and calling registrants into service. The law specified that the President would appoint boards consisting of civilian members "not connected with the Military Establishment." Over 4,600 such boards were established to hear and decide on claims for exemptions. The provost marshal general, at the time Major General Enoch Crowder, oversaw the operation of these boards. The first draft lottery was held on July 20, 1917. Out of the 24.2 million that registered for the draft in WWI, 2.8 million were eventually inducted. While the law did not prohibit volunteers, the implementation of the selective service system alongside a volunteer system became too complex and the Army discontinued accepting volunteer enlistees by December 15, 1917. By 1919, at the end of the war, the provost marshal general was relieved from his duties, all registration activities were terminated, and all local and district boards were closed. In 1936, the Secretaries of War and the Navy created the Joint Army-Navy Selective Service Committee (JANSSC) to manage emergency mobilization planning. The committee was headed by Army Major Lewis B. Hershey. Between WWI and WWII, the Armed Forces shrank in numbers due to both treaty commitments and public attitudes toward a large standing force. In the interwar period, two opposing movements emerged. Some were in support of legislative provisions that would empower the President to conscript men for military service upon a declaration of war, and some called for a universal draft, universal military training, or broader authorities to conscript civilian labor in times of both war and peace. Others proposed provisions that would require a national referendum on any future use of conscription, or would forbid conscripts from serving outside the territorial borders of the United States. In 1940, Europe was already at war, and despite the neutrality of the United States at the time, some in Congress argued that the United States could not continue with a peacetime force while other nations were mobilizing on a massive scale. In June of 1940, President Franklin D. Roosevelt announced that he would recommend a program of universal compulsory government service for American youth (men and women). A few days later a conscription bill, modeled on the Selective Service Act of 1917, was sponsored by Senator Edward Burke and Representative James Wadsworth in their respective chambers. The bill garnered support by senior Army leaders, who expressed concerns about the ability to recruit a sufficient number of volunteers necessary to fight a major war. Some in Congress opposed to the bill argued the following: Regimentation of American life as provided for by the Burke-Wadsworth bill in peacetime is abhorrent to the ideals of patriotic Americans and is utterly repugnant to American democracy and American traditions ... no proof or evidence was offered to indicate that the personnel needs of the Army and Navy cannot be obtained on a voluntary basis. The conscription bill became the Selective Training and Service Act, and was signed into law on September 16, 1940, by Franklin D. Roosevelt. The act was the first instance of peacetime conscription in the United States and required men between aged 21 through 35 to register with local draft boards. The law required a 12-month training period for those inducted, at which time the inductees would be transferred to a reserve component of the Armed Forces for 10 years. Criminal penalties for failing to comply with registration or other duties under this act included "imprisonment of not more than five years or a fine of not more than $10,000, or by both such fine and imprisonment." The act also gave the President the authority to establish a Selective Service System, and to appoint a Director of the Selective Service with oversight of local civilian boards. Because the image of civilian leadership was deemed important during a time of peace, in 1940 the President initially appointed Dr. Clarence Dykstra as Director of the Selective Service while also retaining his position as president of the University of Wisconsin. Due to poor health Dykstra never took up his position as Director of Selective Service. In July of 1941, the JANSSC that had been established in the interwar period became the new Selective Service headquarters and Colonel Lewis B. Hershey was appointed as the Director, a position he held until 1970, retiring with the rank of Lieutenant General. In terms of the implementation of the Selective Service System, there was an emphasis on establishing an equitable lottery system administered by decentralized local draft boards as was deemed a successful approach during WWI: The Selective Training and Service Act of 1940 is based on the principle that the obligation and privileges of military training and service should be shared generally in accordance with a fair and just system of compulsory military training and service.... The public expected that the lottery under the new law would be conducted as the lottery of 1917-1918 was conducted, and those charged with the administration of the Selective Service felt likewise. The 6,442 district boards assigned a number from 1 to 7,836 to each registrant in their district. On October 29, 1940, the first draft lottery was held in a similar manner to the WWI draft lottery and draft inductions into the Army began on November 18, 1940. The lottery system was used for three groups of registrants, then abandoned in 1942 and not used again for the draft until 1969 during the Vietnam conflict. In the interim, draftees were inducted by local boards based on required quotas, classification, age (oldest first), and order of precedence as determined by contemporary policy. Although some complaints arose over inequalities and inconsistencies in the draft administration, a Gallup poll conducted in 1941 found that 93% of those polled thought the draft had been handled fairly in their community. Volunteers were allowed to serve; however, approximately 10 million of the 16 million servicemembers who served during WWII were draftees. Although the Selective Training and Service Act was set to expire in 1945, at the time of drafting, some felt that the emergency conscription program should evolve into a permanent system of universal military training. In testimony before the House Appropriations Committee on June 5, 1941, General Marshall stated I believe that Selective Service provides the only practical and economical method of maintaining the military force that we inevitably are going to be required to have in the future, and I think, with all my heart, that Selective Service is a necessity to the maintenance of a true democracy. These sentiments continued at the end of the WWII, and there was a push by some to maintain compulsory military training or another program of postwar conscription. In 1945, the congressional Committee on Postwar Military Policy held a series of open hearings on compulsory military training. Those in favor of maintaining some form of conscription argued that it would provide a deterrent to future "Hitlers and Hirohitos" as well as build the health and character of American youth. Those opposed contended that conscription was antithetical to democratic ideals, was an inefficient mechanism for building force structure, and led to war, international distrust, and profiteering. Congress extended the Selective Training and Service Act in 1945 and 1946. In 1947, Congress repealed the act and all functions and responsibilities of the Selective Service System were transferred to the Office of Selective Service Records. This office, by law, had a limited mandate for knowledge preservation, and maintenance and storage of individual records. This restructuring essentially put the Selective Service System into a deep standby mode. By 1948, the military had shrunk in size to less than 1.5 million from a peak of 12 million in 1945. Concerned about lagging recruiting efforts and the rising power of the Soviet Union, Congress authorized reinstatement of the draft in the Selective Service Act of 1948, which was signed into law by President Truman on June 24, 1948. The act was similar to previous acts authorizing the Selective Service System. It established registration requirements for males ages 19 to 26, and the same criminal penalties for fraudulent registration or evasion. It also dissolved the Office of Selective Service Records and transferred its responsibilities back to the newly established Selective Service System as an independent agency of the federal government. Under this act, the President had authority to appoint state directors of the Selective Service System. It also provided the authority to call National Guard and Reserve personnel into active duty to support the administration of state and national headquarters. The Selective Service Act of 1948 was set to expire on June 24, 1950. Due to budget constraints and absence of an immediate threat to national security, between 1948 and 1949 conscription was only used to fill recruiting shortfalls. On June 25, 1950, war broke out between North and South Korea. Although a bill to extend the Selective Service Act of 1948 was already in conference, the Senate rushed to approve the bill on June 28 and it was signed by the President on June 30, 1950. The following year, Congress renamed the act the Universal Military Training and Service Act of 1951. The act extended the draft until July 1, 1955, and also lowered the registration age to 18. As the new name suggested, the law also contained a clause that would have obligated all eligible males to perform 12 months of military service and training within a National Security Training Corps if amended by future legislation (it was never amended). The act did not alter the structure or functions of the SSS; however, it did require the Director to submit an annual report to Congress on the number of persons registered, the number of persons inducted, and the number of deferments granted and the basis for them. The United States inducted approximately 1.5 million men into the military (one-quarter of the total uniformed servicemembers) under this act in support of the Korean conflict. A draft lottery was not used in this era, rather, the Department of Defense issued draft calls, and quotas were issued to local boards. The local boards would then fill their quotas with those classified as "1-A", or "eligible for military service" by precedence as determined by policy. Public concerns with the draft at this time were equitable implementation of the draft due to the broad availability of deferments for what some saw as privileged groups. Others expressed concerns about the potential disruption of citizens' lives. Between 1950 and 1964 Congress repeatedly extended the Universal Military Training and Service Act in four-year periods with minor amendments. During this time, volunteers made up approximately two-thirds of the total military force with the remainder supplemented through inductions—with some limited exceptions, the Navy, Air Force, and Marines relied on volunteers almost entirely. For example, monthly draft calls in 1959 were for approximately 9,000 men out of an eligible population of about 2.2 million. In 1964, when America became involved militarily in Vietnam, conscription was again used to mobilize manpower and augment the volunteer force. Among the criticisms of the draft system during this period were that it was inequitable and discriminatory since the chance of being drafted varied by state, by local community, and by one's economic status. In the late 1960s, public acceptance of the draft began to erode for the following reasons, inter alia : Opposition to the war in Vietnam. The U.S. Army's desire for change due to discipline problems among some Vietnam draftees. Belief that the state did not have a right to impose military service on young men without consent. Belief that the draft was an unfair "tax" being imposed only on young men in their late teens and twenties. Perception of some observers that the draft placed an unfair burden on underprivileged members of society. Demographic change increasing the size of the eligible population for military service relative to the needs of the military. Estimations that an all-volunteer force could be fielded within acceptable budget levels. In response to some of these concerns and associated political pressures, President Lyndon B. Johnson issued Executive Order 11289 on July 2, 1966, establishing the National Advisory Commission on Selective Service headed by Burke Marshall. President Johnson instructed the commission to consider past, present, and prospective functioning of the Selective Service System and other systems of national service, taking into account the following factors: Fairness to all citizens, Military manpower requirements, Minimizing uncertainty and interference with individuals' careers and educations, National social, economic, and employment goals, and Budgetary and administrative considerations. The commission examined a number of potential options from requiring everyone to serve to elimination of all compulsory service. The commission's final report, In Pursuit of Equity: Who Serves When not all Serve? , was delivered to the President in February of 1967 at the time when the Selective Service law was up for renewal. The commission recommended continuing conscription but making significant changes to the Selective Service System to "assure equal treatment for those in like circumstances." Among these recommended changes were (1) adopting an impartial and random selection process and order of call, (2) consolidating the local boards under centralized administration with uniform policies for classification, deferment, and exemptions, and (3) ensuring that composition of local boards was representative of the population that they served. In parallel with the Presidential Commission's review, the House Armed Services Committee chartered their own review with a civilian advisory panel chaired by retired Army General Mark Clark. The Clark panel also recommended against shifting to an all-volunteer force but disagreed on the establishment of a lottery. In 1967, Congress extended the SSS through July 1, 1971, under the renamed Military Selective Service Act of 1967 (henceforth MSSA). While the Administration had pushed for comprehensive draft reform based on the commission's recommendations, the bill contained few of President Lyndon Johnson's proposals. In particular, the bill, as enacted, prohibited the President from establishing a random system of selection (draft lottery) without congressional approval. In 1969, President Richard M. Nixon called on Congress to provide the authority to institute the draft lottery system. In response, Congress amended the 1967 law, repealing the prohibition on the President's authority. On the same day, President Nixon signed Executive Order 11497 establishing the order of call for the draft lottery for men aged 19 through 25 at the end of calendar year 1969. While the draft remained contentious, in 1971 the induction authority under the MSSA was again extended through 1973. In response to concerns regarding the composition of local boards, the bill stated, The President is requested to appoint the membership of each local board so that to the maximum extent practicable it is proportionately representative of the race and national origin of those registrants within its district. The bill also included a significant pay raise for military members as a first step toward building an all-volunteer force (AVF). Two months into President Nixon's first term, he launched the President's Commission on an All-Volunteer Force, which came to be known as the Gates Commission. In its 1970 report, the commission unanimously recommended that "the nation's best interests will be better served by an all-volunteer force, supported by an effective standby draft, than by a mixed force of volunteers and conscripts." The Gates Commission also recommended maintaining a Selective Service System that would be responsible for a register of all males who might be conscripted when essential for national security, a system for selection of inductees, specific procedures for the notification, examination, and induction of those to be conscripted, an organization to maintain the register and administer the procedures for induction, and the provision that a standby draft system may be invoked only by resolution of Congress at the request of the President. The last draft calls were issued in December 1972 and the statutory authority to induct expired on June 30, 1973. On January 27, 1973, Secretary of Defense Melvin R. Laird announced the end of conscription. The last man to be inducted through the draft entered the Army on June 30, 1973. Table 1 shows the number of inductees and total participants for each major conflict in which the United S tates used the draft and for which data are available. More than half of the participants in WWI and nearly two-thirds of the WWII participants were draftees. About one-quarter of the participants in the Korean and Vietnam conflicts were draftees, however , it should be noted that the possibility of being drafted may have induced higher rates of volunteerism during these later conflicts. President Gerald Ford temporarily suspended the registration requirement through Proclamation 4360 (89 Stat. 1255) in April 1975. The MSSA was not repealed, however, and the requirement for the SSS to be ready to provide untrained manpower in a military emergency remained. This proclamation essentially put the SSS into deep standby mode. At the time there were approximately 98 full-time staff operating a pared-down field structure with a national headquarters and nine regional headquarters. In the late 1970s, some were concerned that this "standby" system did not have the resources or infrastructure to register, select, classify, and deliver the first inductees within 30 days from the start of an emergency mobilization. These concerns became even more salient when, in December 1979, the Soviet Union invaded Afghanistan. In his January 1980 State of the Union address, President Jimmy Carter announced his intention to resume draft registration requirements in the coming year. A Gallup Poll conducted in March 1980 found that 76% were in favor of a registration requirement for young men. Congress responded by providing $13.3 million in appropriations for the Selective Service System on June 25, 1980. President Carter signed Proclamation 4771 on July 2, 1980, reestablishing the requirement for all 18- to 25-year-old males to register for the Selective Service and setting out guidelines for registration. Penalties for failing to register were the same as those first established in the 1940 Selective Training and Service Act (a fine of up to $10,000 and/or a prison term of up to five years). However, unlike in previous draft registration regulations, there was no requirement for men to undergo evaluation and classification for fitness to serve. The new standby SSS had five key components that are still largely in place today: A registration process that is reliable and efficient. An automated data processing system that could handle pre- and postmobilization requirements. A system for promulgation and distribution of orders for induction. A claims process that can quickly insure all registrants' rights to due process are protected. A field structure that can support the claims process. Supporters of reestablishing the registration requirement for men argued that it would send a message to the Soviet Union that the United States was prepared to act to defend its interests and also that it would cut down the mobilization time in the event of a national emergency. Some argued that registration was not enough, and advocated for a return of peacetime conscription, universal military training, or compulsory national service. Organizations opposed to the reinstatement of registration requirements argued that registration forms were illegal because they required registrants to disclose their Social Security numbers. Others argued that the exemption of women in the draft law was unconstitutional. Carter's proposal to Congress included legislative language that would have given the President the authority to register women. As justification for this proposal, he stated, My decision to register women is a recognition of the reality that both women and men are working members of our society. It confirms what is already obvious throughout our society – that women are now providing all types of skills in every profession. The military should be no exception. […] There is no distinction possible, on the basis of ability or performance, that would allow me to exclude women from an obligation to register. Congress rejected the President's proposal to include women with an explanation under Title VIII of S. Rept. 96-826, [T]he starting point for any discussion of the appropriateness of registering women for the draft is the question of the proper role of women in combat. The principle that women should not intentionally and routinely engage in combat is fundamental, and enjoys wide support among our people. It is universally supported by military leaders who have testified before the committee, and forms the linchpin for any analysis of this problem. […] Current law and policy exclude women from being assigned to combat in our military forces, and the committee reaffirms this policy. The policy precluding the use of women in combat is, in the committee's view, the most important reason for not including women in a registration system. In 1981, the Supreme Court heard a challenge to the exception for women to register for Selective Service. In the Rostker v. Goldberg case, the Court held that the practice of only registering men for the draft was constitutional. In the majority opinion, Justice William Rehnquist wrote [t]he existence of the combat restrictions clearly indicates the basis for Congress' decision to exempt women from registration. The purpose of registration was to prepare for a draft of combat troops. Since women are excluded from combat, Congress concluded that they would not be needed in the event of a draft, and therefore decided not to register them. The first national registration after the reinstatement of the requirement was held in 1980 through registration at local U.S. Post Offices. The registration rate for the 1980 registration was 87% within the two-week registration period and 95% through the fourth month of registrations. In 1973, the registration rates were 77% within 30 days of one's 18 th birthday as required by statute, and 90% through the fourth month. The Government Accountability Office (GAO) estimated that, of the registrations submitted, there was a final accuracy level of 98%. Despite initial successes in registration, there was a push by many in Congress and the Administration to maintain public awareness of the requirements and to maintain high compliance rates. On January 21, 1982, President Ronald Reagan authorized a grace period until February 28, 1982, allowing those who had not registered to do so. In 1982, the Department of Justice began prosecution of those men who willfully refused to register for selective service. In the June 1983 SSS semiannual report to Congress, the agency reported that it had referred 341 persons to the Department of Justice for investigation. At the time of the report, there were 11 indictments and 2 convictions. In the same year, there was a movement in Congress to tie eligibility for federal benefits to registration requirements. National Defense Authorization bills for Fiscal Year 1983 were reported to the House and Senate floor without any proposed amendments to the MSSA. However, on May 12, 1982, the bill was amended by Senators Hayakawa and Mattingly on the Senate floor to prohibit young male adults from receiving any federal student assistance under Title IV of the Higher Education Act if they cannot certify they had registered with Selective Service. The Senate passed amendment as drafted by voice vote. Representative Jerry Solom introduced a similar amendment on the House floor. In conference committee, Members added language to direct the Secretary of Education and the Director of Selective Service to jointly develop methods for certifying registration. This provision amending the MSSA was signed into law as part of the FY1983 National Defense Authorization Act with an effective date of July 1, 1983. Representative Solomon also led the effort to attach similar language to the Job Training Partnership Act of 1982, which was passed on October 13, 1982. This law prohibited those who failed to register from receiving certain federal job training assistance. Congress repealed the Job Training and Partnership Act and replaced it with the Workforce Investment Act of 1998; however, the statutory language enforcing the MSSA was maintained in the new law. In 1985, Congress added a provision to the National Defense Authorization Act for Fiscal Year 1986 that made an individual ineligible for federal civil service appointments if he "is not registered and knowingly and willfully did not so register before the requirement terminated or became inapplicable to the individual." Congress also expressed support for the peacetime registration program as a "contribution to national security by reducing the time required for full defense mobilization," and as sending "an important signal to our allies and to our potential adversaries of the United States defense commitment." On November 6, 1986, President Reagan signed into law the Immigration Reform and Control Act. This law required males between the ages of 18 and 26 who are applying for legalization under the act to register for the Selective Service if they have not already done so. In response, the Immigration and Naturalization Service (INS) and the SSS established procedures for registering young men as part of the immigration application process. Between 1980 and 2019, several Members of Congress proposed a number of legislative changes to the MSSA; however, none have been enacted. Typically, such proposed changes to the MSSA have included one or more of the following options: Repeal the entire MSSA. Terminate the registration requirement. Reinstate draft induction authority. Defund the Selective Service System. Require women to register for the draft. Other proposed changes would seek to modify SSS record management or registration processes. These options are discussed in more detail later in this report. In the FY2017 NDAA ( P.L. 114-328 ), Congress established a National Commission on Military, National, and Public Service to help consider some of the options for the future of the MSSA. The commission is tasked not only with a review of the military selective service process, but also with proposing "methods to increase participation in military, national, and other public service, in order to address national security and other public service needs of the Nation." The statutory scope of the commission is to review (1) The need for a military selective service process, including the continuing need for a mechanism to draft large numbers of replacement combat troops; (2) means by which to foster a greater attitude and ethos of service among United States youth, including an increased propensity for military service; (3) the feasibility and advisability of modifying the military selective service process in order to obtain for military, national, and public service individuals with skills (such as medical, dental, and nursing skills, language skills, cyber skills, and science, technology, engineering, and mathematics (STEM) skills) for which the Nation has a critical need, without regard to age or sex; and (4) the feasibility and advisability of including in the military selective service process, as so modified, an eligibility or entitlement for the receipt of one or more Federal benefits (such as educational benefits, subsidized or secured student loans, grants or hiring preferences) specified by the Commission for purposes of the review. Section 552 of the FY2017 NDAA also required DOD to prepare a preliminary report on the purpose and utility of the SSS to support the commission's work, to include (1) A detailed analysis of the current benefits derived, both directly and indirectly, from the Military Selective Service System, including— (A) the extent to which mandatory registration benefits military recruiting; (B) the extent to which a national registration capability serves as a deterrent to potential enemies of the United States; and (C) the extent to which expanding registration to include women would impact these benefits. (2) An analysis of the functions currently performed by the Selective Service System that would be assumed by the Department of Defense in the absence of a national registration capability. (3) An analysis of the systems, manpower, and facilities that would be needed by the Department to physically mobilize inductees in the absence of the Selective Service System. (4) An analysis of the feasibility and utility of eliminating the current focus on mass mobilization of primarily combat troops in favor of a system that focuses on mobilization of all military occupational specialties, and the extent to which such a change would impact the need for both male and female inductees. (5) A detailed analysis of the Department's personnel needs in the event of an emergency requiring mass mobilization, including— (A) a detailed timeline, along with the factors considered in arriving at this timeline, of when the Department would require— (i) the first inductees to report for service; (ii) the first 100,000 inductees to report for service; and (iii) the first medical personnel to report for service; and (B) an analysis of any additional critical skills that would be needed in the event of a national emergency, and a timeline for when the Department would require the first inductees to report for service. (6) A list of the assumptions used by the Department when conducting its analysis in preparing the report. DOD submitted its congressionally mandated report in July 2017. The report noted that the department "currently has no operational plans that envision mobilization at a level that would require conscription." Nevertheless, it acknowledges that, "the readiness of the underlying systems, infrastructure, and processes to effect [a draft] – serve as a quiet but important hedge against an unknowable future." The GAO's report, released in January 2018, noted that DOD's requirements and timeline for mobilization of forces remain unchanged since 1994, despite changes to force structure, capability needs, national security environment, and strategic objectives. In particular, the report authors stated the following: DOD provided the personnel requirements and a timeline that was developed in 1994 and that have not been updated since. These requirements state that, in the event of a draft, the first inductees are to report to a Military Entrance Processing Station in 193 days and the first 100,000 inductees would report for service in 210 days. DOD's report states that the all-volunteer force is of adequate size and composition to meet DOD's personnel needs and it has no operational plans that envision mobilization at a level that would require a draft. Officials stated that the personnel requirements and timeline developed in 1994 are still considered realistic. Thus, they did not conduct any additional analysis to update the plans, personnel requirements, or timelines for responding to an emergency requiring mass mobilization. The authors stated that the GAO's 2012 recommendation that DOD "establish a process of periodically reevaluating DOD's requirements for the Selective Service System in light of changing operating environments, threats, and strategic guidance" remains valid. The National Commission on Military, National and Public Service released an interim report on their research findings on January 23, 2019. The report summarizes preliminary findings. With respect to the SSS, the commission is considering options that could expand the registration requirement to include women; identify individuals who possess critical skills the nation might need; call for volunteers during times of emergency using the existing system; and, incorporate reasonable changes to identify, evaluate, and protect those who object to military service, but are otherwise willing to serve. The commission is scheduled to continue its work through March 2020. Today, nearly all males residing in the United States—U.S. citizens and documented or undocumented immigrant men—are required to register with the Selective Service if they are at least 18 years old and are not yet 26 years old. Those who are required to register must do so within 30 days of their 18 th birthday unless exemptions apply as listed in Table 2 . Men born from March 29, 1957, to December 31, 1959, were never required to register because the registration program was not in effect at the time they turned 18. Individuals are not allowed to register beyond their 26 th birthday. Women are currently not required to register for the Selective Service. Federal regulations state, " No person who is not required by selective service law or the Proclamation of the President to register shall be registered." All of those required to register would be considered "available for service" in the case of an emergency mobilization unless they were reclassified by the SSS. Almost all Selective Service registrations are completed electronically; however, registration can also be done at U.S. Post Offices and by submission of paper registrations. Most states, four territories, and the District of Columbia (D.C.) have driver's license legislation that provides for automatic Selective Service registration when obtaining a driver's license, driver's permit, or other form of identification from the Department of Motor Vehicles. In FY2017, 42% of all registrations, representing nearly 1 million young men, were conducted electronically through driver's license legislation (see Figure 1 ). The SSS also has interagency agreements for registration. In cooperation with U.S. Citizenship and Immigration Services, immigrant men ages 18 through 25 who are accepted for permanent U.S. residence are registered automatically. In addition, men of registration age who apply for an immigrant visa through the Department of State are also registered. The application form for federal student aid includes a "register me" checkbox for those who have not yet registered for the Selective Service, which authorizes the SSS to automatically register those individuals. The SSS reports that approximately 25% of their electronic registrant data come from the Department of Education as part of the student aid application process. The SSS also has existing data-sharing relationships with the DOD and the Department of Labor. In FY2017, the SSS reported a 73% compliance rate for the 18-year-old year of birth (YOB) group. Registration compliance rate for the 20 through 25 YOB group was 92% in calendar year 2016, a decrease of 2% from the previous year, but above the SSS goal of 90%. Reasons for noncompliance may include lack of awareness of requirements, or purposeful avoidance. Knowingly failing to register comes with certain penalties including the following: If indicted, imprisonment of not more than five years and/or fine of not more than $10,000 (increased to $250,000 in 1987 by 18 U.S.C. §3571(b)(3)). Ineligibility for federal student aid. Ineligibility for appointment to a position in an executive agency. Ineligibility for federal job training benefits. Potential ineligibility for citizenship (for certain immigrants to the United States). Possible inability to obtain a security clearance. In addition, a large number of state legislatures as well as county and city jurisdictions have conditioned eligibility for certain government programs and benefits on SSS registration. Failing to register for the Selective Service, or knowingly counseling, aiding, or abetting another to fail to comply with the MSSA, is considered a felony. Those who fail to register may have their names forwarded to the Department of Justice (DOJ). In FY2017, 184,051 names and addresses of suspected violators were provided to DOJ. In practice, there have been no criminal prosecutions for failing to register since January 1986. At that time the SSS reported a total of 20 indictments with 14 convictions. Other penalties adversely affect the population required to register. For example, California estimated that between 2007 and 2014, young men in that state who failed to register were denied access to more than $99 million in federal and state financial aid and job training benefits. There is some relief from penalties for those who fail to register. The MSSA establishes a statute of limitations on criminal prosecutions for evading registration to five years after a fraudulent registration or failure to register, whichever is first. Also, individuals may not be denied federal benefits for failing to register if the requirement to register has terminated or become inapplicable to the person; and the person shows by a preponderance of the evidence that the failure of the person to register was not a knowing and willful failure to register. Individuals who unknowingly fail to register may ask for reconsideration from the official handling their case and may be required to submit evidence that they were unaware of their requirement to register. The Selective Service System is an independent federal agency within the executive branch with headquarters located in Arlington, VA. The agency is currently maintained as an active standby organization. The statutory missions of the SSS are to maintain a complete registration and classification structure capable of immediate operation in the event of a national emergency (including a structure for registration and classification of persons qualified for practice or employment in a health care occupation essential to the maintenance of the Armed Forces), and personnel adequate to reinstitute immediately the full operation of the System, including military reservists who are trained to operate such System and who can be ordered to active duty for such purpose in the event of a national emergency. If the SSS were activated with the authority to induct individuals, the agency would be responsible for (1) holding a national draft lottery, (2) contacting registrants who are selected via the lottery, (3) arranging transportation for selectees to Military Entrance Processing Stations (MEPS) for testing and evaluation of fitness to serve, and (4) activating a classification structure that would include area offices, local offices, and appeal boards. Local boards would also evaluate claims for exemption, postponement, or deferments. Those classified as conscientious objectors would be required to serve in a noncombatant or nonmilitary capacity. For those permitted to serve in a nonmilitary capacity, the SSS would be responsible for placing these "alternative service workers" with alternate employers and tracking completion of 24 months of their required service. The agency's workforce is comprised of full-time career employees, part-time military and civilian personnel, and approximately 11,000 part-time civilian volunteers. In FY2017, the agency had 124 full-time equivalent civilian positions for administration and operations across agency headquarters, the Data Management Center, and three regional headquarters offices. Part-time employees include 56 State Directors representing the 50 states, four territories, the District of Columbia, and New York City. The median GS grade for the agency is GS-11. The SSS maintains a list of unpaid volunteers who serve as local, district, and national appeal board members who could be activated to help decide the classification status of men seeking exemptions or deferments in the case of a draft. The Selective Service System also has positions for 175 part-time Reserve Forces Officers (RFOs) representing all branches of the Armed Forces. RFO duties include interviewing Selective Service board member candidates, training board members, participating in readiness exercises, supporting the registration public awareness effort, and maintaining space, equipment, and supplies. Congress appropriates funds for the SSS through the Financial Services and General Government Appropriations Act. For FY2018, Congress appropriated $22.9 million, the same as the FY2017 appropriation. The budget request for FY2019 was $26.4 million, an increase of $3.5 million over the FY2018 appropriation. Funding decreased by 10% from FY2012 to FY2013, from just under $25 million to $22 million in FY2013. Since FY2013, funding has remained fairly stable in terms of current dollars, but has decreased in terms of inflation-adjusted (real) dollars. In current dollars, funding for the SSS has been about $25 million since 1980, when the requirement to register was reinstated. In FY1977-FY1979, while the SSS was in "deep standby" mode, funding for the agency was between $6 million and $8 million. About two-thirds of the agency's annual budget goes to personnel compensation and benefits, 11% of which is Reserve Force Officer training pay and allowances. Government and commercial agency contracts and services accounted for 11% ($42.4 million) of total spending. The SSS allocated approximately $1.4 million to postage and express courier services in FY2017, and spent nearly $2 million on software and data processing systems (see Figure 2 ). The agency maintains data for registrants until their 85 th birthday at the Data Management Center in Palatine, IL; the center is authorized 48 full-time employees. The purpose of retaining the data for this length of time is to enable SSS to verify eligibility for registered males who apply for certain government employment or benefits. The number of records in the database is approximately 78 million. According to the SSS, this database grows by 2 million to 2.5 million records per year. The information held in this database includes registrants' full name, date of birth, street address, city, state, zip code, and Social Security number. The SSS also maintains a "Suspected Violator Inventory System," which includes data on nonregistrants that the SSS has received through data-sharing agreements. The SSS uses information on this list to reach out to individuals and remind them of their obligation to register. Most of the registration and data-sharing is automated. The SSS both provides data to and receives data from other government agencies, including the Department of Labor, the Department of Education, the Department of State, the United States Citizenship and Immigration Services, the Department of Defense, and the Alaska Permanent Fund. Information received from these agencies by the SSS is matched with existing data and if no record exists, one is created. On a monthly basis, SSS provides the Joint Advertising and Market Research Studies (JAMRS, part of DOD) new registrant names, addresses, and date of birth, and a file of individuals identified as deceased. These data are kept for three years by JAMRS and are used by DOD for recruiting purposes. Yearly, SSS provides the names, addresses, and Social Security numbers of individuals ages 18 through 25 to the U.S. Census Bureau for its intercensus estimate program. The Census Bureau keeps these data for two years. Annually, the SSS also sends the Department of Justice a list of individuals who are required to register, but have failed to do so. Men are required to update the Selective Service within 10 days when their address changes until January 1 of the year that they turn 26 years old. Those who register at 18 years old are likely to move at least once, if not a number of times, before their 26 th birthday. For example, a college-bound 18-year-old may move away from their parents' home to university housing, then into an off-campus apartment, and into a new home after graduation. The SSS updates addresses in its database using information from other agencies and self-reported information from individuals. Although Congress has amended the MSSA a number of times, some of its main tenets—the preservation of a peacetime selective service agency and a registration requirement—have remained much the same since the mid-20 th century. The future of the Selective Service System is a concern for many in Congress. The registration requirements and associated penalties affect young men in every congressional district. At the same time, some see the preservation of the SSS as an important component of national security and emergency preparedness. Others have suggested that the MSSA is no longer necessary and should be repealed. Still others have suggested amendments to the MSSA to address issues of equity, efficiency, and cost. Some form of selective service legislation has been in effect almost continuously since 1940. Repealing the MSSA and associated statute would dismantle the SSS agency infrastructure and would remove the registration requirement with its associated penalties. Efforts to repeal the Selective Service Act have been repeatedly introduced in Congress, and repeal is popular among many advocacy groups and defense scholars. Those who would like to disband the SSS question whether the agency is still necessary in the modern-day context. A return to the draft is unpopular with a majority of the American public. Some argue that there is a low likelihood of the draft ever being reinstated. Even in the face of nearly a decade of conflict in Iraq and Afghanistan, DOD has maintained its ability to recruit and retain a professional volunteer force without resorting to conscription. The nature of warfare has shifted in such a way that the United States would not likely need to mobilize manpower at the rates seen in the 20 th century. Even if such high mobilization rates were needed, some question whether the Armed Forces would have the capacity and infrastructure to rapidly absorb the large numbers of untrained personnel that a draft would provide. DOD has reported that the Military Entry Processing Command (MEPCOM) can process approximately 18,000 registrants per day. These new accessions would then be sent to training centers/duty stations as identified by the Office of the Secretary of Defense. Some analysts have suggested that a draft, if implemented, would be an inefficient use of labor, as it would "indiscriminately compel employment in the military regardless of an individual's skills where that individual could have much greater value to our society elsewhere." In addition, when conscription has been used, it has generally provided a lower-quality force in comparison with today's all-volunteer force. Others, including civil rights advocacy groups, contend that the registration requirement and conscription are an invasion of civil liberty. Those who advocate for suspension of all SSS activity contend that the SSS infrastructure and registrant databases could be reconstructed in due time if the need arose. In the short term, additional manpower needs might be augmented by Delayed Entry Program (DEP) participants, nonprior reservists awaiting training, and other inactive reserve manpower. A reauthorization of the draft might also encourage volunteerism, as choosing a branch of service and occupational specialty might be more preferable to the possibility of being drafted into a less favorable branch and occupation. Proponents of maintaining the SSS and registration requirement often cite a few key arguments. First, at approximately $23 million per year, it provides a relatively low-cost "insurance policy" against potential future threats that may require national mobilization beyond what could be supported by the all-volunteer force. Second, adversaries of the United States could see the disbanding of the SSS as a potential weakness, thus emboldening existing or potential enemies. Third, the registration requirement is important to maintain connections between the all-volunteer force and civil society by creating an awareness of the military and duty to serve among the nation's youth. Finally, maintaining an all-volunteer force is costly, particularly in times of conflict. Sustaining the AVF over the past decade has stretched DOD's resources. If the United States were to become involved in a sustained large-scale conflict, the compensation and benefits required to incentivize voluntary military participation by a larger segment of the population could be substantial. Some of the options for amending the MSSA include the following: Repealing the registration requirement. Dissolving the SSS agency and transferring certain functions to an existing federal agency. Removing or modifying penalties for failure to register. Requiring women to register. Enhancing SSS data collection. Congress could repeal the registration requirement and terminate the existing penalties for failing to register. Removing the registration requirement and the need to verify registration would reduce the activities of the SSS. In this instance, the agency's functions would likely be limited to historical record preservation and maintenance of standby plans and volunteer rolls. Some have proposed that if registrant data were needed for a future draft, they might be acquired through existing federal or state government databases. The current SSS database relies heavily on information collected by other federal and state entities for initial inputs, updates, and verification of registrants' address information. However, this data sharing is enabled by existing statutes and agency agreements that if repealed or allowed to lapse might require time and effort to reconstitute. The use of existing government or even commercial databases to develop a list of draft-eligible youth also raises concerns about a fair and equitable draft, as these lists might also exclude some draft-eligible individuals. In the case of a national emergency, Congress could enact a new statutory requirement for draft registration, and reconstitute the SSS (if it had been dissolved). A 1997 GAO study found that the time needed to raise the necessary infrastructure might be insufficient to respond to urgent DOD requirements. There may be other challenges in enforcing a new registration requirement in a time of national need. Currently, compliance rates for registration are relatively high, but the probability of implementing a draft is considered to be very low. If the government tried to reintroduce a registration requirement during a time when conscription were more likely, compliance rates could fall and it might be more difficult to build up a database of eligible individuals. On the other hand, some point to the SSS experience in 1980, when the the SSS reported 95% compliance rates within four months of reinstatement of the registration requirement. Current law states, "the Selective Service System should remain administratively independent of any other agency, including the Department of Defense." Nevertheless, Congress could amend the MSSA to transfer its functions to an existing federal agency. Such a transfer might take into account not only the SSS's value as a unique data center, but also the staff who comprise the agency at many levels, who would be needed in case of an actual draft. As described previously, this staffing includes regional directors and a pool of civilian volunteers that would serve on local draft boards. This responsibility for maintaining volunteer rolls and training could also be transferred to an existing federal agency, potentially the Department of Defense, and the capability could be augmented with military reserve manpower (as is currently done). The statutory independence of the SSS with respect to DOD and the presence of local civilian boards have historically been viewed as important to the public's perception of a fair and equitable draft. To address this concern, some have proposed that administrative responsibilities could be transferred to DOD while the draft is inactive with the option of transferring all functions back to an independent agency if draft authority were reinstated. Another option might be to transfer the agency and/or its functions to the Department of Homeland Security. There are potential synergies between the SSS and other DHS agencies that would play an active role in a time of national emergency. At least one agency under DHS (the U.S. Citizenship and Immigration Service) already has a role in data sharing with the SSS. Some suggest that suspension or transfer of SSS operations could deliver some federal budget savings. In 2012, as mandated by the National Defense Authorization Act for Fiscal Year 2012, the GAO compared the potential costs and savings of operating in a "deep standby" mode versus active registration. According to the report, the SSS estimated that operating in a deep standby mode would provide approximately $5 million in savings in the first year with recurring savings of $6.6 million annually. This would be a reduction of about 25% of the current budget. The transfer of SSS functions to an existing agency might have some initial implementation costs but could potentially reduce some of the overhead costs of maintaining an independent agency. Finally, some argue that Congress should amend the MSSA and associated statute to remove penalties for failing to register, particularly since only men are subject to the requirements. They argue that ineligibility for federal benefits is most harmful to those with fewer financial resources who also might be least aware of their obligation to register. Nevertheless, weakening or removing penalties could affect registration compliance rates. Alternatively, Congress could amend the penalties to limit the amount of time that one is ineligible for federal benefits following failure to register. For example, under current law, the statute of limitations for criminal penalties is five years following the individual's 26 th birthday or fraudulent registration. The MSSA could be amended to sunset ineligibility after a certain time period, or to reinstate eligibility for federal benefits through some other form of public service. Women in the United States have never been required to register for the draft; however, recent DOD policy changes that have opened all military occupational specialties (MOSs) including ground combat positions to women have called into question the Selective Service exemption for women. Although the Trump Administration has not announced a formal position, in 2016, several senior DOD leaders made personal statements in favor of registering women for the draft. Some military leaders have argued that in the case of national need, it would be unwise to exclude 50% of the population from draft eligibility. In a February 2019 decision, the U.S. District Court for the Southern District of Texas granted a summary judgement declaring the male-only registration requirement was unconstitutional; however, the court did not grant injunctive relief blocking the government's current male-only registration policy because the plaintiffs' summary judgment motion seeking declaratory relief failed to request it. As such, the male-only registration policy remains in place. The plaintiffs in this case, the National Coalition for Men and two men of registration age, argue that requiring only men to register constitutes sex discrimination in violation of the Fifth Amendment's equal protection clause. Some women have also pushed for female registration, arguing that women cannot be equal in society as long as they are barred from full participation in all levels of the national security system and thus should be allowed to register for Selective Service. Others believe that equal access to combat jobs should oblige women to take equal responsibility for registering for Selective Service and potential assignments to combat roles should the draft be reinstated. Still others suggest that women should be obliged to enroll in the selective service system but should not be forced into combat roles in the occasion of a draft. Any exemptions for women would raise fairness concerns for men, who would not have the same opportunities to opt out of combat assignments. Making the choice not to serve in combat available to both men and women might make it difficult for the services to function, especially in the event of war or national emergency. Those who are opposed to a requirement for women to register suggest that it is not fair and equitable for women to be placed in the same roles as men. They argue that the average woman does not have the same physical capabilities as the average man and thus would have higher rates of injury and a lower probability of survival if forced to serve in direct ground combat roles. Some have countered that the physical standards for assignment to these roles are unlikely to be lowered on the instance of draft mobilization, ensuring that the cadre of men and women would be assigned to those roles at rates proportional to their ability to meet those standards. This approach would prevent both women and men who were unable to meet physical standards for direct ground combat occupations from those assignments. Moreover, opponents of drafting women point out that it would be militarily inefficient to draft thousands of women when only a small percentage would be physically qualified to serve in direct ground combat roles. At the same time, future wars may have requirements for other skills in noncombat fields where the percentage of individuals qualified would not be as variable by gender. A requirement for young women to register may have some benefits for DOD in terms of military recruiting. The address data collected by the Selective Service System and shared with DOD currently enhances recruiters' ability to identify potential enlistees and distribute marketing materials to registered young men by mail. DOD estimates that marketing materials included with SSS registration confirmation mailing—or joint leads—generate between 75,000-80,000 male recruiting prospects annually. DOD, through JAMRS, purchases similar databases for information about enlistment-eligible women. Although most registrations are now completed automatically through other interactions with the federal or state government, some contend that the very act of registering would make young women more aware of their citizenship duties, thus broadening the percentage of qualified women considering a career in the military. From certain theological or moral perspectives, some say that it is wrong for women to serve in combat roles, and since a draft would most likely be used to fill positions for combat operations, women should be exempt from registering. These arguments resonate with a segment of the U.S. population, and polling data suggest that if women were required to register for the draft, it would significantly increase public opposition to reinstating the draft and could affect public support for engaging in any conflict that has the potential to escalate beyond the capability of the all-volunteer force. Including women in the registration process may require some additional budget resources for the SSS due to increased administrative processing and public awareness needs. Currently there are about 11 million women ages 18-26 who would be eligible to register under the statutory age requirement. In January of 2016, the SSS reported to the White House Office of Management and Budget that it would need about $8.5 million more for the first year of registering women and slightly less in the following several years. As previously discussed, some have suggested that the future threats that the United States may face may require rapid mobilization of those with specialized skills and experience (e.g., engineers, coders, truck drivers). Congress could expand the current SSS registration system to collect data on degrees, licenses, or other certifications. It could also be extended to include these types of experts outside of the 18- to 26-year-old age range. For example, Norway operates a peacetime conscription registration system in this fashion. All Norwegian citizens in a conscription cohort (men and women, age 17) are required to fill out an online questionnaire that helps to determine their relevant skills, eligibility for, and interest in military service. Based on the results of this questionnaire, the armed forces calls in about 22,000 individuals to "Session Part 2" to determine fitness for service through physical and psychological tests. Selection boards choose individuals for a mandatory 12-month service obligation based on the armed forces' needs for various skills. DOD has also pointed to the Health Care Professional Delivery System (HCPDS), currently a congressionally mandated standby plan , as a potential model for a registration/draft system by specialty. The HCPDS, if activated, would require registration of all health care workers between the ages of 20 and 45. DOD's 2017 report to Congress considered what a "mobilization by military occupational specialty (MOS)" might require. The benefit of establishing an enhanced registration system would be to allow rapid acquisition of personnel with necessary expertise through a targeted draft. This type of data collection could also support targeted recruiting. Should a draft ever be reinstated, available information on individual qualifications could also shorten the timeline needed to train personnel in certain specialties and could support more efficient alternative service matching with employers for those who are conscientious objectors. The challenges with pursuing this option for the SSS would be increased administration costs to maintain, update, and enforce reporting for such a database. In addition, some may oppose such a proposal due to privacy or civil liberty concerns.
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The Military Selective Service Act (MSSA), first enacted as the Selective Service Act of 1948, provides the statutory authority for the federal government to maintain a Selective Service System (SSS) as an independent federal agency responsible for delivering appropriately qualified civilian men for induction into the Armed Forces of the United States as authorized by Congress. The annual budget for the agency is just under $23 million. One of the SSS's main functions is to maintain a database of registrants in case of a draft. The agency stores approximately 78 million records in order to verify registration status and eligibility for certain benefits that require certification of registration for eligibility. The SSS has a staff of about 124 full-time employees, complemented by a corps of volunteers and military reservists. The MSSA requires most males between the ages of 18 and 26 who are citizens or residents of the United States to register with Selective Service. Women in the United States have never been required to register for the draft. Men who fail to register may be subject to criminal penalties, loss of eligibility for certain federal or state employment opportunities and education benefits, and denial of security clearances. Documented or undocumented immigrants who fail to register may not be able to obtain United States citizenship. Registration compliance rates were 92% in calendar year 2016. While individuals may still register at U.S. post offices, the SSS attributes high compliance rates to a system of automatic electronic registration supported by state legislation and interagency cooperation. The MSSA does not currently authorize the use of a draft for induction into the Armed Forces. When the draft has been implemented, it has met some public resistance. Such resistance to the draft drives much of the opposition toward maintaining the SSS and the registration requirement. Even some who are not opposed to the government's use of conscription in a time of national need are opposed to maintaining the current SSS agency infrastructure. They argue that a stand-alone agency is unnecessary and expensive and that there are a number of alternatives that could more effectively and efficiently enable the country to reestablish conscription, if necessary. Others counter that, at the cost of $23 million annually, maintaining the SSS is a relatively inexpensive insurance policy should the draft need to be quickly reinstated. They also argue that maintaining the SSS sends a signal to potential adversaries that the United States is willing to draw on its full national resources for armed conflict if necessary. Some are concerned that the registration requirements are inequitable, arguing that it is unfair to men that women can voluntarily serve in all military occupations but are exempt from the registration requirement and the prospect of being drafted. In addition, some have raised concerns about the statutory penalties for failing to register and whether these penalties are more likely to be levied on vulnerable groups. Some contend that Congress should amend MSSA and associated statute to remove penalties for failing to register. Others argue that weakening or removing penalties would cause registration compliance rates to fall to unacceptably low levels. In response to these issues, Congress has established a National Commission on Military, National, and Public Service to provide research support and recommendations on the future of the SSS.
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Since the onset of the nation's civil war and ensuing military coup d'état in 1962, Burma's military, or Tatmadaw, and its associated security forces, such as the Border Guard Police and the Myanmar Police Force, have been repeatedly accused of committing murder, rape, and torture against the nation's various ethnic minorities. Between 1990 and 2008, Congress passed legislation imposing various sanctions on Burma in part due to the serious human rights violations committed by and/or authorized by the Tatmadaw. Such allegations of intentional, pervasive, and systematic abuses arose again following the forced displacement of over 700,000 Rohingya from Burma's Rakhine State in late 2017, as well as the Tatmadaw's renewed offensive against ethnic armed groups in Kachin, Karen, and Shan States (see map in the Appendix ). The Trump Administration has described that Tatmadaw's assault on the Rohingya as "ethnic cleansing" and has applied "limited targeted sanctions" on five Tatmadaw officers and two military units. On December 13, 2018, the House of Representatives passed H.Res. 1091 (116 th Congress) by a vote of 394-1, stating "the atrocities committed against the Rohingya by the Burmese military and security forces since August 2017 constitute crimes against humanity and genocide" and calling on the Secretary of State to "determine, based on available evidence, whether the actions by the Burmese military in northern Rakhine State in 2017 constitute crimes against humanity, genocide, or other crimes under international law." Various organizations—including the United Nations Independent International Fact-Finding Mission in Myanmar (UNFFM), multiple human rights organizations, and the press—have conducted investigations into allegations that Burmese security forces committed serious human rights violations in Burma's seven ethnic states since the Tatmadaw transferred power to a mixed civilian/military government in 2011. These organizations have released at least 17 reports documenting evidence that appears to support some of these allegations, and implicates specific Burmese security personnel and units as being responsible for the abuses. In addition to concluding that Burmese security forces were responsible for serious human rights violations, at least two of these reports maintain that the violations were intentional, premeditated, and systemic. Certain Burmese officers and units also appear in more than one report, and in some cases, are identified as being responsible for human rights violations in more than one ethnic state and/or at different times. The reports vary in their conclusions on the severity of the abuses. Some conclude that certain violations may constitute genocide; in other cases, some describe possible war crimes or crimes against humanity. This report compiles a list—in tabular form—of the Burmese security personnel and units that have been identified as responsible for serious human rights violations by one or more the following reports: 1. Amnesty International, "All the Civilians Suffer: Conflict, Displacement, and Abuse in Northern Myanmar," June 2017; 2. Amnesty International, "We Will Destroy Everything: Military Responsibility for Crimes Against Humanity in Rakhine State, Myanmar," June 2018; 3. Fortify Rights, "They Gave Them Long Swords: Preparations for Genocide and Crimes Against Humanity against Rohingya Muslims in Rakhine State, Myanmar," July 2018; 4. Human Rights Watch, "All My Body Was Pain: Sexual Violence against Rohingya Women and Girls in Burma," November 2017; 5. Human Rights Watch, "Massacre by the River: Burmese Army Crimes against Humanity in Tula Toli," December 2017; 6. Kachin Women's Association in Thailand, "A Far Cry from Peace: Ongoing Burma Army Offensives and Abuses in Northern Burma under the NLD Government," November 2016; 7. Kachin Women's Association in Thailand, "State Terror in the Kachin Hills: Burma Army Attacks against Civilians in Northern Burma," November 16, 2017; 8. Karen Human Rights Group, "Ongoing Militarisation in Southeast Myanmar," October 2016; 9. Legal Aid Network and Kachin Women's Association in Thailand, "Justice Delayed, Justice Denied: Seeking Truth about Sexual Violence and War Crime Case in Burma," January 2016; 10. Network for Human Rights Documentation—Burma, "Report on the Human Rights Situation in Burma, January–December 2017," March 2018; 11. Physicians for Human Rights, "Please Tell the World What They Have Done to Us: The Chut Pyin Massacre: Forensic Evidence of Violence against the Rohingya in Myanmar," July 2018; 12. Refugees International, "Suffering in Shadows: Aid Restrictions and Reductions Endanger Displaced Persons in Northern Myanmar," December 2017; 13. Simon Lewis, Zeba Siddiqui, Clare Baldwin, and Andrew R.C. Marshall, "Tip of the Spear," Reuters, June 26, 2018; 14. Ta'ang Women's Organization, "Trained to Torture: Systematic War Crimes by the Burma Army in Ta'ang Areas of Northern Shan State (March 2011–March 2016)," June 2016; 15. United Nations Fact-Finding Mission on Myanmar, "Report of the Independent International Fact-Finding Mission on Myanmar" (Advanced Unedited Version), August 24, 2018; 16. Women's League of Burma, "If They Had Hope, They Would Speak: The On-going Use of State-Sponsored Sexual Violence in Burma's Ethnic Communities," November 2014; and 17. Women's League of Burma, "Long Way to Go: Continuing Violations of Human Rights and Discrimination Against Ethnic Women in Burma," July 2016. CRS did not independently confirm the veracity of the findings in these reports. The UNFFM report recommends that the United Nations Security Council (UNSC) refer the human rights abuse allegations to the International Criminal Court (ICC) for investigation and possible prosecution. The report specifically identifies six Burmese military leaders—Commander-in-Chief Senior General Min Aung Hlaing; Deputy Commander-in-Chief Vice Senior General Soe Win; Commander, Bureau of Special Operations-3, Lieutenant General Aung Kyaw Zaw; Commander, Western Regional Military Command, Major General Maung Maung Soe; Commander, 33 rd Light Infantry Division, Brigadier General Aung Aung; and Commander, 99 th Light Infantry Division, Brigadier General Than Oo—as warranting investigation and possible prosecution by the ICC. The UNFFM also calls for the creation of an independent, impartial mechanism to collect, consolidate, preserve and analyse evidence of violations of international humanitarian law and human rights violations and abuses and to prepare files to facilitate and expedite fair and independent criminal proceedings in national, regional or international courts or tribunals. In addition, the UNFFM recommends the UNSC "should adopt targeted individual sanctions, including travel bans and asset freezes, against those who appear most responsible for serious crimes under international law" and impose an arms embargo on Burma. The Department of State has conducted a preliminary investigation into alleged human rights abuses in Rakhine State. According to an article in Politico , there was sharp disagreement within the State Department on whether to categorize the Tatmadaw's attacks on the Rohingya as genocide or crimes against humanity. On August 28, 2018, then-U.S. Ambassador to the United Nations Nikki Haley presented to the U.N Security Council some of the details of a then unreleased version of the State Department's report. She stated, "The results are consistent with the recently-released UN independent international fact-finding mission on Burma." Among the details Haley mentioned were the following: The investigation involved interviews with 1,024 Rohingya refugees in camps in Bangladesh's Cox's Bazar region; 82% of the refugees witnessed the killing of a Rohingya; 51% witnessed sexual violence; and 20% witnessed violence against 100 or more people; and Burmese military and security forces were the perpetrators "of the overwhelming majority of these crimes." On September 24, 2018, the State Department posted online a 20-page publication entitled Documentation of Atrocities in Northern Rakhine State . The State Department issued no press release or statement regarding the release of the summary. According to the publication's executive summary, "the vast majority of Rohingya refugees experienced or directly witnessed extreme violence and the destruction of their homes." The summary also concluded "that the recent violence in northern Rakhine State was extreme, large-scale, widespread, and seemingly geared toward both terrorizing the population and driving out the Rohingya residents." The publication is generally consistent with Ambassador Haley's statement before the UNSC, but did not indicate if the State Department considers the atrocities to be genocide, crimes against humanity, and/or war crimes. On July 30, 2018, President Win Myint appointed former Philippine Deputy Foreign Minister Rosario Manalo; former Japanese Ambassador to the U.N. Kenzo Oshima; the chief coordinator of the Union Enterprise for Humanitarian Assistance, Resettlement and Development in Rakhine, Aung Tun Thet; and the former chair of Myanmar's Constitutional Tribunal, Mya Thein, to head the Independent Commission of Enquiry (ICOE), which "will investigate the allegations of human rights violations and related issues, following the terrorist attacks by ARSA." President Win Myint's announcement did not indicate any deadline for the commission to complete its investigation. Deputy Commander-in-Chief Vice Senior General Soe Win reportedly said, "the military is on standby to offer full cooperation with the commission." The ICOE visited Rakhine State on December 21, 2018, as part of its investigation. Manalo reportedly stated during the visit, "We are gathering the truth. Fake news should not be believed. Everything should be based on evidence." The ICOE also set a deadline of January 31, 2019, for people to submit evidence of the commission of human rights abuses. Since Burma's security forces began its "clearance operations" in August 2017, Commander-in-Chief Senior General Min Aung Hlaing has repeatedly denied that his troops committed human rights abuses in Rakhine State, or elsewhere in Burma. On February 15, 2019, Min Aung Hlaing told Asahi Shimbun that "there is no certain proof that the national army was involved in the persecution" of Rohingya." He also said that such accusations "hurts the nation's dignity." Besides the United States, Australia, Canada, and the European Union have imposed sanctions on Burmese military or security officers responsible for human rights violations in Burma (see Table 1 ). The European Union placed sanctions on seven Burmese security officers on June 25, 2018, and another seven officers on December 21, 2018. On June 25, 2018, Canada placed sanctions on the same seven officers as the EU. On October 5, 2018, Australia placed financial sanctions of five Burmese security officers. Three people appear on all four lists—Lt. General Aung Kyaw Zaw, Major General Khin Maung Soe, and Major General Maung Maung Soe. Two officers, Brigadier General Aung Aung and Brigadier General Than Oo, have been sanctioned by Australia, Canada, and the EU, but not the United States. The following tables list the names of Burmese security force officers ( Table 2 ) and units ( Table 3 ) that have been identified in one or more of the reports mentioned above as being responsible for human rights violations in Burma since 2011. For purposes of this report, the "types of responsibility" include the following: Authorization —Authorized and/or ordered other security personnel to commit human rights abuses on Burmese civilians; Commission —Committed the human rights abuses and/or took no action to prevent the commission of human rights abuses; and Cover-up —Became aware of credible allegations that security personnel under their command had committed or were committing human rights violations, but took no action to stop the further commission of human rights violations; attempted to conceal alleged human rights violations by Burmese security personnel; and/or tried to prevent or undermine investigations or prosecutions of alleged human rights violations by Burmese personnel. With regard to the type of human rights violation committed, this report classifies them into six categories Arbit rary arrest —includes the arrest and/or detention of civilians without discernible evidence that the civilians had committed some crime; Attacks on civilians —includes intentional assaults of civilians and attacks conducted with a disregard for the potential of causing harm to civilians; Extrajudicial killing —includes the intentional killing of civilians and the killing of civilians during military attacks conducted with a disregard for the potential of causing harm to civilians; Forced labor —includes forcing civilians to carry military equipment or supplies, to serve as "human shields" for military units, and/or to use civilians as human "landmine detectors"; Sexual violence —includes rape, attempted rape, and other forms of sexual assault; and Torture —includes torture and/or the physical abuse of civilians. While the military personnel and units listed in the tables have not been proven to be responsible for human rights abuses, their identification in one or more of the reports listed above may indicate that there is reason for further investigation of the allegations. Information in the tables suggests certain patterns about the human rights abuse allegations, including the following: Pervasive and systemi c abuse by Tatmadaw — Table 3 includes more than 100 military units, including 3 Regional Operations Commands, 6 infantry divisions, and more than 90 infantry battalions, indicating that alleged human rights abuse is not limited to a few "troubled" units; Geographically pervasive —The reports link certain military units with similar human rights abuses in all of Burma's ethnic minority states—Chin, Kachin, Karen (Kayin), Karenni (Kayah), Mon, Rakhine, and Shan; "Trouble d " units —The reports repeatedly implicate certain units in abuses, including the following: Infantry Division 33 —This unit is identified in six reports, involving a variety of alleged abuses in the States of Kachin, Rakhine and Shan; Infantry Division 99 —This unit is also identified in six reports, involving a variety of alleged abuses in the States of Kachin, Rakhine, and Shan; and Infantry Battalions 324, 502, 503 and 567 —These units were identified in three different reports as committing a variety of human rights abuses. The extensive list of reports alleging that Burma's security forces have committed genocide, crimes against humanity, and/or war crimes has reinforced calls for some form of accountability mechanism to investigate and possibly prosecute the perpetrators of the alleged abuses. Many of the reports and various human rights organizations have proposed various accountability mechanisms, including referral to the International Criminal Court (ICC), the creation of an ad hoc international criminal tribunal, the imposition of U.N. sanctions, and the enactment of bilateral restrictions on relations with the Burmese government and/or the Burmese military. The Rome Statute of the International Criminal Court, which entered into force on July 1, 2002, established the procedures by which cases can be referred to the ICC's Prosecutor for investigation and possible prosecution. Bangladesh (see below) is a party to the Rome Statute; Burma is not. Article 13(b) states the ICC may exercise jurisdiction if "one or more of such crimes appears to have been committed is referred to the Prosecutor by the Security Council acting under Chapter VII of the Charter of the United Nations." To date, the Security Council has referred one case under Article 13(b), that of the situation in Darfur, Sudan, in 2005. Under Article 27 of the U.N. Charter, nonprocedural decisions of the UNSC, including a referral of a case to the ICC, "shall be made by an affirmative vote of nine members including the concurring votes of the permanent members." The five permanent members of the UNSC are China, France, Russia, the United Kingdom, and the United States; the current 10 nonpermanent members are Bolivia, Cote d'Ivoire, Equatorial Guinea, Ethiopia, Kazakhstan, Kuwait, the Netherlands, Peru, Poland, and Sweden. Many observers expect China, and possibly Russia, to veto any proposed referral to the ICC. When asked if the United Kingdom would support a referral to the ICC during his visit to Burma in late September 2018, the U.K.'s Foreign Secretary Jeremy Hunt indicated that his government was considering "a number of different options." France has not issued any public statement on a possible UNSC resolution to refer the case to the ICC. The Trump Administration's position on the possible referral to the ICC is uncertain. In her August 25, 2018, statement to the UNSC, Ambassador Haley said, "Here in the Security Council, we must hold those responsible for violence to account." She also commended Kuwait, the Netherlands, Peru, and the United Kingdom for working "to keep the Security Council's focus on the atrocities in Burma." National Security Advisor John Bolton, however, gave a speech on September 10, 2018, stating the Administration's policy toward the ICC, in which he said, "We will not cooperate with the ICC. We will provide no assistance to the ICC. We will not join the ICC. We will let the ICC die on its own. After all, for all intents and purposes, the ICC is already dead to us." Bolton did not make any reference the Burma situation. In April 2018, ICC Prosecutor Fatou Bensouda asked the ICC Pre-Trial Chamber to determine whether the Court may exercise jurisdiction over the forced deportation of Rohingya from Burma into Bangladesh, which the Prosecutor argued constituted a crime against humanity. The Prosecutor argued that because forced deportation of Rohingya occurred partially on the territory of Bangladesh (a state party to the Rome Statute), the Court may exercise jurisdiction over the crimes. On September 6, 2018, the Pre-Trial Chamber agreed, deciding that the ICC Prosecutor can begin a preliminary investigation into the situation in Bangladesh, opening the possibility of prosecuting Burmese officials. On September 18, 2018, ICC Prosecutor Bensouda announced that she was initiating the preliminary investigation, which will also take into account "a number of alleged coercive acts" that resulted in the forced displacement, including killings, sexual violence, enforced disappearances, and the destruction of property. Her office is to also consider if other crimes under Article 7 of the Rome Statute ("Crimes Against Humanity") may be applicable. A preliminary examination team from the ICC is scheduled to visit Bangladesh in March 2019. Bangladesh Prime Minister Sheikh Hasina has said that her government will cooperate with the ICC team. Burma rejected the Pre-Trial Chamber's decision, and has stated it will not assist the ICC investigation. A possible alternative to the ICC could be the creation of an ad hoc International Criminal Tribunal (ICT) to investigate and potentially prosecute perpetrators of human rights abuses in Burma. Such a tribunal was established by the UNSC on May 25, 1993, "for the sole purpose of prosecuting persons responsible for serious violations of international humanitarian law committed in the territory of the former Yugoslavia between 1 January 1991 and a date to be determined by the Security Council upon the restoration of peace." The UNSC established another ICT on November 8, 1994, "for the sole purpose of prosecuting persons responsible for genocide and other serious violations of international humanitarian law committed in the territory of Rwanda and Rwandan citizens responsible for genocide and other such violations committed in the territory of neighbouring States, between 1 January 1994 and 31 December 1994." In addition, the UNSC previously has established Special Courts in Cambodia, East Timor, Lebanon, and Sierra Leone to adjudicate cases of alleged human rights violations in those four nations. In general, the UNSC has stipulated the scope of the International Criminal Tribunal or Special Court, including the time period to be considered. The Special Courts were set up with the support of the government of the nation in question, whereas the two ICTs were created when the government of the nation in question was unable or unwilling to undertake the criminal proceedings. On September 28, 2018, the U.N. Human Rights Council (UNHRC) approved a resolution that establishes an "ongoing independent mechanism to collect, consolidate, preserve and analyse evidence of the most serious international crimes and violations of international law committed in Myanmar since 2011" by a vote of 35 in favor, 3 opposed, and 7 abstentions. The three nations voting against the proposal were Burundi, China, and the Philippines. Japan was one of the seven nations that abstained. The UNHRC resolution instructs the mechanism to Prepare files in order to facilitate and expedite fair and independent criminal proceedings, in accordance with international law standards, in national, regional or international courts or tribunals that have or may in the future have jurisdiction over these crimes, in accordance with international law. The mechanism also is to have access to the information collected by the UNFFM, be able to continue to collect evidence, and be provided the capacity to document and verify relevant information and evidence. The UNHRC requested that U.N. Secretary-General Antonio Guterres appoint "the staff of the mechanism as expeditiously as possible" and "allocate the resources necessary for the implementation of the present resolution." The resolution also extended the mandate of the UNFFM "until the new mechanism is operational." The UNFFM had recommended the creation of "an independent, impartial mechanism to collect, consolidate, preserve and analyze evidence of violations of international humanitarian law and human rights violations and abuses and to prepare files to facilitate and expedite fair and independent criminal proceedings in national, regional or international courts or tribunals." It also stated the mechanism "could resemble the 'International, Impartial and Independent Mechanism [IIIM] to Assist in the Investigation and Prosecution of Persons Responsible for the Most Serious Crimes under International Law Committed in the Syrian Arab Republic since March 2011,' created by United Nations General Assembly resolution 71/248," which was adopted in December 2016. Various human rights organizations have also expressed support for the creation of such a mechanism. In December 2018, the U.N. General Assembly approved $26.7 million to fund the "independent, impartial mechanism." The Trump Administration has not indicated its position on the establishment of an "independent, impartial mechanism" for Rakhine State, but it has demonstrated its support for the IIIM. In February 2018, Ambassador Haley stated the following: The United States has also announced that we will contribute to the International, Impartial, and Independent Mechanism on international crimes committed in Syria—the IIIM. The United States strongly supports the IIIM as a valuable tool to hold the Assad regime accountable for its atrocities, including its repeated and ongoing use of chemical weapons. In FY2018, the United States provided nearly $350,000 in support of the IIIM. The 116 th Congress appropriated funds in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) for investigation and documentation of alleged human rights violations in Burma, but not explicitly for an "independent, impartial mechanism." Section 7043(a) included the following provisions: Bilateral Economic Assistance.—… (B) USES.—Funds appropriated under title III of this Act for assistance for Burma—… (vi) shall be made available for programs to investigate and document allegations of ethnic cleansing and other gross violations of human rights committed against the Rohingya people in Rakhine state: Provided , That such funds shall be in addition to funds otherwise made available for such purposes; (vii) shall be made available for programs to investigate and document allegations of gross violations of human rights committed in Burma, particularly in areas of conflict. The House committee report that accompanied the act ( H.Rept. 116-9 ) allocated $3.0 million out of the $82.7 million Economic Support Fund for Burma for "Documentation of human rights violations against Rohingya," and $0.75 million for "Documentation of human rights violations in Burma." The report further stipulated that funds made available for programs to investigate and document allegations of ethnic cleansing and other gross violations of human rights committed against the Rohingya people in Rakhine state shall be made available for civil society organizations in Bangladesh and Burma. Prior to the obligation of any such funds, the Assistant Secretary for DRL shall ensure the establishment of a standard documentation format and documentation procedures for use by such organizations, and shall identify an appropriate repository for such information. It also specified that funds made available for programs to investigate and document allegations of gross violations of human rights committed in Burma shall be made available for civil society and international organizations, including those in countries bordering Burma. The UNFFM and various human rights organizations have recommended that the UNSC impose sanctions on Burma independent of any ICC or ad hoc international tribunal prosecution. Among the possible U.N. sanctions proposed are a global arms embargo; travel bans and the freezing of assets of senior Burmese government and military officials; and a prohibition of trade and/or investment with businesses owned or controlled by the Burmese military, its senior officers, or their families. The UNSC has imposed sanctions in response to human rights violations, among other factors, in other countries, including the Central African Republic, Haiti, Rwanda, South Africa, South Sudan, Sudan, and the former Yugoslavia. The UNSC sanctions have included, in some cases, arms embargoes, travel bans, and the freezing of assets. Another accountability option that has been suggested is for individual nations to impose appropriate sanctions on Burma. The United States currently has some restrictions on relations with Burma, and the Trump Administration has announced some additional restrictions in response to the alleged human rights abuses in Rakhine State, including the imposition of visa and economic restrictions on five Burmese military officers and two military units under the authority of the Global Magnitsky Act (see above). The Trump Administration could potentially sanction additional individuals and units it determines are responsible for serious human rights violations under the authority of the Global Magnitsky Act. If the Trump Administration were to determine that the alleged human rights abuses that occurred in Rakhine State or elsewhere in Burma constituted genocide, then the United States has the authority to prosecute alleged offenders under the provisions of the Human Rights Enforcement Act of 2009 ( P.L. 111-122 ; 18 U.S.C. 1091). The act criminalizes the act of genocide and subjects the offender to a possible death sentence, life in prison, and a fine of "not more than $1,000,000." The act grants U.S. jurisdiction to the case under certain conditions, including if "the alleged offender is present in the United States," regardless of where the offense was committed. The United States is a party to the Convention on the Prevention and Punishment of the Crime of Genocide. Article V of the convention states the following: The Contracting Parties undertake to enact, in accordance with their respective Constitutions, the necessary legislation to give effect to the provisions of the present Convention, and, in particular, to provide effective penalties for persons guilty of genocide or any of the other acts enumerated in article III. Article VII requires that "(t)he Contracting Parties pledge themselves in such cases to grant extradition in accordance with their laws and treaties in force." Bangladesh, Burma, and the United States are parties to the Convention. Prior to the events in Rakhine State, the United States had maintained several types of restrictions on relations with Burma, including restrictions on the issuance of visas to Burmese government and military officials; limits on bilateral and multilateral economic assistance; and prohibition on the sale of U.S. military equipment. In addition, Section 7043(a)(1)(C) of the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) stated that FY2019 bilateral economic assistance (i) may not be made available to any individual or organization if the Secretary of State has credible information that such individual or organization has committed a gross violation of human rights, including against Rohingya and other minority groups, or that advocates violence against ethnic or religious groups or individuals in Burma; and (ii) may not be made available to any organization or entity controlled by the armed forces of Burma. Other restrictions on relations are currently being waived under the authority of presidential executive orders or presidential determinations. These include a general ban on the import of goods from Burma; a ban on the import of Burmese jadeite and rubies, and products containing Burmese jadeite and rubies; a ban on the import of goods from certain Burmese companies; the "freezing" of the assets of certain Burmese nationals; a prohibition on providing financial services to certain Burmese nationals; restrictions on U.S. investments in Burma; restrictions on bilateral assistance to Burma; and restrictions on U.S. support for multilateral assistance to Burma. In addition, former President George H.W. Bush suspended Burma's benefits under the U.S. Generalized Systems of Preferences (GSP) program on April 13, 1989, as part of Presidential Proclamation 5955. Former President Obama restored Burma's GSP benefits on September 14, 2016, via Presidential Proclamation 9492. Any of these waived past restrictions, including the suspension of GSP benefits, could be reinstated by President Trump without the involvement of Congress. Congress has various options on how it may respond to the alleged human rights violations in Burma. Legislation has been introduced to modify U.S. policy in Burma, in part to address the alleged human rights abuses. Resolutions have also been introduced expressing congressional views on events in Burma, and calling for changes in U.S. policy. Over the last few years, Congress has also included Burma-related provisions in pending appropriation legislation to shape U.S. policy in Burma. Congress has also demonstrated its ongoing interest in Burma, and the importance of U.S. policy in Burma, by holding several hearings to learn more about developments in Burma and discuss policy options. Several congressional delegations have traveled to Bangladesh and Burma to directly investigate the situation and express to Burma's leaders the importance of the human rights violations allegations to Congress. Whatever additional actions or measures, if any, Congress takes to address the alleged human rights violations in Burma will likely be influenced by other elements of bilateral relations, as well as regional concerns such as China's growing influence in Southeast Asia. Some Members of Congress and the Trump Administration view Burma as undergoing a fragile and difficult transition from an oppressive military dictatorship to a potentially democratic, civilian-run federated state, and are concerned that imposing additional restrictions on relations with Burma could undermine that transition. Other Members of Congress and Administration officials see the human rights abuses in Kachin, Karen, Rakhine, and Shan States as proof that the Tatmadaw's leaders have no intention of permitting such a transition to occur. In the 115 th Congress, two bills were introduced pertaining to U.S. policy in Burma with provisions related to the alleged human rights violations—the Burma Unified through Rigorous Military Accountability (BURMA) Act of 2018 ( H.R. 5819 ) and the Burma Human Rights and Freedom Act of 2018 ( S. 2060 ). Both bills would have imposed a visa ban on senior military officers involved in human rights abuses in Burma, placed new restrictions on security assistance and military cooperation, and required U.S. opposition to international financial institution (IFI) loans to Burma if the project involves an enterprise owned or directly or indirectly controlled by the military of Burma. S. 2060 also would have required the President to review Burma's eligibility for the Generalized System of Preferences (GSP) program. The House Committee on Foreign Affairs, on May 17, 2018, ordered H.R. 5819 to be reported favorably out of committee, with an amendment in the nature of a substitute, and agreed to seek consideration under suspension of the rules. The Senate Committee on Foreign Relations reported S. 2060 favorably out of committee on February 12, 2018, with an amendment in the nature of a substitute, but the bill never received floor action by the Senate. Ten separate resolutions in the House or Senate pertaining to Burma were introduced during the 115 th Congress; one passed. In the 116 th Congress, one Burma-related resolution has been introduced, S.Res. 34 , that resolves that the Senate (among other things): condemns the violence and displacement inflicted on Burma's Rohingya and other ethnic minorities; and urges the Secretary of State to make a determination whether the actions by the Myanmar military constitute crimes against humanity or genocide and to work with interagency partners to impose targeted sanctions on Myanmar military officials, to include Senior General Min Aung Hlaing, responsible for these heinous acts through existing authorities. As previously described, the 116 th Congress included provisions in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) placing restrictions on the provision of bilateral economic assistance, international security assistance, and multilateral assistance to Burma. Similar provisions could be included in the appropriations legislation for the Department of Defense and the Department of State for FY2020. Since September 2017, Congress has held several hearings on Burma, including the following: A House Committee on Foreign Affairs hearing on September 26, 2018, entitled, "Genocide Against the Burmese Rohingya." A House Committee on Foreign Affairs hearing on October 4, 2017, entitled, "The Rohingya Crisis: U.S. Response to the Tragedy in Burma." A House Committee on Foreign Affairs Subcommittee on Asia and the Pacific hearing on September 27, 2017, entitled, "Burma's Brutal Campaign Against the Rohingya." A Senate Committee on Foreign Relations hearing on October 24, 2017, entitled, "Assessing U.S. Policy Towards Burma: Geopolitical, Economic, and Humanitarian Considerations." A Tom Lantos Human Rights Commission hearing on July 25, 2018, entitled, "Victims' Rights in Burma." At all of these hearings, most of the Members of Congress present indicated that they view the acts of Burma's security forces in Rakhine State and elsewhere in Burma as either genocide or crimes against humanity. Many also stated that the Trump Administration's response to date has been inadequate given the severity of the human rights abuses. Congress may also consider sending congressional delegations and staff delegations to Bangladesh and Burma to investigate the alleged human rights violations and ascertain the views of the alleged victims on what forms of accountability should be pursued. These delegations could also meet with Burmese government officials and Burmese military leaders to hear their perspectives of the human rights allegations, and to express the delegation's opinion on what measures the Burmese government and military should make to investigate and possibly prosecute those individuals, military units, and organizations that have been accused of committing genocide, crimes against humanity, and war crimes in Burma.
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At least 17 different reports by United Nations (U.N.) entities and independent human rights organizations have been released containing allegations that certain Burmese security force officers and units committed serious human rights violations dating back to 2011. These reports name nearly 40 individuals and over 100 security units as responsible for such gross human rights violations as murder, torture, rape and other forms of sexual violence, and forced labor. Some of these individuals, including Commander-in-Chief Senior General Min Aung Hlaing, were identified in four or more of the reports. Similarly, some of the security units, in particular Infantry Division 33 and Infantry Division 99, were cited by six or more of the reports. The reports suggest that the commission of human rights abuses by Burma's security forces is pervasive, systematic, and endemic. CRS did not independently verify the credibility of these reports. The Trump Administration has labeled the alleged human rights violations as "ethnic cleansing" and has imposed "limited targeted sanctions" on five Burmese military officers and two military units it considers responsible for serious human rights violations against the Rohingya in Burma's Rakhine State. In August 2018, the State Department released a report summarizing the results of a survey of Rohingya refugees in Bangladesh that concluded that "the vast majority of Rohingya refugees experienced or directly witnessed extreme violence and the destruction of their homes." The report also stated "that the recent violence in northern Rakhine State was extreme, large-scale, widespread, and seemingly geared toward both terrorizing the population and driving out the Rohingya residents." The report, however, did not indicate if the violence constituted genocide, crimes against humanity, and/or war crimes. Some Members of Congress and other observers view this response as too limited, and have called on the Trump Administration to take stronger action given the severity of the human rights abuses. The 116th Congress appropriated $3.75 million in the Consolidated Appropriations Act, 2019 (P.L. 116-6) for the documentation of human rights violations against Rohingya and others in Burma. Congress has also placed restrictions and requirements on relations with Burma in previous appropriations legislation to address human rights issues. Many of the reports advocate for some form of accountability for the reported human rights violations, including by calling for the U.N. Security Council to refer the alleged human rights violations in Burma to the International Criminal Court (ICC) or an ad hoc international criminal tribunal for investigation and possible prosecution. China and possibly Russia are likely to oppose an ICC referral, and recent statements by President Trump and National Security Advisor John Bolton suggest the United States may also oppose such a referral. The ICC's Pre-Trial Chamber had previously ruled that the ICC's Prosecutor can begin a preliminary investigation of the war crime of forced deportation of the country's Rohingya ethnic minority into neighboring Bangladesh. In the interim, the United Nations Independent International Fact-Finding Mission on Myanmar (UNFFM) has recommended that an independent international mechanism (IIM) be established to collect and preserve evidence of alleged acts of genocide, crimes against humanity, and war crimes committed in Burma since 2011. The U.N. Human Rights Council has approved the formation of an IIM, and has urged U.N. Secretary-General Antonio Guterres to appoint "the staff of the mechanism as expeditiously as possible." In addition to these measures to support some form of future criminal action against the alleged perpetrators, the UNFFM and others have expressed support for U.N. sanctions against the Burmese military and others considered responsible for the abuses. Some of the reports also call on individual nations to impose sanctions on Burma's military and its government.
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Federal land management decisions influence the U.S. economy, environment, and social welfare. These decisions determine how the nation's federal lands will be acquired or disposed of, developed, managed, and protected. Their impact may be local, regional, or national. This report discusses selected federal land policy issues that the 116 th Congress may consider through oversight, authorizations, or appropriations. The report also identifies CRS products that provide more detailed information. The federal government manages roughly 640 million acres of surface land, approximately 28% of the 2.27 billion acres of land in the United States. Four agencies (referred to in this report as the federal land management agencies, or FLMAs) administer a total of 608 million acres (~95%) of these federal lands: the Forest Service (FS) in the Department of Agriculture (USDA), and the Bureau of Land Management (BLM), U.S. Fish and Wildlife Service (FWS), and National Park Service (NPS), all in the Department of the Interior (DOI). Most of these lands are in the West and Alaska, where the percentage of federal ownership is significantly higher than elsewhere in the nation (see Figure 1 ). In addition, the Department of Defense administers approximately 11 million acres in military bases, training ranges, and more; and numerous other agencies administer the remaining federal acreage. The federal estate also extends to energy and mineral resources located below ground and offshore. BLM manages the federal onshore subsurface mineral estate. The Bureau of Ocean and Energy Management (BOEM), also in DOI, manages access to about 1.7 billion offshore acres located beyond state coastal waters, referred to as U.S. offshore areas or the outer continental shelf (OCS). Not all of these acres can be expected to contain extractable mineral and energy resources, however. Federal land policy and management issues generally fall into several broad thematic questions: Should federal land be managed to produce national or local benefits? How should current uses be balanced with future resources and opportunities? Should current uses, management, and protection programs be replaced with alternatives? Who decides how federal land resources should be managed, and how are the decisions made? Some stakeholders seek to maintain or enhance the federal estate, while others seek to divest the federal estate to state or private ownership. Some issues, such as forest management and fire protection, involve both federal and nonfederal (state, local, or privately owned) land. In many cases, policy positions on federal land issues do not divide along clear party lines. Instead, they may be split along the lines of rural-urban, eastern-western, and coastal-interior interests. Several committees in the House and Senate have jurisdiction over federal land issues. For example, issues involving the management of the national forests cross multiple committee jurisdictions, including the Committee on Agriculture and the Committee on Natural Resources in the House, and the Committee on Agriculture, Nutrition and Forestry and Committee on Energy and Natural Resources in the Senate. In addition, federal land issues are often addressed during consideration of annual appropriations for the FLMAs' programs and activities. These agencies and programs typically receive appropriations through annual Interior, Environment, and Related Agencies appropriations laws. This report introduces selected federal land issues, many of which are complex and interrelated. The discussions are broad and aim to introduce the range of issues regarding federal land management, while providing references to more detailed and specific CRS products. The issues are grouped into these broad categories Federal Estate Ownership, Funding Issues Related to Federal Lands, Climate Policy and Federal Land Management, Energy and Minerals Resources, Forest Management, Range Management, Recreation, Other Land Designations, Species Management, and Wildfire Management. This report generally contains the most recent available data and estimates. Federal land ownership began when the original 13 states ceded title of some of their land to the newly formed central government. The early federal policy was to dispose of federal land to generate revenue and encourage western settlement and development. However, Congress began to withdraw, reserve, and protect federal land through the creation of national parks and forest reserves starting in the late 1800s. This "reservation era" laid the foundation for the current federal agencies, whose primary purpose is to manage natural resources on federal lands. The four FLMAs and BOEM were created at different times, with different missions and purposes, as discussed below. The ownership and use of federal lands has generated controversy since the late 1800s. One key area of debate is the extent of the federal estate, or, in other words, how much land the federal government should own. This debate includes questions about whether some federal lands should be disposed to state or private ownership, or whether additional land should be acquired for recreation, conservation, open space, or other purposes. For lands retained in federal ownership, discussion has focused on whether to curtail or expand certain land designations (e.g., national monuments proclaimed by the President or wilderness areas designated by Congress) and whether current management procedures should be changed (e.g., to allow a greater role for state and local governments or to expand economic considerations in decisionmaking). A separate issue is how to ensure the security of international borders while protecting the federal lands and resources along the border, which are managed by multiple agencies with their own missions. In recent years, some states have initiated efforts to assume title to the federal lands within their borders, echoing efforts of the "Sagebrush Rebellion" during the 1980s. These efforts generally are in response to concerns about the amount of federal land within the state, as well as concerns about how the land is managed, fiscally and otherwise. Debates about federal land ownership—including efforts to divest federal lands—often hinge on constitutional principles such as the Property Clause and the Supremacy Clause. The Property Clause grants Congress authority over the lands, territories, or other property of the United States: "the Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States." The Supremacy Clause establishes federal preemption over state law, meaning that where a state law conflicts with federal law, the federal law will prevail. Through these constitutional principles, the U.S. Supreme Court has described Congress's power over federal lands as "without limitations." For instance, Congress could choose to transfer to states or other entities the ownership of areas of federal land, among other options. CRS Report R42346, Federal Land Ownership: Overview and Data , by Carol Hardy Vincent, Laura A. Hanson, and Carla N. Argueta. CRS Report R44267, State Management of Federal Lands: Frequently Asked Questions , by Carol Hardy Vincent. The four FLMAs and BOEM manage most federal lands (onshore and offshore, surface and subsurface) Forest Service (FS) , in the Department of Agriculture, manages the 193 million acre National Forest System under a multiple-use mission, including livestock grazing, energy and mineral development, recreation, timber production, watershed protection, and wildlife and fish habitat. Balancing the multiple uses across the national forest system has sometimes led to a lack of consensus regarding management decisions and practices. Bureau of Land Management (BLM) , in the Department of the Interior (DOI), manages 246 million acres of public lands, also under a multiple-use mission of livestock grazing, energy and mineral development, recreation, timber production, watershed protection, and wildlife and fish habitat. Differences of opinion sometimes arise among and between users and land managers as a result of the multiple use opportunities on BLM lands. U.S. Fish and Wildlife Service (FWS) , in DOI, manages 89 million acres as part of the National Wildlife Refuge System (NWRS) as well as additional surface, submerged, and offshore areas. FWS manages the NWRS through a dominant-use mission—to conserve plants and animals and associated habitats for the benefit of present and future generations. In addition, FWS administers each unit of the NWRS pursuant to any additional purposes specified for that unit. Other uses are permitted only to the extent that they are compatible with the conservation mission of the NWRS and any purposes identified for individual units. Determining compatibility can be challenging, but the FWS's stated mission generally has been seen to have helped reduce disagreements over refuge management and use. National Park Service (NPS) , in DOI, manages 80 million acres in the National Park System. The NPS has a dual mission—to preserve unique resources and to provide for their enjoyment by the public. NPS laws, regulations, and policies emphasize the conservation of park resources in conservation/use conflicts. Tension between providing recreation and preserving resources has produced management challenges for NPS. Bureau of Ocean Management (BOEM) , also in DOI, manages energy resources in areas of the outer continental shelf (OCS) covering approximately 1.7 billion acres located beyond state waters. These areas are defined in the Submerged Lands Act and the Outer Continental Shelf Lands Act (OCSLA). BOEM's mission is to balance energy independence, environmental protection, and economic development through responsible, science-based management of offshore conventional and renewable energy resources. BOEM schedules and conducts OCS oil and gas lease sales, administers existing oil and gas leases, and issues easements and leases for deploying renewable energy technologies, among other responsibilities. CRS In Focus IF10585, The Federal Land Management Agencies , by Katie Hoover. CRS Report R42656, Federal Land Management Agencies and Programs: CRS Experts , by R. Eliot Crafton. CRS Report R45340, Federal Land Designations: A Brief Guide , coordinated by Laura B. Comay. CRS In Focus IF10832, Federal and Indian Lands on the U.S.-Mexico Border , by Carol Hardy Vincent and James C. Uzel. CRS Report R45265, U.S. Fish and Wildlife Service: An Overview , by R. Eliot Crafton. CRS Report RS20158, National Park System: Establishing New Units , by Laura B. Comay. CRS Report R43872, National Forest System Management: Overview, Appropriations, and Issues for Congress , by Katie Hoover. Congress has granted the FLMAs various authorities to acquire and dispose of land. The extent of this authority differs considerably among the agencies. The BLM has relatively broad authority for both acquisitions and disposals under the Federal Land Policy and Management Act of 1976 (FLPMA). By contrast, NPS has no general authority to acquire land to create new park units or to dispose of park lands without congressional action. The FS authority to acquire lands is limited mostly to lands within or contiguous to the boundaries of a national forest, including the authority to acquire access corridors to national forests across nonfederal lands. The agency has various authorities to dispose of land, but they are relatively constrained and infrequently used. FWS has various authorities to acquire lands, but no general authority to dispose of its lands. For example, the Migratory Bird Conservation Act of 1929 grants FWS authority to acquire land for the National Wildlife Refuge System—using funds from sources that include the sale of hunting and conservation stamps—after state consultation and agreement. The current acquisition and disposal authorities form the backdrop for consideration of measures to establish, modify, or eliminate authorities, or to provide for the acquisition or disposal of particular lands. Congress also addresses acquisition and disposal policy in the context of debates on the role and goals of the federal government in owning and managing land generally. CRS Report RL34273, Federal Land Ownership: Acquisition and Disposal Authorities , by Carol Hardy Vincent et al. Funding for federal land and FLMA natural resource programs presents an array of issues for Congress. The FLMAs receive their discretionary appropriations through Interior, Environment, and Related Agencies appropriations laws. In addition to other questions related directly to appropriations, some funding questions relate to the Land and Water Conservation Fund (LWCF). Congress appropriates funds from the LWCF for land acquisition by federal agencies, outdoor recreation needs of states, and other purposes. Under debate are the levels, sources, and uses of funding and whether some funding should be continued as discretionary. A second set of questions relates to the compensation of states or counties for the presence of nontaxable federal lands and resources, including whether to revise or maintain existing payment programs. A third set of issues relates to the maintenance of assets by the agencies, particularly how to address their backlog of maintenance projects while achieving other government priorities. CRS Report R44934, Interior, Environment, and Related Agencies: Overview of FY2019 Appropriations , by Carol Hardy Vincent. CRS Report R43822, Federal Land Management Agencies: Appropriations and Revenues , coordinated by Carol Hardy Vincent. CRS In Focus IF10381, Bureau of Land Management: FY2019 Appropriations , by Carol Hardy Vincent. CRS In Focus IF10846, U.S. Fish and Wildlife Service: FY2019 Appropriations , by R. Eliot Crafton. CRS In Focus IF10900, National Park Service: FY2019 Appropriations , by Laura B. Comay. CRS In Focus IF11178, National Park Service: FY2020 Appropriations , by Laura B. Comay. CRS In Focus IF11169, Forest Service: FY2019 Appropriations and FY2020 Request , by Katie Hoover. The Land and Water Conservation Fund Act of 1965 was enacted to help preserve, develop, and assure access to outdoor recreation facilities to strengthen the health of U.S. citizens. The law created the Land and Water Conservation Fund in the U.S. Treasury as a funding source to implement its outdoor recreation purposes. The LWCF has been the principal source of monies for land acquisition for outdoor recreation by the four FLMAs. The LWCF also has funded a matching grant program to assist states with outdoor recreational needs and other federal programs with purposes related to lands and resources. The provisions of the LWCF Act that provide for $900 million in specified revenues to be deposited in the fund annually have been permanently extended. Nearly all of the revenues are derived from oil and gas leasing in the OCS. Congress determines the level of discretionary appropriations each year, and yearly appropriations have fluctuated widely since the origin of the program. In addition to any discretionary appropriations, the state grant program receives (mandatory) permanent appropriations. There is a difference of opinion as to how funds in the LWCF should be allocated. Current congressional issues include deciding the amount to appropriate for land acquisition, the state grant program, and other purposes. Several other issues have been under debate, including whether to provide the fund with additional permanent appropriations; direct revenues from other activities to the LWCF; limit the use of funds for particular purposes, such as federal land acquisition; and require some of the funds to be used for certain purposes, such as facility maintenance. Another area of focus is the state grant program, with issues including the impact of anticipated increases in mandatory funding, the way in which funds are apportioned among the states, and the extent to which the grants should be competitive. CRS In Focus IF10323, Land and Water Conservation Fund (LWCF): Frequently Asked Questions Related to Provisions Scheduled to Expire on September 30, 2018 , by Carol Hardy Vincent and Bill Heniff Jr. CRS Report RL33531, Land and Water Conservation Fund: Overview, Funding History, and Issues , by Carol Hardy Vincent. CRS Report R44121, Land and Water Conservation Fund: Appropriations for "Other Purposes , " by Carol Hardy Vincent. As a condition of statehood, most states forever waived the right to tax federal lands within their borders. However, some assert that states or counties should be compensated for services related to the presence of federal lands, such as fire protection, police cooperation, or longer roads to skirt the federal property. Under federal law, state and local governments receive payments through various programs due to the presence of federally owned land. Some of these programs are run by specific agencies and apply only to that agency's land. Many of the payment programs are based on revenue generated from specific land uses and activities, while other payment programs are based on acreage of federal land and other factors. The adequacy, coverage, equity, and sources of the payments for all of these programs are recurring issues for Congress. The most widely applicable onshore program, administered by DOI, applies to many types of federally owned land and is called Payments in Lieu of Taxes (PILT). Each eligible county's PILT payment is calculated using a complex formula based on five factors, including federal acreage and population. Most counties containing the lands administered by the four FLMAs are eligible for PILT payments. Counties with NPS lands receive payments primarily under PILT. Counties containing certain FWS lands are eligible to receive PILT payments, and FWS also has an additional payment program for certain refuge lands, known as the Refuge Revenue Sharing program. In addition to PILT payments, counties containing FS and BLM lands also receive payments based primarily on receipts from revenue-producing activities on their lands. Some of the payments from these other programs will be offset in the county's PILT payment in the following year. One program (Secure Rural Schools, or SRS) compensated counties with FS lands or certain BLM lands in Oregon for declining timber harvests. The authorization for the SRS program expired after FY2018, and the last authorized payments are to be disbursed in FY2019. The federal government shares the revenue from mineral and energy development, both onshore and offshore. Revenue collected (rents, bonuses, and royalties) from onshore mineral and energy development is shared 50% with the states, under the Mineral Leasing Act of 1920 (less administrative costs). Alaska, however, receives 90% of all revenues collected on federal onshore leases (less administrative costs). Revenue collected from offshore mineral and energy development on the outer continental shelf (OCS) is shared with the coastal states, albeit at a lower rate. The OCSLA allocates 27% of the revenue generated from certain federal offshore leases to the coastal states. Separately, the Gulf of Mexico Energy Security Act of 2006 (GOMESA; P.L. 109-432 ) provided for revenue sharing at a rate of 37.5% for four coastal states, up to a collective cap. Some coastal states have advocated for a greater share of the OCS revenues based on the impacts oil and gas projects have on coastal infrastructure and the environment, while other states and stakeholders have contended that more of the revenue should go to the general fund of the Treasury or to other federal programs. CRS Report RL31392, PILT (Payments in Lieu of Taxes): Somewhat Simplified , by Katie Hoover. CRS Report R41303, Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000 , by Katie Hoover. CRS Report R42404, Fish and Wildlife Service: Compensation to Local Governments , by R. Eliot Crafton. CRS Report R42951, The Oregon and California Railroad Lands (O&C Lands): Issues for Congress , by Katie Hoover. CRS Report R43891, Mineral Royalties on Federal Lands: Issues for Congress , by Marc Humphries. CRS Report R42439, Compensating State and Local Governments for the Tax-Exempt Status of Federal Lands: What Is Fair and Consistent? , by Katie Hoover. The FLMAs have maintenance responsibility for their buildings, roads and trails, recreation sites, and other infrastructure. Congress continues to focus on the agencies' deferred maintenance and repairs , defined as "maintenance and repairs that were not performed when they should have been or were scheduled to be and which are put off or delayed for a future period." The agencies assert that continuing to defer maintenance of facilities accelerates their rate of deterioration, increases their repair costs, and decreases their value and safety. Congressional and administrative attention has centered on the NPS backlog, which has continued to increase from an FY1999 estimate of $4.25 billion in nominal dollars. Currently, DOI estimates deferred maintenance for NPS for FY2017 at $11.2 billion. Nearly three-fifths of the backlogged maintenance is for roads, bridges, and trails. The other FLMAs also have maintenance backlogs. DOI estimates that deferred maintenance for FY2017 for FWS is $1.4 billion and the BLM backlog is $0.8 billion. FS estimated its backlog for FY2017 at $5.0 billion, with approximately 70% for roads, bridges, and trails. Thus, the four agencies together had a combined FY2017 backlog estimated at $18.5 billion. The backlogs have been attributed to decades of funding shortfalls to address capital improvement projects. However, it is not always clear how much total funding has been provided for deferred maintenance each year because some annual presidential budget requests and appropriations documents did not identify and aggregate all funds for deferred maintenance. Currently, there is debate over the appropriate level of funds to maintain infrastructure, whether to use funds from other discretionary or mandatory programs or sources, how to balance maintenance of the existing infrastructure with the acquisition of new assets, and the priority of maintaining infrastructure relative to other government functions. CRS Report R43997, Deferred Maintenance of Federal Land Management Agencies: FY2007-FY2016 Estimates and Issues , by Carol Hardy Vincent. CRS Report R44924, The National Park Service's Maintenance Backlog: Frequently Asked Questions , by Laura B. Comay. CRS In Focus IF10987, Legislative Proposals for a National Park Service Deferred Maintenance Fund , by Laura B. Comay. Scientific evidence shows that the United States' climate has been changing in recent decades. This poses several interrelated and complex issues for the management of federal lands and their resources, in terms of mitigation, adaptation, and resiliency. Overall, climate change is introducing uncertainty about conditions previously considered relatively stable and predictable. Given the diversity of federal land and resources, concerns are wide-ranging and include invasive species, sea-level rise, wildlife habitat changes, and increased vulnerability to extreme weather events, as well as uncertainty about the effects of these changes on tourism and recreation. Some specific observed effects of climate change include a fire season that begins earlier and lasts longer in some locations, warmer winter temperatures that allow for a longer tourism season but also for various insect and disease infestations to persist in some areas, and habitat shifts that affect the status of sensitive species but may also increase forest productivity. Another concern is how climate change may affect some iconic federal lands, such as the diminishing size of the glaciers at Glacier National Park in Montana and several parks in Alaska, or the flooding of some wildlife refuges. The role of the FLMAs in responding to climate change is an area under debate. Some stakeholders are concerned that a focus on climate change adaptation may divert resources and attention from other agency activities and near-term challenges. Others see future climate conditions as representing an increased risk to the effective performance of agency missions and roles. A related debate concerns the impact of energy production on federal lands. Both traditional sources of energy (nonrenewable fossil fuels such as oil, gas, and coal) and alternative sources of energy (renewable fuels such as solar, wind, and geothermal) are available on some federal lands. A 2018 report from the U.S. Geological Survey estimated that greenhouse gas emissions resulting from the extraction and use of fossil fuels produced on federal lands account for, on average, approximately 24% of national emissions for carbon dioxide, 7% for methane, and 1.5% for nitrous oxide. In addition, the report estimated that carbon sequestration on federal lands offset approximately 15% of those carbon dioxide emissions over the study period, 2005 through 2014. This, along with other factors, has contributed to questions among observers about the extent to which the agencies should provide access to and promote different sources of energy production on federal lands based on the effects on climate from that production. Since fossil fuel emissions contribute to climate change, some stakeholders concerned about climate change assert that the agencies should prioritize renewable energy production on federal lands over traditional energy sources. Others assert that, even with renewable energy growth, conventional sources will continue to be needed in the foreseeable future, and that the United States should pursue a robust traditional energy program to ensure U.S. energy security and remain competitive with other nations, including continuing to make fossil fuel production available on federal lands. Specific legislative issues for Congress may include the extent to which the FLMAs manage in furtherance of long-term climate policy goals, and proposals to restructure or improve collaboration among the FLMAs regarding climate change activities and reporting. CRS Report R43915, Climate Change Adaptation by Federal Agencies: An Analysis of Plans and Issues for Congress , coordinated by Jane A. Leggett. Much of the onshore federal estate is open to energy and mineral exploration and development, including BLM and many FS lands. However, many NPS lands and designated wilderness areas, as well as certain other federal lands, have been specifically withdrawn from exploration and development. Most offshore federal acres on the U.S. outer continental shelf are also available for exploration and development, although BOEM has not scheduled lease sales in all available areas. Energy production on federal lands contributes to total U.S. energy production. For example, in 2017, as a percentage of total U.S. production, approximately 24% of crude oil and 13% of natural gas production came from federal lands. Coal production from federal lands has consistently accounted for about 40% of annual U.S. coal production over the past decade. Federal lands also are available for renewable energy projects. Geothermal capacity on federal lands represents 40% of U.S. total geothermal electric generating capacity. Solar and wind energy potential on federal lands is growing and, based on BLM-approved projects, there is potential for 3,300 megawatts (MW) of wind and 6,300 MW of solar energy on federal lands. The first U.S. offshore wind farm began regular operations in 2016, and BOEM has issued 13 wind energy leases off the coasts of eight East Coast states. The 116 th Congress may continue debate over issues related to access to and availability of onshore and offshore federal lands for energy and mineral development. This discussion includes how to balance energy and mineral development with environmental protection, postproduction remediation, and other uses for those federal lands. Some would like to open more federal lands for energy development, whereas others have sought to retain or increase restrictions and withdrawals for certain areas they consider too sensitive or inappropriate for traditional and/or renewable energy development. Congress also continues to focus on the energy and mineral permitting processes, the timeline for energy and mineral development, and issues related to royalty collections. Other issues may include the federal management of split estates, which occur when the surface and subsurface rights are held by different entities. Onshore oil and natural gas produced on federal lands in 2017 accounted for 5% and 9% of total U.S. oil and gas production, respectively. Development of oil, gas, and coal on federal lands is governed primarily by the Mineral Leasing Act of 1920 (MLA). The MLA authorizes the Secretary of the Interior—through BLM—to lease the subsurface rights to most BLM and FS lands that contain fossil fuel deposits, with the federal government retaining title to the lands. Leases include an annual rental fee and a royalty payment generally determined by a percentage of the value or amount of the resource removed or sold from the federal land. Congress has at times debated raising the onshore royalty rate for federal oil and gas leases, which has remained at the statutory minimum of 12.5% since the enactment of the MLA in 1920. Access to federal lands for energy and mineral development has been controversial. The oil and gas industry contends that entry into currently unavailable areas is necessary to ensure future domestic oil and gas supplies. Opponents maintain that the restricted lands are unique or environmentally sensitive and that the United States could realize equivalent energy gains through conservation and increased exploration on current leases or elsewhere. Another controversial issue is the permitting process and timeline, which the Energy Policy Act of 2005 (EPAct05) revised for oil and gas permits. An additional contested issue has been whether to pursue oil and gas development in the Arctic National Wildlife Refuge in northeastern Alaska. P.L. 115-97 , enacted in December 2017, provided for the establishment of an oil and gas program in the refuge. CRS In Focus IF10127, Energy and Mineral Development on Federal Land , by Marc Humphries. CRS Report R42432, U.S. Crude Oil and Natural Gas Production in Federal and Nonfederal Areas , by Marc Humphries. CRS Report RL33872, Arctic National Wildlife Refuge (ANWR): An Overview , by Laura B. Comay, Michael Ratner, and R. Eliot Crafton. CRS Report R43891, Mineral Royalties on Federal Lands: Issues for Congress , by Marc Humphries. Congress debates several issues regarding coal production on federal lands, including how to balance coal production against other resource values and the potential effects of coal production on issues related to climate change. Other concerns include how to assess the value of the coal resource, what is the fair market value for the coal, and what should be the government's royalty. A 2013 GAO analysis found inconsistencies in how BLM evaluated and documented federal coal leases. In addition, a 2013 DOI Inspector General report found that BLM may have violated MLA provisions by accepting below-cost bids for federal coal leases. The Obama Administration issued a new rule for the valuation of coal, which reaffirmed that the value for royalty purposes is at or near the mine site and that gross proceeds from arm's-length contracts are the best indication of market value. This rule was repealed by the Trump Administration on August 7, 2017 (to comply with Executive Order (E.O.) 13783), returning to the previous valuation rules in place. E.O. 13783 also lifted "any and all" moratoria on federal coal leasing put in place by the Obama Administration. CRS Report R44922, The U.S. Coal Industry: Historical Trends and Recent Developments , by Marc Humphries. Both BLM and FS manage land that is considered suitable for renewable energy generation and as such have authorized projects for geothermal, wind, solar, and biomass energy production. BLM manages the solar and wind energy programs on about 20 million acres for each program and about 800 geothermal leases on federal lands. Interest in renewable energy production comes in part from concern over the impact of emissions from fossil fuel-fired power plants and the related adoption of statewide renewable portfolio standards that require electricity producers to supply a certain minimum share (which varies by state) of electricity from renewable sources. Congressional interest in renewable energy resources on onshore federal lands has focused on whether to expand the leasing program for wind and solar projects versus maintaining the current right-of-way authorization process, and how to balance environmental concerns with the development and production of these resources. Geothermal Energy . Geothermal energy is produced from heat stored under the surface of the earth. Geothermal leasing on federal lands is conducted under the authority of the Geothermal Steam Act of 1970, as amended, and is managed by BLM, in consultation with FS. Wind and Solar Energy . Development of solar and wind energy sources on BLM and FS lands is governed primarily by right-of-way authorities under Title V of FLPMA. The potential wildlife impacts from wind turbines and water supply requirements from some solar energy infrastructure remain controversial. Issues for Congress include how to manage the leasing process and whether or how to balance such projects against other land uses identified by statute. Woody Biomass. Removing woody biomass from federal lands for energy production has received special attention because of biomass's widespread availability. Proponents assert that removing biomass density on NFS and BLM lands also provides landscape benefits (e.g., improved forest resiliency, reduced risk of catastrophic wildfires). Opponents, however, identify that incentives to use wood and wood waste might increase land disturbances on federal lands, and they are concerned about related wildlife, landscape, and ecosystem impacts. Other issues include the role of the federal government in developing and supporting emerging markets for woody biomass energy production, and whether to include biomass removed from federal lands in the Renewable Fuel Standard. Locatable minerals include metallic minerals (e.g., gold, silver, copper), nonmetallic minerals (e.g., mica, gypsum), and other minerals generally found in the subsurface. Developing these minerals on federal lands is guided by the General Mining Law of 1872. The law, largely unchanged since enactment, grants free access to individuals and corporations to prospect for minerals in public domain lands, and allows them, upon making a discovery, to stake (or "locate") a claim on the deposit. A claim gives the holder the right to develop the minerals and apply for a patent to obtain full title of the land and minerals. Congress has imposed a moratorium on mining claim patents in the annual Interior appropriations laws since FY1995, but has not restricted the right to stake claims or extract minerals. The mining industry supports the claim-patent system, which offers the right to enter federal lands and prospect for and develop minerals. Critics consider the claim-patent system to not properly value publicly owned resources because royalty payments are not required and the amounts paid to maintain a claim and to obtain a patent are small. New mining claim location and annual claim maintenance fees are currently $37 and $155 per claim, respectively. The federal government is responsible for managing energy resources in approximately 1.7 billion acres of offshore areas belonging to the United States (see Figure 1 ). These offshore resources are governed by the Outer Continental Shelf Lands Act of 1953 (OCSLA), as amended, and management involves balancing domestic energy demands with protection of the environment and other factors. Policymakers have debated access to ocean areas for offshore drilling, weighing factors such as regional economic needs, U.S. energy security, the vulnerability of oceans and shoreline communities to oil-spill risks, and the contribution of oil and gas drilling to climate change. Some support banning drilling in certain regions or throughout the OCS, through congressional moratoria, presidential withdrawals, and other measures. Others contend that increasing offshore oil and gas development will strengthen and diversify the nation's domestic energy portfolio and that drilling can be done in a safe manner that protects marine and coastal areas. The Bureau of Ocean Energy Management administers approximately 2,600 active oil and gas leases on nearly 14 million acres on the OCS. Under the OCSLA, BOEM prepares forward-looking, five-year leasing programs to govern oil and gas lease sales. BOEM released its final leasing program for 2017-2022 in November 2016, under the Obama Administration. The program schedules 10 lease sales in the Gulf of Mexico region and 1 in the Alaska region, with no sales in the Atlantic or Pacific regions. In January 2018, under the Trump Administration, BOEM released a draft proposed program for 2019-2024, which would replace the final years of the Obama Administration program. The program proposes 12 lease sales in the Gulf of Mexico region, 19 sales in the Alaska region, 9 lease sales in the Atlantic region, and 7 lease sales in the Pacific region. The proposed sales would cover all U.S. offshore areas not prohibited from oil and gas development, including areas with both high and low levels of estimated resources. The draft proposal is the first of three program versions; under the OCSLA process, subsequent versions could remove proposed lease sales but could not add new sales. Under the OCSLA, the President may withdraw unleased lands on the OCS from leasing disposition. President Obama indefinitely withdrew from leasing disposition large portions of the Arctic OCS as well as certain areas in the Atlantic region, but these withdrawals were modified by President Trump. Congress also has established leasing moratoria; for example, the GOMESA established a moratorium on preleasing, leasing, and related activity in the eastern Gulf of Mexico through June 2022. The 116 th Congress may consider multiple issues related to offshore oil and gas exploration, including questions about allowing or prohibiting access to ocean areas and how such changes may impact domestic energy markets and affect the risk of oil spills. Other issues concern the use of OCS revenues and the extent to which they should be shared with coastal states (see " Federal Payment and Revenue-Sharing Programs " section). BOEM also is responsible for managing leases, easements, and rights-of-way to support development of energy from renewable ocean energy resources, including offshore wind, thermal power, and kinetic forces from ocean tides and waves. As of January 2019, BOEM had issued 13 offshore wind energy leases in areas off the coasts of Massachusetts, Rhode Island, Delaware, Maryland, Virginia, New York, New Jersey, and North Carolina. In December 2016, the first U.S. offshore wind farm, off the coast of Rhode Island, began regular operations. Issues for Congress include whether to take steps to facilitate the development of offshore wind and other renewables, such as through research and development, project loan guarantees, extension of federal tax credits for renewable energy production, or oversight of regulatory issues for these emerging industries. CRS Report R44504, The Bureau of Ocean Energy Management's Five-Year Program for Offshore Oil and Gas Leasing: History and Final Program for 2017-2022 , by Laura B. Comay, Marc Humphries, and Adam Vann. CRS Report R44692, Five-Year Program for Federal Offshore Oil and Gas Leasing: Status and Issues in Brief , by Laura B. Comay. CRS Report RL33404, Offshore Oil and Gas Development: Legal Framework , by Adam Vann. Management of federal forests presents several policy questions for Congress. For instance, there are questions about the appropriate level of timber harvesting on federal forest lands, particularly FS and BLM lands, and how to balance timber harvesting against the other statutory uses and values for these federal lands. Further, Congress may debate whether or how the agencies use timber harvesting or other active forest management techniques to achieve other resource-management objectives, such as improving wildlife habitat or improving a forest's resistance and resilience to disturbance events (e.g., wildfire, ice storm). FS manages 145 million acres of forests and woodlands in the National Forest System (NFS). In FY2018, approximately 2.8 billion board feet of timber and other forest products were harvested from NFS lands, at a value of $188.8 million. BLM manages approximately 38 million acres of forest and woodlands. The vast majority are public domain forests, managed under the principles of multiple use and sustained yield as established by FLPMA. The 2.6 million acres of Oregon & California (O&C) Railroad Lands in western Oregon, however, are managed under a statutory direction for permanent forest production, as well as watershed protection, recreation, and contributing to the economic stability of local communities and industries. In FY2018, approximately 177.8 million board feet of timber and other forest products were harvested from BLM lands, at a value of $41.3 million. The NPS and FWS have limited authorities to cut, sell, or dispose of timber from their lands and have established policies to do so only in certain cases, such as controlling for insect and disease outbreaks. In the past few years, the ecological condition of the federal forests has been one focus of discussion. Many believe that federal forests are ecologically degraded, contending that decades of wildfire suppression and other forest-management decisions have created overgrown forests overstocked with biomass (fuels) that are susceptible to insect and disease outbreaks and can serve to increase the spread or intensity of wildfires. These observers advocate rapid action to improve forest conditions, including activities such as prescribed burning, forest thinning, salvaging dead and dying trees, and increased commercial timber production. Critics counter that authorities to reduce fuel levels are adequate, treatments that remove commercial timber degrade other ecosystem conditions and waste taxpayer dollars, and expedited processes for treatments may reduce public oversight of commercial timber harvesting. The 115 th Congress enacted several provisions intended to expedite specific forest management projects on federal land and encourage forest restoration projects across larger areas, including projects which involve nonfederal landowners. CRS Report R45696, Forest Management Provisions Enacted in the 115th Congress , by Katie Hoover et al. CRS Report R45688, Timber Harvesting on Federal Lands , by Anne A. Riddle. CRS Report R43872, National Forest System Management: Overview, Appropriations, and Issues for Congress , by Katie Hoover. CRS Report R42951, The Oregon and California Railroad Lands (O&C Lands): Issues for Congress , by Katie Hoover. Management of federal rangelands, particularly by BLM and FS, presents an array of policy matters for Congress. Several issues pertain to livestock grazing. There is debate about the appropriate fee that should be charged for grazing private livestock on BLM and FS lands, including what criteria should prevail in setting the fee. Today, these federal agencies charge fees under a formula established by law in 1978, then continued indefinitely through an executive order issued by President Reagan in 1986. The BLM and FS are generally charging a 2019 grazing fee of $1.35 per animal unit month (AUM) for grazing on their lands. Conservation groups, among others, generally seek increased fees to recover program costs or approximate market value, whereas livestock producers who use federal lands want to keep fees low to sustain ranching and rural economies. The BLM and FS issue to ranchers permits and/or leases that specify the terms and conditions for grazing on agency lands. Permits and leases generally cover a 10-year period and may be renewed. Congress has considered whether to extend the permit/lease length (e.g., to 20 years) to strengthen the predictability and continuity of operations. Longer permit terms have been opposed because they potentially reduce the opportunities to analyze the impact of grazing on lands and resources. The effect of livestock grazing on rangelands has been part of an ongoing debate on the health and productivity of rangelands. Due to concerns about the impact of grazing on rangelands, some recent measures would restrict or eliminate grazing, for instance, through voluntary retirement of permits and leases and subsequent closure of the allotments to grazing. These efforts are opposed by those who assert that ranching can benefit rangelands and who support ranching on federal lands for not only environmental but lifestyle and economic reasons. Another focus of the discussion on range health and productivity is the spread of invasive and noxious weeds. (See " Invasive Species " section, below.) There is continued congressional interest in management of wild horses and burros, which are protected on BLM and FS lands under the Wild Free-Roaming Horses and Burros Act of 1971. Under the act, the agencies inventory horse and burro populations on their lands to determine appropriate management levels (AMLs). Most of the animals are on BLM lands, although both BLM and FS have populations exceeding their national AMLs. BLM estimates the maximum AML at 26,690 wild horses and burros, and it estimates population on the range at 81,951. Furthermore, off the range, BLM provides funds to care for 50,864 additional wild horses and burros in short-term corrals, long-term (pasture) holding facilities, and eco-sanctuaries. The Forest Service estimates population on lands managed by the agency at 9,300 wild horses and burros. The agencies are statutorily authorized to remove excess animals from the range and use a variety of methods to meet AML. This includes programs to adopt and sell animals, to care for animals off-range, to administer fertility control, and to establish ecosanctuaries. Questions for Congress include the sufficiency of these authorities and programs for managing wild horses and burros. Another controversial question is whether the agencies should humanely destroy excess animals, as required under the 1971 law, or whether Congress should continue to prohibit the BLM from using funds to slaughter healthy animals. Additional topics of discussion center on the costs of management, particularly the relatively high cost of caring for animals off-range. Other options focus on keeping animals on the range, such as by expanding areas for herds and/or changing the method for determining AML. CRS Report RS21232, Grazing Fees: Overview and Issues , by Carol Hardy Vincent. CRS In Focus IF11060, Wild Horse and Burro Management: Overview of Costs , by Carol Hardy Vincent. The abundance and diversity of recreational uses of federal lands and waters has increased the challenge of balancing different types of recreation with each other and with other land uses. One issue is how—or whether—fees should be collected for recreational activities on federal lands. The Federal Lands Recreation Enhancement Act (FLREA) established a recreation fee program for the four FLMAs and the Bureau of Reclamation. The authorization ends on September 30, 2020. FLREA authorizes the agencies to charge, collect, and spend fees for recreation on their lands, with most of the money remaining at the collecting site. The 116 th Congress faces issues including whether to let lapse, extend, make permanent, or amend the program. Current oversight issues for Congress relate to various aspects of agency implementation of the fee program, including the determination of fee changes, use of collected revenue, and pace of obligation of fee collections. Supporters of the program contend that it sets fair and similar fees among agencies and keeps most fees on-site for improvements that visitors desire. Some support new or increased fees or full extension of the program to other agencies, especially the U.S. Army Corps of Engineers. Among critics, some oppose recreation fees in general. Others assert that fees are appropriate for fewer agencies or types of lands, that the fee structure should be simplified, or that more of the fees should be used to reduce agency maintenance backlogs. Another contentious issue is the use of off-highway vehicles (OHVs)—all-terrain vehicles, snowmobiles, personal watercraft, and others—on federal lands and waters. OHV use is a popular recreational activity on BLM and FS land, while NPS and FWS have fewer lands allowing them. OHV supporters contend that the vehicles facilitate visitor access to hard-to-reach natural areas and bring economic benefits to communities serving riders. Critics raise concerns about disturbance of nonmotorized recreation and potential damage to wildlife habitat and ecosystems. Issues for Congress include broad questions of OHV access and management, as well as OHV use at individual parks, forests, conservation areas, and other federal sites. Access to opportunities on federal lands for hunting, fishing, and recreational shooting (e.g., at shooting ranges) is of perennial interest to Congress. Hunting and fishing are allowed on the majority of federal lands, but some contend they are unnecessarily restricted by protective designations, barriers to physical access, and agency planning processes. Others question whether opening more FLMA lands to hunting, fishing, and recreational shooting is fully consistent with good game management, public safety, other recreational uses, resource management, and the statutory purposes of the lands. Issues for Congress include questions of whether or how to balance hunting and fishing against other uses, as well as management of equipment used for hunting and fishing activities, including types of firearms and composition of ammunition and fishing tackle. CRS In Focus IF10151, Federal Lands Recreation Enhancement Act: Overview and Issues , by Carol Hardy Vincent. CRS Report R45103, Hunting and Fishing on Federal Lands and Waters: Overview and Issues for Congress , by R. Eliot Crafton. CRS In Focus IF10746, Hunting, Fishing, and Related Issues in the 115th Congress , by R. Eliot Crafton. Congress, the President, and some executive branch officials may establish individual designations on federal lands. Although many designations are unique, some have been more commonly applied, such as national recreation area, national scenic area, and national monument. Congress has conferred designations on some nonfederal lands, such as national heritage areas, to commemorate, conserve, and promote important natural, scenic, historical, cultural, and recreational resources. Congress and previous Administrations also have designated certain offshore areas as marine national monuments or sanctuaries. Controversial issues involve the types, locations, and management of such designations, and the extent to which some designations should be altered, expanded, or reduced. In addition, Congress has created three cross-cutting systems of federal land designations to preserve or emphasize particular values or resources, or to protect the natural conditions for biological, recreation, or scenic purposes. These systems are the National Wilderness Preservation System, the National Wild and Scenic Rivers System, and the National Trails System. The units of these systems can be on one or more agencies' lands, and the agencies manage them within parameters set in statute. CRS Report R45340, Federal Land Designations: A Brief Guide , coordinated by Laura B. Comay. CRS Report RL33462, Heritage Areas: Background, Proposals, and Current Issues , by Laura B. Comay and Carol Hardy Vincent. CRS Report R41285, Congressionally Designated Special Management Areas in the National Forest System , by Katie Hoover. The Antiquities Act of 1906 authorizes the President to proclaim national monuments on federal lands that contain historic landmarks, historic and prehistoric structures, or other objects of natural, historic, or scientific interest. The President is to reserve "the smallest area compatible with the proper care and management of the objects to be protected." Seventeen of the 20 Presidents since 1906, including President Trump, have used this authority to establish, enlarge, diminish, or make other changes to proclaimed national monuments. Congress has modified many of these proclamations, abolished some monuments, and created monuments under its own authority. Since the enactment of the Antiquities Act, presidential establishment of monuments sometimes has been contentious. Most recently, the Trump Administration has reviewed and recommended changes to some proclaimed national monuments, and President Trump has modified and established some monuments. Congress continues to address the role of the President in proclaiming monuments. Some seek to impose restrictions on the President's authority to proclaim monuments. Among the bills considered in recent Congresses are those to block monuments from being declared in particular states; limit the size or duration of withdrawals; require the approval of Congress, the pertinent state legislature, or the pertinent governor before a monument could be proclaimed; or require the President to follow certain procedures prior to proclaiming a new monument. Others promote the President's authority to act promptly to protect valuable resources on federal lands that may be vulnerable, and they note that Presidents of both parties have used the authority for over a century. They favor the Antiquities Act in its present form, asserting that the courts have upheld monument designations and that large segments of the public support monument designations for the recreational, preservation, and economic benefits that such designations can bring. CRS Report R41330, National Monuments and the Antiquities Act , by Carol Hardy Vincent. CRS Report R44988, Executive Order for Review of National Monuments: Background and Data , by Carol Hardy Vincent and Laura A. Hanson. CRS Report R44886, Monument Proclamations Under Executive Order Review: Comparison of Selected Provisions , by Carol Hardy Vincent and Laura A. Hanson. In 1964, the Wilderness Act created the National Wilderness Preservation System, with statutory protections that emphasize preserving certain areas in their natural states. Units of the system can be designated only by Congress. Many bills to designate wilderness areas have been introduced in each Congress. As of March 1, 2019, there were 802 wilderness areas, totaling over 111 million acres in 44 states (and Puerto Rico) and managed by all four of the FLMAs. A wilderness designation generally prohibits commercial activities, motorized access, and human infrastructure from wilderness areas, subject to valid existing rights. Advocates propose wilderness designations to preserve the generally undeveloped conditions of the areas. Opponents see such designations as preventing certain uses and potential economic development in rural areas where such opportunities are relatively limited. Designation of new wilderness areas can be controversial, and questions persist over the management of areas being considered for wilderness designation. FS reviews the wilderness potential of NFS lands during the forest planning process and recommends any identified potential wilderness areas for congressional consideration. Management activities or uses that may reduce the wilderness potential of a recommended wilderness area may be restricted. Questions also persist over BLM wilderness study areas (WSAs). These WSAs are the areas BLM studied as potential wilderness and made subsequent recommendations to Congress regarding their suitability for designation as wilderness. BLM is required by FLPMA to protect the wilderness characteristics of WSAs, meaning that many uses in these areas are restricted or prohibited. Congress has designated some WSAs as wilderness, and has also included legislative language releasing BLM from the requirement to protect the wilderness characteristics of other WSAs. FS also manages approximately 58 million acres of lands identified as "inventoried roadless areas." These lands are not part of the National Wilderness Preservation System, but certain activities—such as road construction or timber harvesting—are restricted on these lands, with some exceptions. The Clinton and George W. Bush Administrations each promulgated different roadless area regulations. Both were heavily litigated; however, the Clinton policy to prohibit many activities on roadless areas remains intact after the Supreme Court refused to review a lower court's 2012 decision striking down the Bush rule. In 2018, the Forest Service initiated a rulemaking process to develop a new roadless rule specific to the national forests in the state of Alaska. CRS Report RL31447, Wilderness: Overview, Management, and Statistics , by Katie Hoover. CRS Report R41610, Wilderness: Issues and Legislation , by Katie Hoover and Sandra L. Johnson. Congress established the National Wild and Scenic Rivers System with the passage of the Wild and Scenic Rivers Act of 1968. The act established a policy of preserving designated free-flowing rivers for the benefit and enjoyment of present and future generations. River units designated as part of the system are classified and administered as wild, scenic, or recreational rivers, based on the condition of the river, the amount of development in the river or on the shorelines, and the degree of accessibility by road or trail at the time of designation. The system contains both federal and nonfederal river segments. Typically, rivers are added to the system by an act of Congress, but may also be added by state nomination with the approval of the Secretary of the Interior. As of March 1, 2019, there are more than 200 river units with roughly 13,300 miles in 40 states and Puerto Rico, administered by all four FLMAs, or by state, local, or tribal governments. Designation and management of lands within river corridors has been controversial in some cases. Issues include concerns about private property rights and water rights within designated river corridors. Controversies have arisen over state or federal projects prohibited within a corridor, such as construction of major highway crossings, bridges, or other activities that may affect the flow or character of the designated river segment. The extent of local input in developing river management plans is another recurring issue. The National Trails System Act of 1968 authorized a national system of trails, across federal and nonfederal lands, to provide additional outdoor recreation opportunities and to promote access to the outdoor areas and historic resources of the nation. The system today consists of four types of trails and can be found in all 50 states, the District of Columbia, and Puerto Rico. This includes 11 national scenic trails and 19 national historic trails that covers roughly 55,000 miles. In addition, almost 1,300 national recreation trails and 7 connecting-and-side trails have been established administratively as part of the system. National trails are administered by NPS, FS, and BLM, in cooperation with appropriate state and local authorities. Most recreation uses are permitted, as are other uses or facilities that do not substantially interfere with the nature and purposes of the trail. However, motorized vehicles are prohibited on many trails. Ongoing issues for Congress include whether to designate additional trails, whether or how to balance trail designation with other potential land uses, what activities should be permitted on trails, and what portion of trail funding should be from federal versus nonfederal sources. Some Members have expressed interest in new types of trails for the system, such as "national discovery trails," which would be interstate trails connecting representative examples of metropolitan, urban, rural, and backcountry regions. CRS Report R42614, The National Wild and Scenic Rivers System: A Brief Overview , by Sandra L. Johnson and Laura B. Comay. CRS Report R43868, The National Trails System: A Brief Overview , by Sandra L. Johnson and Laura B. Comay. The National Marine Sanctuaries Act (NMSA) authorizes the National Oceanic and Atmospheric Administration (NOAA) to designate specific areas for protection of their ecological, aesthetic, historical, cultural, scientific, or educational qualities. The NOAA Office of National Marine Sanctuaries serves as the trustee for the 13 national marine sanctuaries (NMSs) designated under NMSA. Sanctuaries are located in marine areas and waters under state or federal jurisdiction. Sites are designated for specific reasons, such as protecting cultural artifacts (e.g., sunken vessels), particular species (e.g., humpback whales), or unique areas and entire ecosystems (e.g., Monterey Bay). Two areas currently under consideration for designation are Mallows Bay, Potomac River, MD, and Lake Michigan, WI. The NMSA requires the development and implementation of management plans for each sanctuary, which provide the basis for managing or limiting incompatible activities. For most NMSs, questions related to developing or amending management plans have focused on identifying and limiting incompatible activities. Five large marine national monuments have been designated by the President under the Antiquities Act, the most recent being the Northeast Canyons and Seamounts Marine National Monument in 2016, the first designated in the Atlantic Ocean. Within the monuments, the removing, taking, harvesting, possessing, injuring, or damaging of monument resources is prohibited except as provided under regulated activities. For example, some exceptions have been provided for recreational fishing and subsistence use within certain marine national monuments. All five marine national monuments are managed cooperatively by the Department of the Interior (FWS) and Department of Commerce (NOAA). One of the main differences between national marine sanctuaries and marine national monuments is their designation process. While monuments are designated by presidential proclamation or through congressional legislation, the NMS designation process is an administrative action, requiring nomination, public scoping, public comment, and congressional and state review prior to the Secretary of Commerce's approval of the designation. Some stakeholders from extractive industries, such as the fishing industry, have voiced concerns that the national monument designation process does not provide opportunities to examine the tradeoffs between resource protection and resource use. On the other hand, some environmentalists have voiced concerns with the low number of NMS designations and what they see as inadequate protection of some sanctuary resources, such as fish populations. Some observers question whether the overriding purpose of the NMSA is to preserve and protect marine areas or to create multiple use management areas. Most agree that the designation and management of national marine sanctuaries and marine national monuments will continue to inspire debate over the role of marine protected areas. The Trump Administration has reviewed and recommended changes to the size and management of some marine national monuments. Each FLMA has a responsibility to manage the plant and animal resources under its purview. An agency's responsibilities may be based on widely applicable statutes or directives, including the Endangered Species Act, the Migratory Bird Treaty Act, the Fish and Wildlife Coordination Act, executive orders, and other regulations. Species management could also be based on authorities specific to each FLMA. In addition, each FLMA must work closely with state authorities to address species management issues. In the case of the National Wildlife Refuge System (administered by FWS), the conservation of plants and animals is the mission of the system, and other uses are allowed to the extent they are compatible with that mission and any specific purposes of an individual system unit. While most refuges are open for public enjoyment, some refuges or parts of refuges (such as island seabird colonies) might be closed to visitors to preserve natural resources. For the National Park System, resource conservation (including wildlife resources) is part of the National Park Service's dual mission, shared with the other goal of public enjoyment. The FS and BLM have multiple use missions, with species management being one of several agency responsibilities. The federal land management agencies do not exercise their wildlife authorities alone. Often, Congress has directed federal agencies to share management of their wildlife resources with state agencies. For example, where game species are found on federal land and hunting is generally allowed on that land, federal agencies work with states on wildlife censuses and require appropriate state licenses to hunt on the federal lands. In addition, federal agencies often cooperate with states to enhance wildlife habitat for the benefit of both jurisdictions. The four FLMAs do not each maintain specific data on how many acres of land are open to hunting, fishing, and recreational shooting. However, both BLM and FS are required to open lands under their administration to hunting, fishing, and recreational shooting, subject to any existing and applicable law, unless the respective Secretary specifically closes an area. Both agencies estimate that nearly all of their lands are open to these activities. FWS is required to report the number of refuges open to hunting and fishing as well as the acreage available for hunting on an annual basis. As of FY2017, there were 277 refuges open to fishing and 336 refuges open to hunting, providing access to 86 million acres for hunting. Congress frequently considers species management issues, such as balancing land and resources use, providing access to hunting and fishing on federal lands, and implementing endangered species protections. The protection of endangered and threatened species—under the 1973 Endangered Species Act (ESA) —can be controversial due to balancing the needs for natural resources use and development and species protection. Under the ESA, all federal agencies must "utilize their authorities in furtherance of the purposes of this Act by carrying out programs for the conservation of endangered species and threatened species listed pursuant to ... this Act." As a result, the FLMAs consider species listed as threatened or endangered in their land management plans, timber sales, energy or mineral leasing plans, and all other relevant aspects of their activities that might affect listed species. They consult with FWS (or NMFS, for most marine species and for anadromous fish such as salmon) about those effects. The majority of these consultations result in little or no change in the actions of the land managers. Congress has considered altering ESA implementation in various ways. For example, bills were introduced in the 115 th Congress that would have redefined the process for listing a species, defined the types of data used to evaluate species, and changed the types of species that can be listed under ESA, among others. Debate has also centered on certain species, particularly where conservation of species generates conflict over resources in various habitats. Examples of these species include sage grouse (energy and other resources in sage brush habitat), grey wolves (ranching), and polar bears (energy development in northern Alaska), among others. Proposals resulting from issues regarding certain species include granting greater authority to states over whether a species may be listed, changing the listing status of a species, and creating special conditions for the treatment of a listed species. CRS Report RL31654, The Endangered Species Act: A Primer , by Pervaze A. Sheikh. CRS Report RL32992, The Endangered Species Act and "Sound Science , " by Pervaze A. Sheikh. CRS Report R40787, Endangered Species Act (ESA): The Exemption Process , by Pervaze A. Sheikh. While habitat loss is a major factor in the decline of species, invasive species have long been considered the second-most-important factor. Invasive species—nonnative or alien species that cause or are likely to cause harm to the environment, the economy, or human health upon introduction, establishment, and spread—have the potential to affect habitats and people across the United States and U.S. territories, including on federal lands and waters. For example, gypsy moths have been a pest in many eastern national forests as well as Shenandoah National Park. A fungus causing white-nose syndrome has caused widespread mortality in bat populations in the central and eastern states, including those in caves on national park and national forest lands. Burmese pythons prey on native species of birds, mammals, and reptiles in south Florida, including in the Everglades National Park. Many stakeholders believe the most effective way to deal with invasive species is to prevent their introduction and spread. For species already introduced, finding effective management approaches is important, though potentially difficult or controversial. Control efforts can be complex and expensive, and may require collaboration and coordination between multiple stakeholders. Addressing invasive species is a responsibility shared by several federal agencies, in addition to the FLMAs. These agencies are required to plan and carry out control activities and to develop strategic plans to implement such activities. Control activities are required to manage invasive populations, prevent or inhibit the introduction and spread invasive species, and to restore impacted areas. Further, agencies must consider both ecological and economic aspects in developing their strategic plans and implementing control activities, and they must coordinate with state, local, and tribal representatives. Legislation to address the introduction and spread of invasive species as well as the impacts that arise from these species is of perennial interest to Congress. CRS Report R43258, Invasive Species: Major Laws and the Role of Selected Federal Agencies , by Renée Johnson, R. Eliot Crafton, and Harold F. Upton. CRS In Focus IF11011, Invasive Species: A Brief Overview , by R. Eliot Crafton and Sahar Angadjivand. Wildfire is a concern because it can lead to loss of human life, damage communities and timber resources, and affect soils, watersheds, water quality, and wildlife. Management of wildfire—an unplanned and unwanted wildland fire—includes preparedness, suppression, fuel reduction, site rehabilitation, and more. A record-setting 10.1 million acres burned in 2015 due to wildfire, and 10.0 million acres burned two years later in 2017. In 2018, 8.8 million acres burned. The federal government is responsible for managing wildfires that begin on federal land. FS and DOI have overseen wildfire management, with FS receiving approximately two-thirds of federal funding. Wildfire management funding—including supplemental appropriations—has averaged $3.8 billion annually over the last 10 years (FY2009 through FY2018), ranging from a low of $2.7 billion in FY2012 to a high of $4.9 billion in both FY2016 and FY2018. Congressional activity regarding wildfire management typically peaks during the fire season, and during the early part of the budget process. Legislative issues for Congress include oversight of the agencies' fire management activities and other wildland management practices that have altered fuel loads over time, and consideration of programs and processes for reducing fuel loads. Funding also is a perennial concern, particularly for suppression purposes, an activity for which costs are generally rising but vary annually and are difficult to predict. The 115 th Congress enacted a new adjustment to the discretionary spending limits for wildfire suppression operations, starting in FY2020. This means that Congress can appropriate some wildfire suppression funds—subject to certain criteria—effectively outside of the discretionary spending limits. There is also congressional interest in the federal roles and responsibilities for wildfire protection, response, and damages, including activities such as air tanker readiness and efficacy and liability issues. Other issues include the use of new technologies for wildfire detection and response, such as unmanned aircrafts. Another issue is the impact of the expanding wildland-urban interface (WUI), which is the area where structures (usually homes) are intermingled with or adjacent to vegetated wildlands (forests or rangelands). The proximity to vegetated landscapes puts these areas at a potential risk of experiencing wildfires and associated damage. Approximately 10% of all land within the lower 48 states is classified as WUI. CRS In Focus IF10244, Wildfire Statistics , by Katie Hoover. CRS In Focus IF10732, Federal Assistance for Wildfire Response and Recovery , by Katie Hoover. CRS Report R44966, Wildfire Suppression Spending: Background, Issues, and Legislation in the 115th Congress , by Katie Hoover and Bruce R. Lindsay. CRS Report R45005, Wildfire Management Funding: Background, Issues, and FY2018 Appropriations , by Katie Hoover, Wildfire Management Funding: Background, Issues, and FY2018 Appropriations, by Katie Hoover.
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The Property Clause in the U.S. Constitution (Article IV, §3, clause 2) grants Congress the authority to acquire, dispose of, and manage federal property. The 116th Congress faces multiple policy issues related to federal lands and natural resources. These issues include how much and which land the government should own and how lands and resources should be used and managed. These issues affect local communities, industries, ecosystems, and the nation. There are approximately 640 million surface acres of federally owned land in the United States. Four agencies (referred to in this report as the federal land management agencies, or FLMAs) administer approximately 608 million surface acres (~95%) of federal lands: the Forest Service (FS) in the Department of Agriculture (USDA), and the Bureau of Land Management (BLM), U.S. Fish and Wildlife Service (FWS), and National Park Service (NPS), all in the Department of the Interior (DOI). The federal estate also extends to energy and mineral resources located below ground and offshore. BLM manages the onshore subsurface mineral estate and the Bureau of Ocean Energy Management, also in DOI, manages access to approximately 1.7 billion offshore acres in federal waters on the U.S. outer continental shelf. However, not all of these onshore or offshore acres can be expected to contain extractable mineral and energy resources. This report introduces some of the broad themes and issues Congress has considered when addressing federal land policy and resource management. These include questions about the extent and location of the federal estate. For example, typically Congress considers both measures to authorize and fund the acquisition of additional lands and measures to convey some land out of federal ownership or management. Other issues for Congress include whether certain lands or resources should have additional protections, for example, through designation as wilderness or national monuments, or protection of endangered species and their habitat. Other policy questions involve how federal land should be used. Certain federal lands are considered primary- or dominant-use lands as specified in statute by Congress. For example, the dominant-use mission of the National Wildlife Refuge System is the conservation of fish, wildlife, and plant resources and associated habitats for the benefit of current and future Americans, and the dual-use mission of the National Park System is to conserve unique resources and provide for their use and enjoyment by the public. BLM and FS lands, however, have a statutory mission to balance multiple uses: recreation, grazing, timber, habitat and watershed protection, and energy production, among others. Conflicts arise as users and land managers attempt to balance these uses. Congress often addresses bills to clarify, prioritize, and alter land uses, including timber harvesting, livestock grazing, and recreation (motorized and nonmotorized). With respect to energy uses, in addition to questions about balancing energy production against other uses, other questions include how to balance traditional and alternative energy production on federal lands. Additional issues of debate include whether or how to charge for access and use of federal resources and lands, how to use any funds collected, and whether or how to compensate local governments for the presence of untaxed federal lands within their borders. Congress also faces questions about wildfire management on both federal and nonfederal lands, including questions of risk management and funding suppression efforts.
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On February 12, 2018, the Trump Administration submitted to Congress its FY2019 budget request, which included $41.86 billion of base (or enduring) funds for the Department of State, Foreign Operations, and Related Programs (SFOPS). Of that amount, $13.26 billion would have been for State operations, international broadcasting, and related agencies and $28.60 billion for foreign operations. Comparing the request with the FY2018 actual SFOPS funding levels, the FY2019 request represented a 23.3% decrease in SFOPS funding. The proposed State and related agency funding would have been 18.7% below FY2018 funding levels, and the foreign operations funding would have been reduced by 25.2%. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), signed into law on February 15, included a total of $54.377 billion for SFOPS accounts, a 0.3% decrease over the FY2018 funding level and about 30% more than the Administration's request. An account-by-account comparison of the SFOPS request with the FY2018 actual funding and FY2019 enacted appropriation is provided in Appendix A . International Affairs 150 function funding levels are detailed in Appendix B . A chart depicting the components of the SFOPS appropriations bill is in Appendix C . A glossary is provided in Appendix D . The appropriations process for FY2019 was shaped by the Bipartisan Budget Act of 2018 (BBA, H.R. 1892 , P.L. 115-123 ), which Congress passed on February 9, 2018. The act raised the overall revised discretionary spending limits set by the Budget Control Act of 2011 (BCA, P.L. 112-25 ) from $1.069 trillion for FY2017 to $1.208 trillion for FY2018 and to $1.244 trillion for FY2019. The BBA increased FY2019 defense funding levels by $85 billion, from $562 billion to $647 billion, and nondefense funding (including SFOPS) by $68 billion, from $529 billion to $597 billion. It also extended direct spending reductions from FY2021 in the original BCA through FY2027, as amended. Every year since FY2012, the Administration has distinguished SFOPS spending as either enduring (base) funds or those to support overseas contingency operations (OCO). The OCO designation gained increased significance with enactment of the BCA, which specified that emergency or OCO funds do not count toward the spending limits established by the act. In early years of requesting OCO funds, the Obama Administration described OCO requests for "extraordinary, but temporary, costs of the Department of State and USAID in Iraq, Afghanistan, and Pakistan." Syria and other countries were added in later years, and the Trump Administration expanded OCO use in its first budget request in FY2018 to be available for longer-term, core activities and more countries. For FY2019, because the BBA raised spending limits, the Administration did not seek foreign affairs OCO funds, but requested the entire SFOPS budget within base funds. The final legislation, P.L. 116-6 , included $8.0 billion designated as OCO, or about 15% of enacted SFOPS funding. For funding trends, see Table 1 . House and Senate SFOPS Legislation . FY2019 SFOPS legislation was introduced and approved by the full appropriations committee in each chamber. The House legislation, H.R. 6385 , included total SFOPS funding of $54.18 billion, 0.6% lower than FY2018 funding and 29% more than requested. The Senate proposal, S. 3108 , would have provided $54.602 billion for SFOPS accounts, which is about 0.1% more than FY2018 funding and 30% more than requested. Neither bill received floor consideration in its respective chamber. Continuing Resolutions . On September 28, 2018, the President signed into law P.L. 115-245 , legislation which included the Continuing Appropriations Act, 2019 (CR) to continue funding for SFOPS accounts (among seven other appropriations that were not completed by the start of FY2019) at a prorated 2018 funding level through December 7, 2018. Funds designated as OCO in 2018 appropriations continued to be so designated for SFOPS in the CR. On December 3, 2018, Congress and the Administration extended funding through December 21, 2018 by enacting P.L. 115-298 . After December 21, funding lapsed and a partial shutdown of the government occurred. On January 25, an agreement was reached to continue funding for SFOPS and other appropriations that had lapsed through February 15, at the FY2018 level ( P.L. 116-5 ). Enacted Legislation . On February 14 Congress passed, and the President later signed into law, a full year appropriation ( P.L. 116-6 , Division F) that included $54.38 billion in total SFOPS funding, a 0.3% decrease from the FY2018 funding level and about 30% more than the Administration's request. Of that total, $16.46 billion was for State Department operations and related agencies; $37.92 billion for foreign operations accounts. About 14.7%, or $8.0 billion, was designated as OCO. The State Department sought to cut funding for the Department of State and Related Agency category by 19% in FY2019 from FY2018 funding levels, to $13.26 billion. Conversely, both the House and Senate committee bills sought to maintain funding near previous fiscal year levels. The House committee bill would have increased funding in this category to $16.38 billion, or 0.4% above the FY2018 funding level. The Senate committee bill would have raised funding to $16.34 billion, around $40 million less than the House committee bill and approximately 0.1% more than the FY2018 funding level. Similar to the House and Senate committee bills, the FY2019 enacted appropriation ( P.L. 116-6 ) maintained funding for the State Department and Related Agency category slightly above FY2018 funding level. It provided $16.46 billion for this category, or 0.9% more than the F2018 level. The State Department's request sought to fund the entirety of this category through base (or enduring) funding. Following passage of the BBA and the resulting increase in discretionary spending cap levels for FY2018 and FY2019, the State Department moved the $3.69 billion request for Overseas Contingency Operations (OCO) in this category into the base budget request. Both the House and Senate committee bills sought to retain OCO funding within the Department of State and Related Agency category. The House committee bill would have provided $3.03 billion for OCO, or around 28% less than the FY2018 figure of $4.18 billion. The Senate committee bill would have provided $4.11 billion, which constituted about 2% less than FY2018 level. While the House committee bill would have afforded approximately $1.08 billion less for OCO than the Senate committee bill, the House committee bill provided around $1.12 billion more in enduring funding ($13.35 billion) than the Senate committee bill ($12.23 billion). As with the House and Senate committee bills, P.L. 116-6 retained OCO funding for the Department of State and Related Agency category. The law provided a total of $4.37 billion for OCO, or 4.5% more than the FY2018 funding level. While the law provided more for OCO than either the Senate or House committee bills, it provided less in enduring funding ($12.09 billion). Areas where the State Department's proposed cuts were focused included the diplomatic security accounts (the Worldwide Security Protection programmatic allocation within the Diplomatic Programs account and, separately, the Embassy Security, Construction, and Maintenance account), Contributions to International Organizations, and Contributions for International Peacekeeping Activities. In most cases, P.L. 116-6 , in a manner similar to the House and Senate committee bills, maintained annual budget authority for these accounts closer to the FY2018 funding levels than the Administration requested (see following sections for more detailed analysis). The State Department also requested $246.2 million to implement the Leadership and Modernization Impact Initiative, which serves as the implementation phase of the department's "Redesign" efforts. While neither the House nor the Senate committee bill directly addressed the Impact Initiative, both included provisions enabling Congress to conduct oversight of any broader reorganization efforts at the department. The enacted legislation, P.L. 116-6 , took the same approach. Table 3 provides an overview of proposed changes to selected accounts within the State Department and Related Agency category. Under the State Department's budget request, the Diplomatic Programs account, which is the State Department's principal operating appropriation, would have declined by 11% from the FY2018 funding level of $8.82 billion, to $7.81 billion. According to the State Department, this account provides funding for "core people, infrastructure, security, and programs that facilitate productive and peaceful U.S. relations" with foreign governments and international organizations. The House and Senate committee bills would have provided $8.80 billion and $8.92 billion, respectively, for Diplomatic Programs. For FY2019 enacted, P.L. 116-6 provided $9.17 billion, or 4% more than the FY2018 funding level and 17% more than the State Department's request. In Section 7081 of the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ), Congress authorized the establishment of a new "Consular and Border Security Programs" (CBSP) account into which consular fees shall be deposited for the purposes of administering consular and border security programs. As a result, consular fees retained by the State Department to fund consular services will be credited to this new account. The State Department thus requested that Congress rename the former Diplomatic and Consular Programs account "Diplomatic Programs." However, because many consular fees are generated and retained by the State Department to administer consular programs, they do not comprise part of the department's annual appropriations and therefore do not count against overall funds appropriated annually for this account. The FY2019 enacted legislation, P.L. 116-6 , authorized the renaming of Diplomatic and Consular Programs to Diplomatic Programs, as did the House and Senate committee bills. The Diplomatic Programs account provides funds for a large share of U.S. direct hire positions, including but not limited to State Department Foreign Service and Civil Service officers. Although the Trump Administration lifted the federal hiring freeze upon issuance of OMB M-17-22 on April 12, 2017, the State Department elected to keep its own hiring freeze in place. The Department of State released guidance in May 2018 lifting the hiring freeze and allowing the department to increase staffing to December 31, 2017 levels. Some Members of Congress expressed concern with the hiring freeze and the continued impacts of perceived personnel shortages at the Department of State. Both the House and Senate committee bills, and the committee reports accompanying those bills, included oversight provisions pertaining to State Department personnel levels. In this vein, Section 7073 of P.L. 116-6 required that no appropriated funds may be used to expand or reduce the size of the State Department and USAID's Civil Service, Foreign Service, eligible family member, and locally employed staff workforce from the on-board levels as of December 31, 2017 without consultation with the Committees on Appropriations and Foreign Relations of the Senate and the Committees on Appropriations and Foreign Affairs of the House of Representatives. Section 7073 also required the Secretary of State to submit reports to Congress, beginning 60 days after enactment of the law, and every 60 days thereafter until September 30, 2020, regarding the State Department's on-board personnel levels, hiring, and attrition of the Civil Service, Foreign Service, eligible family member, and locally employed staff workforce. These reports were also required to include a hiring plan for maintaining Foreign Service and Civil Service personnel numbers at not less than December 31, 2017, levels through FY2019. Among other personnel-related provisions, the joint explanatory statement accompanying this law noted that keeping personnel at these levels reflected "minimum necessary hiring" and encouraged the Secretary of State to work with Congress to increase hiring above such levels as appropriate. The Human Resources funding category within Diplomatic Programs provides funding for the Charles B. Rangel International Affairs and Thomas R. Pickering Foreign Affairs fellowship programs to promote greater diversity in the Foreign Service, as authorized by Section 47 of the State Department Basic Authorities Act (P.L. 84-885). While Congress required the State Department to expand the number of fellows participating in the Rangel and Pickering programs by 10 apiece pursuant to Section 706 of the Department of State Authorities Act, 2017 ( P.L. 114-323 ), it has provided the department the discretion to fund these programs at levels it deems appropriate from monies appropriated for Human Resources. P.L. 116-6 , like the House and Senate committee bills, continued to provide such discretion to the State Department. In addition, the House committee report indicated support for department efforts to increase diversity in hiring, including through the Rangel and Pickering programs. It also encouraged the Secretary of State to explore more opportunities to further the goal of increasing workforce diversity. The Senate committee report recommended the continued expansion of the department's workforce diversity programs and directed that qualified graduates of the Rangel and Pickering programs shall be inducted into the Foreign Service. While neither P.L. 116-6 nor the accompanying joint explanatory statement addressed the Rangel and Pickering programs specifically or Foreign Service diversity more generally, the joint explanatory statement did not negate any of the language in the House and Senate committee reports. The Diplomatic Programs account also provides funding for a number of overseas programs. These include programs carried out by the Bureau of Conflict and Stabilization Operations and the department's regional bureaus. Activities of the department's Bureau of Medical Services, which is responsible for providing health care services to U.S. government employees and their families assigned to overseas posts, are also funded through this account. Public diplomacy programs are among the overseas programs funded through Diplomatic Programs, which include the Global Engagement Center's (GEC's) countering state disinformation (CSD) program. According to the State Department, planned CSD activities, for which $20 million was requested, included "coordinating U.S. government efforts in specific sub-regions; enhancing the capacity of local actors to build resilience against disinformation, including thwarting attacks on their IT systems; providing attribution of adversarial disinformation; and convening anti-disinformation practitioners, journalists, and other influencers to exchange best practices, build networks, and generate support for U.S. efforts against disinformation." The House committee report registered concern regarding "foreign propaganda and disinformation that threatens United States national security, especially as carried out by China, Russia, and extremists groups" and asserted that the GEC "is expected to use a wide range of technologies and techniques to counter these campaigns," consistent with its statutory mandate. The Senate committee report recommended up to $75.4 million for the GEC, including up to $40 million for countering foreign state propaganda and disinformation. The joint explanatory statement accompanying for the FY2019-enacted legislation ( P.L. 116-6 ) included up to $55.4 million for the GEC and up to $20 million for CSD, a funding level for CSD identical to the department's request. Section 1284 of the National Defense Authorization Act for Fiscal Year 2019 ( P.L. 115-232 ) authorized the Department of Defense (DOD) to transfer not more than $60 million to the GEC for each of FY2019 and FY2020; DOD has previously transferred funds to the GEC under similar authorities. The State Department's FY2019 budget request sought to provide approximately $5.36 billion for the department's key embassy security accounts: $3.70 billion for the Worldwide Security Protection (WSP) programmatic allocation within the Diplomatic Programs account and $1.66 billion for the Embassy Security, Construction, and Maintenance (ESCM) account. The House committee bill would have provided $3.76 billion for WSP and $2.31 billion for ESCM, for a total funding level of $6.07 billion for these accounts. While the House bill would have funded the ESCM account exclusively through the base budget, it would have provided approximately $2.38 billion of overall funding for WSP through OCO. The Senate committee bill would have provided $3.82 billion for WSP and $1.92 billion for ESCM, for a total funding level of $5.74 billion. As with the House committee measure, the Senate committee bill would have funded the ESCM account with base budget funds only. For WSP, the Senate committee measure, like the House committee bill, would provide $2.38 billion of total account funds through OCO. The FY2019 enacted appropriations provided a total of $4.10 billion for WSP and $1.98 billion for ESCM, for a total funding level of $6.08 billion in budget authority for these accounts. Like the House and Senate committee bills, P.L. 116-6 funded ESCM exclusively through the base budget. Of the $4.10 billion provided for WSP in the law, $2.63 billion was done so through OCO. Had the Administration's request been enacted, it would have marked a decline of 2% for WSP and 28% for ESCM relative to the FY2018 figures of approximately $3.76 billion and $2.31 billion, respectively. The enacted legislation provided 9% more funding for WSP and 15% less for ESCM relative to FY2018 levels. Over the past several years, Congress has provided no-year appropriations for both WSP and ESCM, thereby authorizing the State Department to indefinitely retain appropriated funds beyond the fiscal year for which they were appropriated. As a result, the department has carried over large balances of unexpired, unobligated funds each year that it is authorized to obligate for programs within both accounts when it deems appropriate to do so. For example, for FY2018, the State Department carried over more than $7.6 billion in previously appropriated funds for ESCM. Both the House and Senate committee bills would have continued this practice with respect to WSP, and the Senate committee bill would have continued with respect to ESCM, as well. The House committee bill, if enacted, would have provided that all funds appropriated for ESCM remained available until September 30, 2023, rather than indefinitely. P.L. 116-6 provided no-year appropriations for WSP. For ESCM, the law stipulated that while funds for worldwide security upgrades and for purposes of acquisition and construction would remain available until expended, all other monies within this account (such as funds for preserving, maintaining, repairing, and planning for real property that State Department owns) would remain available only until September 30, 2023. The Worldwide Security Protection (WSP) allocation within the Diplomatic Programs account supports the Bureau of Diplomatic Security's (DS's) implementation of security programs located at over 275 overseas posts and 125 domestic offices of the State Department, including a worldwide guard force protecting overseas diplomatic posts, residences, and domestic offices. The State Department revisited previous assumptions for funding for the U.S. security presence, which prompted it to ask for a rescission of $301.20 million for WSP OCO funds provided through the Further Continuing and Security Assistance Appropriations Act, 2017 (SAAA) ( P.L. 114-254 ). State Department officials noted that this funding was "intended to support diplomatic reengagements in Syria, Libya, and Yemen that were predicated on different security and political conditions." The department maintained that this proposed cancellation was based on evolving security and political conditions, and would not affect DS operations. While neither the House nor the Senate committee bill included a rescission, P.L. 116-6 provided for a rescission of $301.2 million of SAAA funds appropriated for Diplomatic Programs and designated them more generally for OCO. The Embassy Security, Construction, and Maintenance (ESCM) account funds the Bureau of Overseas Building Operations (OBO), which is responsible for providing U.S. diplomatic and consular missions overseas with secure, safe, and functional facilities. The State Department's request included $869.54 million to provide its share of what it maintains is the $2.20 billion in annual funding that the Benghazi Accountability Review Board (ARB) recommended for the Capital Security Cost Sharing (CSCS) and Maintenance Cost Sharing (MCS) programs (the remainder of the funding is provided through consular fee revenues and contributions from other agencies). These programs are used to fund the planning, design, and construction of new overseas posts and the maintenance of existing diplomatic facilities. The House committee report maintained that funds the House bill made available for ESCM would allow for the State Department's CSCS and MCS contributions, when combined with those from other agencies and consular fees, to exceed the ARB's annual recommended funding and support " the accelerated multi-year program to construct new secure replacement facilities for the most vulnerable embassies and consulates." The Senate committee bill stipulated that of funds made available for ESCM by it and prior acts making appropriations for SFOPS, not less than $1.02 billion shall be made available for the department's FY2019 CSCS and MCS contributions; the joint explanatory statement accompanying P.L. 116-6 indicated that Congress provided the same amount for this purpose for FY2019. In FY2019, OBO intended to fund four CSCS projects and one MCS project (see Table 4 ). The House committee report noted concern with the cost of new embassy and consulate compound projects, including ongoing projects in Beirut, Lebanon; Mexico City, Mexico; New Delhi, India; Erbil, Iraq; and Jakarta, Indonesia. Like Section 7004(h) of the House bill, as noted in the joint explanatory statement accompanying P.L. 116-6 , Congress mandated that the State Department provide more detailed reports regarding the costs of these projects than previously required. The State Department maintained that the "construction of a new U.S. Embassy facility in Jerusalem is a high priority for the Administration ... planning and interagency coordination for the Jerusalem Embassy move is ongoing and the department intends to realign CSCS project funding, as necessary, to execute this project." It later attached a timeframe to its intent, and the United States opened a new U.S. embassy in Jerusalem in May 2018. This new embassy is located in a building that housed consular operations of the former U.S. Consulate General in Jerusalem. The State Department has said that one of its next steps would be to construct an embassy annex to the current building, while also considering options for a permanent embassy over the long term. The department could choose to draw upon the unexpired, unobligated funds previously appropriated by Congress to the ESCM account for any construction expenses related to interim and permanent embassy facilities in Jerusalem. The Senate committee report requires the Secretary of State to "regularly inform the Committee" on the status of plans for a permanent New Embassy Compound in Jerusalem. Neither P.L. 116-6 nor its joint explanatory statement addresses this issue or negates the Senate committee report language. The State Department's FY2019 budget request included a combined request of $2.29 billion for the Contributions to International Organizations (CIO) and Contributions for International Peacekeeping Activities (CIPA) accounts, a 20% reduction from the FY2018 funding levels for these accounts. The CIO account is the source for funding for annual U.S. assessed contributions to 45 international organizations, including the United Nations and its affiliated organizations and other international organizations, including the North Atlantic Treaty Organization (NATO). The State Department's FY2019 request for CIO totaled approximately $1.10 billion. Following passage of the BBA, the department increased its request for CIO by approximately $100 million to fund a higher U.S. contribution to the U.N. regular budget at a rate of 20% of the overall U.N. budget (the U.S. assessment is 22%). According to the department, U.N. assessments of U.S. contributions to the United Nations and its affiliated agencies exceeded the request for funds to pay these contributions. Therefore, if the department's request was enacted, the United States may have accumulated arrears to some organizations. The Contributions for International Peacekeeping Activities (CIPA) account provides U.S. funding for U.N. peacekeeping missions around the world that the State Department says "seek to maintain or restore international peace and security." The State Department's FY2019 request for CIPA totaled $1.20 billion. According to the department, this request "reflects the Administration's commitment to seek reduced costs by reevaluating the mandates, design, and implementation of peacekeeping missions and sharing the funding burden more fairly among U.N. members." Under this request, no U.S. contribution would have exceeded 25% of all assessed contributions for a single operation, which is the cap established in Section 404(b) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 ( P.L. 103-236 ). The State Department maintained that it expected that the "unfunded portion of U.S. assessed expenses will be met through a combination of a reduction in the U.S. assessed rate of contributions, reductions in the number of U.N. peacekeeping missions, and significant reductions in the budgets of peacekeeping missions across the board." The department also requested that Congress provide two-year funds for CIPA (in other words, that Congress make funds available for both the fiscal year for which the funds were appropriated and the subsequent fiscal year) "due to the demonstrated unpredictability of the requirements in this account from year to year and the nature of multi-year operations that have mandates overlapping U.S. fiscal years." The House committee bill would have provided $1.36 billion for CIO and $1.59 billion for CIPA, for a combined total of $2.95 billion for these accounts, which was 29% higher than the department's request and 4% higher than the FY2018 funding levels. The Senate committee bill would have provided $1.44 billion for CIO and $1.68 billion for CIPA, for a combined total of $3.12 billion. This figure was 36% higher than the department's request and 9% higher than the FY2018 level. The Senate committee bill included a provision not present in recent appropriations laws mandating that funds appropriated for CIO "are made available to pay not less than the full fiscal year 2019 United States assessment for each respective international organization." With regard to CIPA, both the House and Senate committee reports noted that appropriated monies were intended to support an assessed peacekeeping cost at the statutory level of 25% rather than the U.N. assessed rate for the United States of 28.4%. Both committee reports called on the department to review peacekeeping missions for cost savings and work to renegotiate rates of assessment. For FY2019, P.L. 116-6 provided $1.36 billion for CIO and $1.55 billion for CIPA, for a total of $2.91 billion—slightly less than both the House and Senate committee bills. This figure was still 2% higher than the FY2018 figure and 27% higher than the department's request. While the law did not include the aforementioned Senate committee bill provision regarding payment of full U.S. assessments for organizations funded through the CIO account, the law's joint explanatory statement noted that it assumed the payment of the full United States assessment for each relevant organization (with some exceptions, including organizations from which the United States has withdrawn) and required the Secretary of State to consult with the Committees on Appropriations with respect to any decision not to provide the full assessment for any such organization. With respect to CIPA, the joint explanatory statement noted that sufficient funds are provided for contributions to peacekeeping missions at the statutory level of 25%. The enacted legislation, like the House and Senate committee bills, provided a share of CIPA funds as two-year funds, as requested by the department. The State Department requested $246.2 million for FY2019 to implement the Leadership and Modernization Impact Initiative (hereinafter, the Impact Initiative). The Impact Initiative constitutes the implementation phase of the State Department's "Redesign" project. Former Secretary Tillerson initiated the redesign in 2017 to implement Executive Order 13781 and Office of Management and Budget (OMB) Memorandum M-17-22, which aim to "improve the efficiency, effectiveness, and accountability of the executive branch." The Impact Initiative constitutes 16 keystone modernization projects in three focus areas: Modernizing Information Technology and Human Resources Operations; Modernizing Global Presence, and Creating and Implementing Policy; and Improving Operational Efficiencies (see Table 5 ). According to the State Department, these focus areas and modernization projects are derived from the results of the listening tour that former Secretary Tillerson launched in May 2017, which included interviews conducted with approximately 300 individuals that the department said comprised a representative cross-section of its broader workforce, and a survey completed by 35,000 department personnel that asked them to discuss the means they use to help complete the department's mission and obstacles they encounter in the process. Of the $246.2 million requested, $150.0 million was requested from the IT Central Fund (which is funded through funds appropriated by Congress to the Capital Investment Fund account and, separately, expedited passport fees) and $96.2 million from the D&CP account to implement modernization projects. Proceeds from the IT Central Fund were intended to implement projects focused on IT, including modernizing existing IT infrastructure, systems, and applications based on a roadmap to be created in FY2018 and centralizing management of all WiFi networks. Funds from the D&CP account were intended to implement modernization projects focusing on Human Resources issues, including leadership development, management services consolidation, data analytics, and workforce readiness initiatives. Like the House and the Senate committee bills and reports, neither P.L. 116-6 nor the joint explanatory statement accompanying the law specifically mentioned the Impact Initiative by name. However, both the law and the joint explanatory statement included provisions explicitly prohibiting the Department of State from using appropriated funds to implement a reorganization without prior consultation, notification, and reporting to Congress (for example, see Section 7073 of P.L. 116-6 ). Like the Senate committee bill, P.L. 116-6 stated that no funds appropriated for SFOPs may be used to "downsize, downgrade, consolidate, close, move, or relocate" the State Department's Bureau of Population, Refugees, and Migration. Foreign operations accounts, together with food aid appropriated through the Agriculture appropriations bill, constitute the foreign aid component of the international affairs budget. These accounts fund bilateral economic aid, humanitarian assistance, security assistance, multilateral aid, and export promotion programs. For FY2019, the Administration requested $28.60 billion for foreign aid programs within the international affairs (function 150) budget, about 28% less than the FY2018 actual funding level. None of the requested funds were designated as OCO. The FY2019 enacted appropriation provided $37.92 billion for foreign operations account, including $3.63 billion designated as OCO. Together with food aid accounts in the Agriculture appropriation, total enacted foreign aid within the international affairs budget was $39.85 billion, or 0.7% below the FY2018 actual funding level and 39% above the FY2019 request. Table 6 shows foreign aid funding by type for FY2017 and FY2018 actual, and the FY2019 request, committee-approved legislation, and enacted legislation. Account Mergers and Eliminations . The Administration aimed to simplify the foreign operations budget in part by channeling funds through fewer accounts and eliminating certain programs. These account mergers and eliminations were also proposed in the FY2018 budget request Under bilateral economic assistance, the Development Assistance (DA), Economic Support Fund (ESF), Assistance to Europe, Eurasia and Central Asia (AEECA) and Democracy Fund (DF) accounts were zero funded in the FY2019 request. Programs currently funded through these accounts would have been funded through a new Economic Support and Development Fund (ESDF) account. The proposed funding level for ESDF, $5.063 billion, was more than 36% below the FY2018 funding for the accounts it would have replaced. Fifteen countries that received DA, ESF, or AEECA in FY2017 would no longer have received funding from these accounts or from ESDF under the FY2019 request. Within multilateral assistance, the International Organizations & Programs (IO&P) account, which funds U.S. voluntary contributions to many U.N. entities, including UNICEF, U.N. Development Program, and UN Women, would also have been zeroed out. Budget documents suggested that some unspecified activities currently funded through IO&P could have received funding through the ESDF or other accounts. Related to humanitarian assistance, the P.L. 480 Title II food aid account in the Agriculture appropriation would have been zero-funded and all food assistance would have been funded through the International Disaster Assistance (IDA) account, which would have nevertheless declined by about 17% from FY2018 actual funding (see " Humanitarian Assistance " section below). The Emergency Refugee and Migration Assistance (ERMA) account would have been subsumed into the Migration and Refugee Assistance (MRA) account. Closeout of Inter-American Foundation and U.S.-Africa Development Foundation . The FY2019 request proposed to terminate the Inter-American Foundation (IAF) and the U.S.-Africa Development Foundation (ADF), independent entities that implement small U.S. assistance grants, often in remote communities. The Administration proposed to consolidate all small grant programs aimed at reaching the poor under USAID, as a means of improving their integration with larger development programs and U.S. foreign policy objectives, as well as improving efficiency. Funds were requested for IAF and ADF only for the purposes of an orderly closeout. Development Finance Institution . The Administration requested, for the first time in FY2019, the consolidation of the Overseas Private Investment Corporation (OPIC) and USAID's Development Credit Authority (DCA) into a new standalone Development Finance Institution (DFI). The request called for $96 million for administrative expenses and $38 million for credit subsidies for DFI, but assumed that these expenses would be more than offset by collections, resulting in a net income of $460 million (based on OPIC's projected offsetting collections). In addition, $56 million in ESDF funds would have been used to support DFI activities. The Administration sought congressional authority for the new standalone entity, which it described as a means of incentivizing private sector investment in development and improving the efficiency of U.S. development finance programs. Both the House and Senate committee bills, as well as the enacted FY2019 appropriation, rejected these account changes, with the exception of the elimination of the ERMA account, which the House bill eliminated and the Senate and final bill funded with $1 million. All the FY2019 SFOPS legislation, including P.L. 116-6 , used the same bilateral account structure used for FY2018, not a new ESDF, and funded IAF and ADF at the FY2018 levels. Prior to enactment of the final FY2019 SFOPS appropriation, Congress passed the BUILD Act ( P.L. 115-254 ), which authorized the establishment of a new International Development Finance Corporation (IDFC), consistent with the Administration's DFI proposal. The IDFC is expected to become operational near the end of FY2019, and P.L. 116-6 made FY2019 appropriations for OPIC and DCA using the same account structure as in prior years, but authorized $5 million in the OPIC noncredit account to be used for transition costs. Top Country Recipients . Under the FY2019 request, top foreign assistance recipients would not have changed significantly, continuing to include strategic allies in the Middle East (Israel, Egypt, Jordan) and major global health and development partners in Africa (see Table 7 ). Israel would have seen an increase of $200 million from FY2017, reflecting a new 10-year security assistance Memorandum of Understanding. Zambia and Uganda would both have seen an 11% increase. All other top recipients would have seen reduced aid in FY2019 compared with FY2017 (comprehensive FY2018 country allocations were not yet available), though unallocated global health and humanitarian funds (added to the request after passage of the Bipartisan Budget Act of 2018) may have changed these totals. Figure 1 and Table 7 show the requested FY2019 foreign operations budget allocations by region and country. Under the FY2019 request, foreign assistance for every region would have been reduced compared to FY2018 funding. The Middle East and North Africa (MENA) region and Sub-Saharan Africa would continue to be the top regional recipients, together comprising nearly 80% of aid allocated by region ( Figure 2 ). Proposed cuts ranged from 61% in Europe and Eurasia to 2% in the MENA. Aid to Sub-Saharan Africa would have declined by 31%, aid to East Asia and Pacific by approximately half (51%), aid to South and Central Asia by about 4%, and aid to Western Hemisphere by 35%. The House bill ( H.R. 6385 ) and accompanying report did not provide comprehensive country and regional allocations, but did specify aid levels for some countries and regional programs, including Israel ($3.300 billion), Egypt ($1.457 billion), Jordan ($1.525 billion), Ukraine ($441 million), the U.S. Strategy for Engagement in Central America ($595 million), and the Countering Russian Influence Funds ($250 million). The Senate bill ( S. 3108 ) and report specified aid allocations for several countries and regional programs, including Israel ($3.300 billion), Egypt ($1.082 billion), Jordan ($1.525 billion), Iraq ($429 million), West Bank & Gaza ($286 million), Afghanistan ($698 million), Pakistan ($271 million), Colombia ($391 million), Ukraine $426 million), U.S. Strategy for Engagement in Central America ($515 million) and the Countering Russian Influence Fund ($300 million). The enacted legislation, P.L. 116-6 , and the accompanying explanatory statement, specified FY2019 aid levels for several countries, including Israel ($3.300 billion), Egypt ($1.419 billion), Jordan ($1.525 billion), Iraq ($407 million), Colombia ($418 million), Mexico ($163 million), and Ukraine ($446 million), as well as for the U.S. Strategy for engagement in Central America ($528 million) and the Countering Russian Influence Fund ($275 million). The budget submission did not identify any new foreign assistance initiatives. The FY2019 request called for decreases in foreign aid funding generally while continuing to prioritize the aid sectors that have long made up the bulk of U.S. foreign assistance: global health, humanitarian, and security assistance. The Administration requested $6.70 billion for global health programs in FY2019. This was a 23% reduction from the FY2018 funding level, yet global health programs would have increased slightly as a proportion of the foreign aid budget, from 22% of total aid in FY2018 to 23% in the FY2019 request, due to deeper proposed cuts elsewhere. HIV/AIDS programs, for which funding would have been cut about 27% from FY2018 actual levels, would have continued to make up the bulk (69%) of global health funding, as they have since the creation of the President's Emergency Plan for AIDS Relief (PEPFAR) in 2004. Family planning and reproductive health services (for which the Administration proposed no funding for FY2018) would have received $302 million, a 42% reduction from FY2018 funding. Assistance levels would have been reduced for every health sector compared to FY2018, including maternal and child health (-25%), tuberculosis (-31%), malaria (-11%), neglected tropical diseases (-25%), global health security (-0.1%, funded through a proposed repurposing of FY2015 Ebola emergency funds), and nutrition (-37%). The House committee bill included $8.69 billion for global health programs, the same as FY2018 funding. While total funding would remain the same, the House proposal would have reduced funding for family planning and reproductive health by about 12% compared to FY2018, while slightly increasing funding for polio, nutrition, and maternal and child health, and more than doubling funding for global health security and emerging threats. The Senate committee bill would have funded global health programs $8.792 billion, 1.2% above the FY2018 level. No subsectors would have received reduced funding and allocations for tuberculosis, HIV/AIDS, family planning, nutrition, neglected tropical diseases and vulnerable children would all have increased slightly. While both bills included long-standing language preventing the use of appropriated funds to pay for abortions, the House bill, but not the Senate bill, also included a provision prohibiting aid to any foreign nongovernmental organizations that "promotes or performs" voluntary abortion, with some exceptions, regardless of the source of funding for such activities. P.L. 116-6 provides $8.84 billion for global health programs for FY2019, a 1.7% increase over FY2018 funding. Every health subsector was funded at the same or slightly higher level than in FY2018. The Trump Administration's FY2019 budget request for humanitarian assistance totaled $6.358 billion, which was roughly 32% less than FY2018 actual funding ($9.37 billion) and about 22% of the total FY2019 foreign aid request. The request included $2,800.4 million for the Migration and Refugee Assistance (MRA) account (-17% from FY2018) and $3,557.4 million for the International Disaster Assistance (IDA) account (-17%) ( Figure 2 ). As in its FY2018 request, the Administration proposed to eliminate the Food for Peace (P.L. 480, Title II) and Emergency Refugee and Migration Assistance (ERMA) accounts, asserting that the activities supported through these accounts can be more efficiently and effectively funded through the IDA and MRA accounts, respectively. (Congress did not adopt the proposed changes to Food for Peace for FY2018, appropriating $1.716 billion for the account through the Agriculture appropriation, but did appropriate only $1 million for ERMA, a 98% reduction from FY2017 funding.) The Administration also sought authority to transfer and merge IDA and MRA base funds (current authority only applies to OCO-designated funds). The Administration described its IDA request as focused "on crises at the forefront of U.S. security interests, such as Syria, Iraq, Yemen, Nigeria, Somalia, and South Sudan." The MRA request focused on "conflict displacement in Afghanistan, Burma, Iraq, Somalia, South Sudan, Syria and Yemen," as well as strengthening bilateral relationships with "key refugee hosting countries such as Kenya, Turkey, Jordan, Ethiopia and Bangladesh." Consistent with last year, the request suggested that the proposed funding reduction assumes that other donors will shoulder an increased share of the overall humanitarian assistance burden worldwide. The House committee bills proposed $9.145 billion for humanitarian assistance accounts, about 2% less than FY2018 funding. The total included $1.5 billion for Food for Peace from the Agriculture appropriation but would not have funded the ERMA account. The Senate committee bills proposed $9.534 billion for humanitarian assistance, about 2% more than FY2018 funding. The total included $1.716 billion for Food for Peace and $1 million for the ERMA account. Neither bill included language authorizing broad transfers and mergers between the IDA and MRA base funding account, though both bills include provisions allowing for the transfer and merger of funds from several accounts, including IDA and MRA, as an extraordinary measure in response to a severe international infectious disease outbreak. As in FY2018, Congress did not adopt the significant humanitarian aid changes proposed by the Administration. P.L. 116-6 provided a total of $9.534 billion for humanitarian assistance in FY2019, almost level with FY2018 funding (-0.5%), of which about 21% was designated as OCO. This total included $3.434 billion in MRA funds, $1 million for ERMA, and $4.385 billion for IDA in the SFOPS division of the bill, as well as $1.716 billion for Food for Peace in the Agriculture division. The FY2019 security assistance request within foreign operations accounts totaled $7.304 billion, a 19% reduction from the FY2018 actual funding level and about 26% of the total foreign aid request. Consistent with recent years, 63% of the entire security assistance request was for FMF aid to Israel and Egypt. However, six countries were identified in the request as joint Department of Defense (DOD) and State Department security sector assistance priorities: Philippines, Vietnam, Ukraine, Lebanon, Tunisia, and Colombia. The International Narcotics Control and Law Enforcement (INCLE) account would have been reduced by about 36% from FY2018 actual levels, Nonproliferation, Antiterrorism, Demining and Related (NADR) by 21%, and International Military Education and Training (IMET) by about 14%. In each of these cases, the Administration described the proposed reductions as concentrating resources where they offer the most value and U.S. national security impact. As in the FY2018 request, the Peacekeeping Operations (PKO) account, which supports most non-U.N. multilateral peacekeeping and regional stability operations, including U.S. training and equipment for African militaries and funding for the U.N. Support Office in Somalia (UNSOS), would have seen the biggest reduction (-46%) under the FY2019 request. This is because Administrations generally request UNSOS funds through the CIPA account, while Congress usually funds the office through the PKO account. The Foreign Military Financing (FMF) account would have been reduced by 13% compared to FY2018, with specific allocations for 11 countries and a proposed $75 million Global Fund to be allocated flexibly. This was a notable change from the FY2018 FMF request, in which funds were allocated to four countries and a larger global fund, and from FY2018-enacted funding, for which allocations were specified for more than 20 countries. The House committee bill would have provided $9.274 billion for security assistance, a 3% increase over FY2018 funding, with funding increases proposed for the INCLE (+7%) and FMF (+4%) accounts and a reduction proposed for the PKO account (-9%). Consistent with the request, and in contrast to recent year appropriations, no security assistance funding in the House committee bill was designated as OCO. The Senate committee bill included $8.789 billion for security assistance programs, a 2.6% total decrease from FY2018 funding. The INCLE account would have increased by 2.6% while the FMF and PKO accounts would be reduced by 3% and 11%, respectively. About 16% of the security assistance funding in the Senate bill was designated as OCO. In the final FY2019 appropriation, P.L. 116-6 , security assistance funding totaled $9.153 billion, a 1.4% increase from FY2018. Of the total, $555 million within the PKO and FMF accounts (6% of total security funding) was designated as OCO. Funding provided for most accounts was similar to FY2018 levels, with the exception of INCLE, which increased by 9.4% in part to support increased efforts to address the flow of illegal opioids, and PKO, for which funding decreased by about 9.2%. Bilateral economic development assistance is the broad category that includes programs focused on education, agricultural development and food security, good governance and democracy promotion, microfinance, environmental management, and other sectors. While the majority of this aid is implemented by USAID, it also includes the programs carried out by the independent Millennium Challenge Corporation (MCC), Peace Corps, Inter-American Foundation and the U.S.-Africa Development Foundation. Excluding global health assistance, bilateral economic development assistance in the Administration's FY2019 request totaled $6.354 billion, a 33% reduction from FY2018 funding levels. Proposed FY2019 allocations for key sectors, compared with FY2018 levels prescribed in legislation, included the following: food security, $518 million (-48% from FY2018); democracy promotion programs, $1,235 million (-47% from FY2018); and education, $512 million (-51% from FY2018). The Administration requested $800 million for MCC and $396 million for Peace Corps, representing cuts of 12% and 3%, respectively. As discussed above, the budget request also proposed to merge I-AF and USADF into USAID, and requested only small amounts of funding to close out their independent activities. The House committee bill would have provided $9.383 billion for economic development assistance and specified allocations for several development sectors, including education ($1.035 billion), conservation programs ($360 million), food security and agricultural development ($1.001 million), microenterprise and microfinance ($265 million), water and sanitation ($400 million) and democracy programs ($2.4 billion). The Senate committee bill would have provided $9.764 billion for economic development activities and specifies allocations for education ($750 million), environment and renewable energy ($943 million), food security and agricultural development ($1.001 billion), small and micro credit ($265 million), water and sanitation ($435 million), and democracy programs ($2.4 billion), among others. Both the House and Senate bills would have funded the I-AF, USADF, Peace Corp, and MCC at the FY2018 funding level, and both bills explicitly rejected the Administration's proposal to merge I-AF and USADF into USAID. The enacted appropriation for FY2019, P.L. 116-6 , provided about $9.239 billion for nonhealth economic development aid. Minimum allocations specified for key sectors included $1.035 billion for education (basic and higher), $285 million for biodiversity conservation, $125 million for sustainable landscapes, $1.001 billion for food security and agricultural development, $265 million to support micro and small enterprises, $67 million to combat trafficking in persons, and $435 million for water and sanitation programs. The independent agencies were all funded at the same level as in FY2018. Appendix A. State Department, Foreign Operations, and Related Agencies Appropriations, by Account Appendix B. International Affairs Budget The International Affairs budget, or Function 150, includes funding that is not in the Department of State, Foreign Operations, and Related Programs appropriation: foreign food aid programs (P.L. 480 Title II Food for Peace and McGovern-Dole International Food for Education and Child Nutrition programs) are in the Agriculture Appropriations, and the Foreign Claim Settlement Commission and the International Trade Commission are in the Commerce, Justice, Science appropriations. In addition, the Department of State, Foreign Operations, and Related Programs appropriation measure includes funding for certain international commissions that are not part of the International Affairs Function 150 account. Appendix C. SFOPS Organizational Chart Appendix D. Glossary
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The Trump Administration submitted to Congress its FY2019 budget request on February 12, 2018. The proposal included $41.86 billion for the Department of State, Foreign Operations, and Related Programs (SFOPS). Of that amount, $13.26 billion was for State Department operations, international broadcasting, and related agencies, and $28.60 billion for foreign operations. With the enactment of the Bipartisan Budget Act of 2018 (BBA; P.L. 115-123, February 9, 2018), which raised discretionary spending limits set by the Budget Control Act of 2011 (BCA; P.L. 112-25), the Administration's FY2019 foreign affairs funding request was entirely within enduring (base) funds; no Overseas Contingency Operations (OCO) funding was included the SFOPS request for the first time since FY2012. The FY2019 request would have represented a 23.3% decrease in SFOPS funding compared with FY2018 actual funding levels. The proposed State and related agency funding would have been 18.7% below FY2018 funding and the foreign operations funding would have been reduced by 25.2%. In the State and related programs budget, cuts were proposed for several accounts, including the diplomatic security accounts, contributions to international organizations, and contributions for international peacekeeping activities. In the foreign operations budget, cuts would have been applied across all accounts, with disproportionately large cuts proposed for humanitarian assistance, multilateral assistance, and funding for bilateral development programs focused on agriculture, education, and democracy promotion. Both the House and Senate appropriations committees approved FY2019 SFOPS bills that included funding at higher levels than the Administration requested and closer to FY2018 funding. H.R. 6385, approved by the House appropriations committee on June 20, 2018, would have funded SFOPS accounts at $54.177 billion. S. 3108, approved by the Senate appropriations committee on June 21, 2018, would have provided $54.602 billion for SFOPS accounts. FY2019 began with seven appropriations bills, including SFOPS, unfinished. Congress and the President approved continuing resolutions to fund the affected federal agencies through December 21, 2018 at the FY2018 level (P.L. 115-245, Division C and P.L. 115-298). After December 21, a partial shutdown of the government, including SFOPS funded agencies, occurred. On January 25, 2019, an agreement was reached to continue funding for SFOPS and other appropriations that had lapsed through February 15, at the FY2018 level (P.L. 116-5). On February 14, Congress passed, and the President later signed into law, a full year omnibus appropriation that included SFOPS funding (P.L. 116-6, Division F). P.L. 116-6 included a total of $54.377 billion for SFOPS accounts in FY2019, a 0.3% decrease from the FY2018 funding level and about 30% more than the Administration's request. Of that enacted total, $8.0 billion, or 14.7%, was designated as OCO. This report provides an account-by-account comparison of the FY2019 SFOPS request, House and Senate SFOPS legislation and the final FY2019 SFOPS appropriation to FY2018 funding in Appendix A. The International Affairs (function 150) budget in Appendix B provides a similar comparison. This report will not be further updated unless there is further congressional activity on FY2019 appropriations.
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The combination of growing supplies of liquefied natural gas (LNG) and new requirements for less polluting fuels in the international maritime shipping industry has heightened interest in LNG as a maritime fuel. For decades, LNG tanker ships have been capable of burning boil-off gas from their LNG cargoes as a secondary fuel. However, using LNG as a primary fuel is a relatively new endeavor; the first LNG-powered vessel—a Norwegian ferry—began service in 2000. Several aspects of LNG use in shipping may be of congressional interest. LNG as an engine, or "bunker," fuel potentially could help the United States reduce harmful air emissions, it could create a new market for domestic natural gas, and it could create economic opportunities in domestic shipbuilding. However, U.S. ports would need specialized vessels and land-based infrastructure for LNG "bunkering" (vessel refueling) as well as appropriate regulatory oversight of the associated shipping and fueling operations. The storage, delivery, and use of LNG in shipping also has safety implications. These and other aspects of LNG bunkering may become legislative or oversight issues for Congress. One bill in the 115 th Congress, the Waterway LNG Parity Act of 2017 ( S. 505 ), would have imposed excise taxes on LNG used by marine vessels on inland waterways. This report discusses impending International Maritime Organization (IMO) standards limiting the maximum sulfur content in shipping fuels, the market conditions in which LNG may compete to become a common bunker fuel for vessel operators, and the current status of LNG bunkering globally and in the United States. A broader discussion of oil market implications is outside the scope of this report. The IMO is the United Nations organization that negotiates standards for international shipping. Its standards limiting sulfur emissions from ships, adopted in 2008, have led vessel operators to consider alternatives to petroleum-based fuels to power their ships. In 1973, the IMO adopted the International Convention for the Prevention of Pollution from Ships (MARPOL). Annex VI of the convention, which came into force in 2005, deals with air pollution from ships. The annex established limits on nitrogen oxide (NO x ) emissions and set a 4.5% limit on the allowable sulfur content in vessel fuels. In 2008, the IMO announced a timeline to reduce the maximum sulfur content in vessel fuels from 4.5% to 0.5% by January 1, 2020. Annex VI requires vessel operators to either use fuels containing less than 0.5% sulfur or install exhaust gas-cleaning systems ("scrubbers") to limit a vessel's sulfur oxide (SO x ) emissions to a level equivalent to the required sulfur limit. MARPOL is implemented in the United States through the Act to Prevent Pollution from Ships (). The United States effectively ratified MARPOL Annex VI in 2008 when President Bush signed the Maritime Pollution Prevention Act ( P.L. 110-280 ). The act requires that the U.S. Coast Guard and the Environmental Protection Agency (EPA) jointly enforce the Annex VI emissions standards. MARPOL's Annex VI requirements are codified at 40 C.F.R. §1043. They apply to U.S.-flagged ships wherever located and to foreign-flagged ships operating in U.S. waters. In addition to its global sulfur standards, MARPOL Annex VI provides for the establishment of Emissions Control Areas (ECAs), which are waters close to coastlines where more stringent emissions controls may be imposed. The North American ECA limits the sulfur content of bunker fuel to 0.1% of total fuel weight, an even lower bar than that set by the IMO 2020 standards. This standard is enforced by Coast Guard and EPA in waters up to 200 miles from shore. Currently, most ships operating in the North American ECA meet the emissions requirements by switching to low-sulfur fuels once they enter ECA waters. The European Union also has an ECA with a 0.1% limit on sulfur in bunker fuels, and the Chinese government is considering putting the same standard in place. The IMO 2020 emissions requirement applies to vessels of 400 gross tons and over, which is estimated to cover about 110,000 vessels worldwide. However, analysts indicate that many of the smaller vessels in this group already burn low-sulfur fuel. Accounting for these smaller vessels, one estimate is that about 55,000 vessels currently burn high-sulfur fuel. Ship owners have two main options for meeting the emission requirements with existing engines: burn low-sulfur conventional fuel (or biofuels) or install scrubbers to clean their exhaust gases. Alternatively, ship owners may opt to install new LNG-fueled engines to comply with the IMO standard. The simplest option for vessel owners to comply with the IMO sulfur standards, and the one that appears most popular, is switching to low-sulfur fuel oils or distillate fuels. Although switching to low-sulfur fuels would increase fuel costs compared to conventional, high-sulfur fuels, it would require little or no upfront capital cost and would allow ocean carriers to use existing infrastructure to bunker ships at ports. Anticipating widespread adoption of this approach, many analysts predict that the implementation of the IMO 2020 regulations will drive up demand for low-sulfur fuel and, therefore, significantly increase its price above current levels. Such a trend could also reduce demand for high-sulfur fuels, increasing the price spread between low- and high-sulfur bunkers fuels. Switching to lower-sulfur fuel could increase fuel cost across the industry by up to $60 billion in 2020 for full compliance with the IMO standards. Moreover, while it may allow vessels to meet the existing IMO sulfur standards, low-sulfur fuel does not necessarily support compliance with potential future IMO emissions standards, especially with respect to greenhouse gases (GHGs) such as carbon dioxide (CO 2 ) discussed later in this report. Scrubbers are systems which remove sulfur from a vessel's engine exhaust emissions. A ship with a scrubber would be capable of meeting the IMO 2020 standard while using conventional high-sulfur fuel. Retrofitting a scrubber on an existing engine can cost several million dollars, however, before factoring in the lost revenue from taking the ship out of service for a month for the installation. Therefore, while using a scrubber will allow a ship to continue using (currently) cheaper high-sulfur fuel, it may take years to recover the initial investment. For example, one industry study estimates that, in the case of a typical tanker, a scrubber installation could cost $4.2 million with a payback time of approximately 4.8 years. Furthermore, scrubbers installed to capture sulfur emissions might have to be further refitted or replaced to comply with any future IMO standards for GHG emissions. The rate of scrubber adoption could affect the financial impacts of installing them in terms of fuel costs. Scrubbers ultimately offset some or all of their initial costs because they allow vessel operators to continue using relatively inexpensive high-sulfur fuel. However, the return on investment for scrubbers depends on the relative prices of high- and low-sulfur bunker fuels. The demand—and therefore, prices—for low-sulfur and high-sulfur fuels will be affected by how many vessels use the respective fuels under the IMO standards that take effect in 2020. For example, limited scrubber adoption could result in more vessels demanding more low-sulfur fuel oil, creating upward pressure on low-sulfur fuel prices. Under such a scenario, scrubbers would provide greater fuel cost savings for vessels that installed them. Alternatively, high-sulfur fuel could become more costly due to refinery production cutbacks (because shippers will not be allowed to burn it without scrubbers). In this case, the economic benefits of scrubbers would be diminished. Given the uncertain fuel supply and demand dynamics, it is difficult for vessel operators to know how big the market distortions from scrubber installation could be or how many other operators may choose to install scrubbers. As of September 2018, there were approximately 660 ships retrofitted with scrubbers and over 600 ships under construction with plans to install scrubbers. By 2020, projecting additional construction orders, some analysts predict about 2,000 vessels could have scrubbers installed. However, even with higher demand for the technology, the ability of vessel owners to install scrubbers is constrained; analysts estimate that current maximum capacity for installing scrubbers is be between 300 to 500 ships per year. Another option for ship owners to comply with the IMO 2020 sulfur standards is to switch to engines that burn LNG as a bunker fuel. LNG-fueled vessels emit only trace amounts of sulfur oxides in their exhaust gases—well below even the 0.1% fuel-equivalent threshold in some of the ECA zones—so they would be fully compliant with the IMO standards. As a secondary benefit, using LNG as an engine fuel also would reduce particulate matter (PM) emissions relative to both high- and low-sulfur marine fuel oils. Furthermore, LNG vessels have the potential to emit less CO 2 than vessels running on conventional, petroleum-based fuels. However, LNG vessels would have the potential to result in more fugitive emissions of methane, another GHG, because methane is the primary component of natural gas, further discussed below. Installing an LNG-fueled engine can add around $5 million to the cost of a new ship. Retrofitting existing ships appears to be less desirable because of the extra space required for the larger fuel tanks (new ships can be designed with the larger fuel tanks). The costs of retraining crews to work with LNG engines could also factor into a vessel operator's decision about switching to LNG. However, apart from their lower emissions, LNG-fueled engines may offset their capital costs with fuel cost advantages over engines burning petroleum-derived fuels. These savings would depend on the price spread between natural gas and fuel oil—which has been volatile in recent years. The likelihood that switching to LNG will produce long-term fuel costs savings relative to conventional fuels is, therefore, a critical consideration for many vessel owners. The 1920 Merchant Marine Act (known colloquially as the Jones Act) requires that vessels engaged in U.S. domestic transport be built domestically. Many newly built domestic ships receive a federal loan guarantee under the Maritime Administration's so-called "Title XI" program. In 2014, the program was modified to include the use of "alternative energy technologies" to power ships as part of the relevant criteria in evaluating a loan application. The Maritime Administration counts LNG-fueled engines as an "alternative energy technology" and may be more likely to approve loan applications for ships with LNG-capable engines. Since the North American ECA was established in 2015, Jones Act coastal ship operators have taken steps to transition their fleets to use cleaner burning fuels, including LNG. The three Jones Act operators that ship dry goods to Alaska, Hawaii, and Puerto Rico have taken delivery or have ordered LNG-fueled and LNG-capable vessels from U.S. shipyards in Philadelphia, PA, and Brownsville, TX. Harvey Gulf International has put into service five LNG-powered offshore supply vessels that service offshore oil rigs. Some Jones Act tanker operators that have recently built or ordered vessels have chosen to install LNG-ready engines while other operators have chosen to install scrubbers on their existing fleet. Ship engines and scrubbers for the Jones Act fleet do not have to be manufactured in the United States because they are not considered an integral part of the hull or superstructure of a ship. Seagoing barges, known as articulated tug barges, are also a significant portion of the domestic coastal fleet, especially for moving liquid cargoes. However, these vessels traditionally have burned lower-sulfur fuels and thus the ECA has not prompted fleet conversions. IMO fuel requirements do not apply to river barges operating on the nation's inland waterway system, although this fleet potentially could be a market for LNG as fuel. Bunkering vessels (small tankers with hoses for refueling ships) in U.S. waters must also be Jones Act compliant. Barges are the predominant method for bunkering ships in U.S. ports. An LNG bunkering vessel for the Port of Jacksonville—the first Jones Act-compliant LNG bunkering vessel to enter service in the United States—was built in 2017 by Conrad Shipyards in Orange, TX. Recent energy sector trends suggest that LNG may be cheaper in the long-run than petroleum-based, low-sulfur fuels. However, these price movements are correlated to some extent. Many existing long-term LNG contracts link LNG prices to oil prices (although such contract terms are on the decline), even in the spot market. Starting in 2008, the advent of shale natural gas production dramatically decreased natural gas prices in the United States. Natural gas spot prices in the United States at the Henry Hub—the largest U.S. trading hub for natural gas—averaged around $3/MMBtu (million British Thermal Units) in 2018, about a quarter of the peak in average price a decade before, just prior to the shale gas boom ( Figure 1 ). Liquefying natural gas into LNG adds around $2/MMBtu to the production cost. Including additional producer charges and service costs would bring the total cost of LNG available at a U.S. port (based on the 2018 average price in Figure 1 ) to approximately $6/MMBtu. Shipping of LNG from the United States to Asia or Europe adds from $1 to $2/MMBtu, so, based on the 2018 average cost in Figure 1 , LNG delivered to a port overseas would cost on the order of $7 to $8/MMbtu under long-term contracts, depending upon timing and location. Higher or lower prices could occur for specific long-term contracts and in the LNG spot market (i.e., for individual cargoes), based on the location and the supply and demand balance at the time. In general, the U.S. market will have the lowest-priced LNG. Northern Asia will have the highest LNG prices due to the region's comparative lack of pipeline gas supplies and its distance from LNG suppliers. Figure 2 compares LNG spot market prices in the Japan LNG market—the highest-priced LNG market—to spot prices for two common petroleum-based bunker fuels, low-sulfur gas oil and high-sulfur fuel oil. As the figure shows, over the last five years, Japan LNG generally has been cheaper than low-sulfur fuel and more expensive than high-sulfur fuel on an energy-equivalent basis (i.e., per MMbtu). However, Japan LNG and high-sulfur fuel prices converged in 2018. As the figure shows, spot prices for LNG deliveries to the Japan market fell below $6/MMBtu in 2016 from a high above $16/MMBtu in 2013. Likewise, low-sulfur gas oil prices have doubled, and high-sulfur fuel oil prices have tripled, since 2016. The volatility of the bunker fuel markets and the global LNG market lead to considerable unpredictability about the relative prices among fuels going forward. LNG may become increasingly price-competitive versus low-sulfur fuel as the 2020 IMO sulfur standards take effect. As discussed above, many analysts predict prices for low-sulfur gas oil, which are already higher than those for high-sulfur fuel oil, to increase significantly after 2020 due to a standards-driven rise in demand. Although fuel prices as shown in Figure 2 indicate favorable economics for LNG versus low-sulfur fuel, if prices for high-sulfur fuel oils collapse as some expect after the 2020 IMO regulations enter into force, it is possible that LNG could lose its price advantage over residual fuel oils. Likewise, the price spread between low-sulfur gasoil and high-sulfur fuel oil would increase, incentivizing more carriers to install scrubbers to capitalize on the savings in fuel costs by continuing to burn high-sulfur fuel. An additional complication is the variability of LNG prices by region. Many shipping lines are global operators seeking low-priced fuel worldwide, but unlike the global oil market, natural gas markets are regional. Because the price of LNG can vary significantly by region, the relative economics of LNG versus other bunker fuels would also vary by region. Another uncertainty in the market for LNG bunkering is the discrepancy between the spot price for traded LNG and the price for LNG sold as bunker fuel in ports. Added costs associated with marketing, storing and transporting LNG in bunkering operations (discussed below) would likely require ports to charge a rate for LNG bunker fuel above spot market prices. These additional overhead costs are likely to vary among ports. Before factoring in any effect of IMO standards on fuel prices, and assuming a favorable LNG-fuel oil price spread, it still could take years for the savings generated by using LNG to pay back the capital costs of switching fuels. Through May 2018, there were 122 LNG-powered vessels in operation and another 135 ordered or under construction. Many of the first LNG vessels delivered and ordered were Norwegian-flagged vessels, as the Norwegian government has subsidized LNG-fueled vessels with a "NO x Fund." The fund provides LNG-operated ships with an exemption from the country's tax on NO x emissions. As an alternative to committing to LNG as a fuel, some vessel owners may hedge their bets by opting to install "LNG-ready" engines, which can burn low-sulfur fuel oil currently, but are designed to make future LNG conversion easier. The number of LNG ships that may be in operation by 2030 is difficult to predict. First, as noted above, growth in LNG powered vessels is likely to be driven primarily by new builds rather than retrofits. However, the shipping industry has experienced nearly a decade of vessel overcapacity and slow growth. Weak growth in the shipping industry could result in slower growth in vessel orders overall and, therefore, fewer orders for LNG-powered vessels. Of new vessels ordered, or set to be delivered, in 2018 or after, 13.5% (by tonnage) are LNG-fueled—up from 1.4% in 2010. If this trend continues, demand for LNG from the shipping industry could still be relatively high, even if overall growth in the shipping industry remains slow. Because LNG bunkering infrastructure among global ports is currently limited, vessels that use large amounts of fuel and travel predictable routes—along which LNG is available—are the most suitable for LNG fuel. For this reason, cruise ships, vehicle ferries, and container ships initially may be the most likely vessel types to adopt LNG as bunker fuel. Order books have reflected this assessment: one quarter of all cruise ships on order by tonnage at the end of 2017 were LNG-powered. Likewise, a major container ship line, CMA CGM, recently announced that it was ordering nine extra-large container ships powered by LNG. The carrier stated that the fuel tanks will displace space for "just a few containers" and said it intends to refuel these ships just once on their round trip voyages between Asia and Europe. Conversely, LNG fuel adoption may be less likely for oil tankers. Half the global oil tanker fleet operates on the shipping spot market (also known as the "tramp" market), meaning that ship owners enter into contracts with cargo owners only for a single voyage. In this kind of trade, many oil tankers lack a consistent route. Having to limit spot contracts only to ports that may bunker LNG could reduce the arbitrage opportunities of tankers. Dry bulk cargo vessels (carrying grain, coal, and other commodities) also typically operate in the tramp market. LNG-powered vessels have lower direct exhaust emissions than comparable vessels using petroleum-derived fuels. However, the lifecycle—or "well-to-wake"—GHG emissions (especially of methane) and of volatile organic compound emissions from natural gas production, transportation, and liquefaction complicates the comparison. One study in 2015 concluded, "performing a ['well-to-wake'] GHG study on LNG used as a marine fuel is more complex than previously thought. Further studies are needed ... to investigate this subject." A 2016 study found that the relative GHG emissions benefits of LNG versus conventional fuel oil on a "well-to-wake" basis was highly dependent upon fugitive methane emissions in the LNG supply chain. A 2017 study funded by NGVA Europe, an association which promotes the use of natural gas in vehicles and ships, concluded that LNG as a bunker fuel provides a 21% well-to-wake reduction in GHG emissions compared to convention fuel oil. Evaluating such studies is beyond the scope of this report, although they indicate uncertainty about environmental benefits of LNG fuel, which may require further examination. Despite concerns over lifecycle emissions from the natural gas supply chain, in the short term, ships that pair LNG engines with newer vessel designs could reduce onboard GHG emissions. However, whether these GHG emission reductions would be sufficient to meet the future standards could become another issue for ship owners. The IMO has set a provisional goal of reducing GHG emissions from ships by 50% by 2050. Depending upon the state of engine technology, LNG-fueled ships might become less viable if GHG limits were to be established well before 2050. Concerns about such GHG limits might lead to a decrease in orders of LNG-powered ships over time. Commercial vessels have a typical lifespan of over 20 years, so firms ordering new ships have to take into account compliance with potential standards issued decades in the future. If renewable fuels, such as biodiesel, become more available and cheaper in the coming decades, renewable fuel-powered ships may take over part of the market that LNG-powered ships could occupy. A key requirement for ocean carriers to adopt LNG as an engine fuel is the availability of LNG bunkering facilities. Because LNG is extremely cold (-260 °F) and volatile, LNG bunkering requires specialized infrastructure for supply, storage, and fuel delivery to vessels. Depending upon the specific circumstances, LNG bunkering could require transporting LNG to a port from an offsite liquefaction facility for temporary storage at the port, or building an LNG liquefaction terminal on site. Alternatively, LNG could be delivered from offsite facilities directly to vessels in port via truck or supply vessel ( Figure 3 ). Truck-to-vessel LNG bunkering, in particular, provides some fueling capabilities without large upfront capital investments. LNG tanker trucks could also bring LNG to a storage tank built on site at the port, which could then bunker the LNG to arriving ships via pipeline. Supplying LNG using tanker trucks in this way may face capacity limitations due to truck size, road limitations, or other logistical constraints, but it has been demonstrated as a viable approach to LNG bunkering at smaller scales. The predominant method of bunkering today with high-sulfur fuel is vessel to vessel, either by a tank barge or smaller tanker. The type of infrastructure needed to temporarily store (if needed) and deliver LNG within a given port would depend on the size and location of the port, as well as the types of vessels expected to bunker LNG. Truck to ship bunkering is best suited for supporting smaller and mid-sized vessels, such as ferries or offshore supply vessels (OSVs) that support offshore oil platforms. Liquefaction facilities built on site can provide the greatest capacity of any LNG bunkering option, for example, to provide fuel for large vessels in transoceanic trade. However, constructing small-scale liquefaction facilities to produce and deliver LNG on site requires considerable planning and significant capital investment, in one case on the order of $70 million for a mid-sized port. Each LNG bunkering option in Figure 3 may be a viable means to begin LNG bunkering service in a given port. However, ports may face practical constraints as bunkering increases in scale. For example, a container port of significant size typically has multiple terminals, so even with an on-site liquefaction facility, it may need additional infrastructure or supply vessels for moving LNG to other port locations where a cargo ship might be berthed. There may also be port capacity and timing constraints upon the movement of LNG bunkering barges trying to refuel multiple large vessels in various locations around a crowded port. To date, the LNG bunkering operations already in place or in development are comparatively small, but scale constraints could become a factor as LNG bunkering grows and might require additional bunkering-related port investments. Early adoption of LNG bunkering occurred in Europe, where the first sulfur ECAs were created in 2006 and 2007. Through Directive 2014/94/EU, the European Union requires that a core network of marine ports be able to provide LNG bunkering by December 2025 and that a core network of inland ports provide LNG bunkering by 2030. This mandate has been promoted, in part, with European Commission funds to support LNG bunkering infrastructure development. In addition, the European Maritime Safety Agency published regulatory guidance for LNG bunkering in 2018. Over 40 European coastal ports have LNG bunkering capability currently in operation—primarily at locations on the North Sea and the Baltic Sea, and in Spain, France, and Turkey. These locations include major port cities such as Rotterdam, Barcelona, Marseilles, and London. Another 50 LNG bunkering facilities at European ports are in development. LNG bunkering is also advancing in Asia, led by Singapore, the world's largest bunkering port. Singapore has agreed to provide $4.5 million to subsidize the construction of two LNG bunkering vessels. The Port of Singapore plans to source imported LNG at the adjacent Jurong Island LNG terminal, loading it into the bunkering vessels for ship-to-ship fueling of vessels in port. Singapore also has signed a memorandum of understanding with 10 other partners—including a Japanese Ministry and the Chinese Port of Ningbo-Zhoushan—to create a focus group aimed at promoting the adoption of LNG bunkering at ports around the world. In Japan, one consortium is implementing plans to begin vessel-to-vessel LNG bunkering at the Port of Keihin in Tokyo Bay by 2020. Japan's NYK line, a large ship owner, recently announced that it had reached an agreement with three Japanese utilities to add LNG bunkering to ports in Western Japan. Asian countries, together with Australia and the United Arab Emirates, currently have around 10 coastal ports offering LNG bunkering, with another 15 projects in development. Some LNG bunkering operations in Europe and Asia are associated with existing LNG marine terminals, which already have LNG storage and port infrastructure in place. However, many smaller operations—including most of the projects in development—employ trucking, dedicated bunkering vessels, on-site liquefaction, and other means to extend LNG availability beyond the ports with major LNG terminals. LNG bunkering is not so advanced in South America, although with nine operating LNG marine terminals (one for export), and another six in development, South America also could support significant LNG bunkering operations in the near future. LNG bunkering in the United States currently takes place in two locations—Jacksonville, FL, and Port Fourchon, LA—with a third bunkering facility under development in Tacoma, WA. The LNG facilities in these ports serve the relatively small U.S.-flag domestic market. Bunkering of LNG-fueled cruise ships also is planned for Port Canaveral, FL. However, ports in North America have significant potential to expand the nation's LNG bunkering capability. Jacksonville is the largest LNG bunkering operation at a U.S. port. One bunkering facility at the port, developed by JAX LNG, initially began truck-to-ship refueling operations in 2016 for two LNG-capable container ships. (The LNG is sourced from a liquefaction plant in Macon, GA. ) In August 2018, upon delivery of the Clean Jacksonville bunker barge, the facility began to replace truck-to-ship bunkering with ship-to-ship bunkering. In the future, the barge plans to source LNG from a new, small-scale liquefaction plant which JAX LNG is currently constructing at the port. A second facility at Jacksonville's port, operated by Eagle LNG, provides LNG bunkering sourced from a liquefaction plant in West Jacksonville. Eagle LNG also is constructing an on-site liquefaction and vessel bunkering facility in another part of the port, expected to begin service in 2019. Taken together, the JAX LNG and Eagle LNG facilities is expected to establish Jacksonville as a significant LNG-bunkering location with the capability to serve not only the domestic fleet but larger international vessels as well. In 2015, Harvey Gulf International Marine (Harvey) began LNG bunkering operations in the Gulf of Mexico to fuel its small fleet of LNG-powered offshore supply vessels serving offshore oil rigs. Harvey has since constructed a $25 million facility at its existing terminal in Port Fourchon to store and bunker LNG sourced from liquefaction plants in Alabama and Texas. The facility can provide truck-to-ship bunkering services for LNG-fueled offshore supply vessels, tank barges, and other vessels. A Harvey subsidiary has ordered two LNG bunkering barges to enable ship-to-ship fueling in the future. Puget Sound Energy has proposed an LNG liquefaction and bunkering facility at the Port of Tacoma, WA. Vessels traveling between Washington and Alaska typically spend the entire journey within the 200-mile North America ECA. Consequently, vessel owners operating along these routes have been interested in LNG as bunker fuel. TOTE Maritime, for example, a ship owner involved in trade between Alaska and the lower 48 states, has begun the process of retrofitting the engines of two of its container ships to be LNG-compatible. The proposed Tacoma LNG facility would be capable of producing up to 500,000 gallons of LNG per day and would include an 8 million gallon storage tank. The facility would serve the dual purposes of providing fuel for LNG-powered vessels and providing peak-period natural gas supplies for the local gas utility system. Its total construction cost reportedly is expected to be $310 million. Community and environmental concerns have slowed the progress of the proposal, which is still under regulatory review. Puget Sound Energy originally planned to put the LNG facility into service in late 2019; however, permitting issues appear likely to delay its opening until 2020 or later—if it is eventually approved. Q-LNG Transport, a company 30% owned by Harvey, has placed orders for two LNG bunkering barges to provide ship-to-ship LNG fueling as well as "ship-to-shore transfers to small scale marine distribution infrastructure in the U.S. Gulf of Mexico and abroad." Q-LNG's first barge initially is expected to provide fuel to new LNG-fueled cruise ships based in Port Canaveral (and, potentially, Miami), while service from its second barge is still uncommitted. Initial plans are for the LNG to be sourced from the Elba Island LNG import/export terminal near Savannah, GA—approximately 230 nautical miles away—although the company may seek to develop an on-site LNG storage facility in the future. As noted above, U.S. LNG bunkering activities thus far have been limited to a handful of vessels in domestic trade and tourism. LNG bunkering for the much larger fleet of foreign-flag ships carrying U.S. imports and exports is still to be developed. As in Europe and Asia, domestic ports located near major LNG import or export terminals may serve as anchors for expanded LNG bunkering operations. Figure 4 shows existing LNG import and export terminals in North America. LNG can be liquefied from pipeline natural gas (or imported natural gas) and stored in large quantities at these facilities. The LNG can then be bunkered on site or transported to bunkering facilities elsewhere in the region by truck, rail, or barge. As discussed above, the distance between Port Canaveral and Elba Island in Q-LNG's bunker sourcing plan is 230 nautical miles. Taking this distance as a measure of how far away LNG can be sourced and barged economically, it is possible to extrapolate which U.S. ports are within reach of a potential supply of LNG for vessel bunkering. Table 1 lists the top 20 U.S. container shipment ports in the United States and their proximity to existing LNG import/export terminals. Of these top 20 ports, 12 are less than 230 nautical miles from an operating LNG terminal. Distances between LNG terminals and the other East Coast ports are not much greater, suggesting that LNG for vessel bunkering could be within reach of every U.S. port along the Eastern Seaboard and in the Gulf of Mexico. On the West Coast, the ports of Los Angeles and Long Beach—the two largest U.S. ports—are relatively close to the Costa Azul LNG import terminal in Ensenada, MX. Seattle and Tacoma are far from Ensenada, but would be served by the proposed Tacoma LNG bunkering project, if constructed. LNG bunkering for Seattle and Tacoma alternatively could be sourced from an existing LNG port facility around 100 nautical miles north in Vancouver, BC, which is expanding to provide LNG bunkering services to international carriers. Alaska's existing LNG export terminal currently is inactive, but potentially could supply LNG bunker fuel in the Pacific Northwest as well. Although existing LNG import or export terminals in North America could supply LNG for regional bunkering operations, such activities would require additional investment for infrastructure such as LNG transfer facilities and bunker barges. CRS is not aware of any public announcements among the LNG terminals above to develop bunkering operations. However, at least one LNG terminal owner, Cheniere Energy, which operates LNG terminals in Louisiana and Texas, identifies vessel bunkering as one source of future LNG demand growth worldwide. The IMO adopted safety standards for ships using natural gas as a bunker fuel in 2015. The standards, which took effect in 2017, apply to all new ships and conversions of ships (except LNG tankers, which have their own standards). The IMO standards address engine design, LNG storage tanks, distribution systems, and electrical systems. They also establish new training requirements for crews handling LNG and other low flashpoint fuels. As is the case for the sulfur standards, the IMO LNG safety standards apply to all IMO member nations, including the United States. In addition, a number of U.S. federal agencies, especially the Coast Guard and the Federal Energy Regulatory Commission, have jurisdiction over specific aspects of domestic LNG storage infrastructure and bunkering operations. The Coast Guard has the most prominent role in LNG bunkering, given its general authority over port operations and waterborne shipping. In 2015, the Coast Guard issued two guidelines for the handling of LNG fuel and for waterfront facilities conducting bunkering operations. In 2017, the Coast Guard issued additional guidelines to Captains of the Port, the local Coast Guard officials responsible for port areas, for conducting safe LNG bunkering simultaneously with other port operations. The guidelines advise on quantitative risk assessment of facilities bunkering LNG, which allows Captains of the Port to assess the risks posed to crews and facilities. The Federal Energy Regulatory Commission (FERC) plays a role in LNG bunkering due to its jurisdiction over the siting of LNG import and export terminals under the Natural Gas Act of 1938. Specifically, FERC asserts approval authority over the place of entry and exit, siting, construction, and operation of new LNG terminals as well as modifications or extensions of existing LNG terminals. Notwithstanding this siting authority, FERC reportedly does not intend to assert jurisdiction over the permitting of LNG bunkering facilities, but it may require amendment of permits it has issued for LNG import or export terminals to account for bunkering operations added afterwards. In addition to the Coast Guard and FERC, other federal agencies may have jurisdiction over specific aspects of LNG bunkering operations in U.S. ports under a range of statutory authorities. For example, the Pipeline and Hazardous Materials Safety Administration within the Department of Transportation regulates the safety of natural gas pipelines and certain associated LNG storage facilities (e.g., peak-shaving plants). LNG facilities also may need to comply with the Occupational Safety and Health Administration's regulations for Process Safety Management of Highly Hazardous Chemicals. Other federal agencies, including the Environmental Protection Agency, the U.S. Army Corps of Engineers, and the Transportation Security Administration, may regulate other aspects of LNG bunkering projects. CRS is not aware of new regulations to date among these agencies specifically addressing LNG bunkering. World production of LNG has been rising rapidly over the last few years, driven by growth in the natural gas sector in new regions—especially Australia and the United States. According to one industry analysis ( Figure 5 ), global LNG supply is expected to increase from 300 to 400 million metric tons per annum (MMtpa) from 2017 to 2021 based on new LNG liquefaction projects already operating or under development. An additional 150 MMtpa appears likely to come online after that. Collectively, LNG supply from these new liquefaction projects could exceed projections of demand, which would put downward pressure on LNG prices. While increases in the global supply of LNG do not necessarily translate directly into an increase in LNG available for bunkering, such increases could provide options for LNG bunkering in more ports. Estimating potential demand for LNG in the maritime sector is complicated and uncertain. One study of future LNG demand for bunkering, specifically, projects that LNG-powered vessels in operation and under construction as of June 2018 will require between 1.2 and 3.0 MMt of LNG per year. The study's review of several LNG consumption forecasts in the maritime sector shows a consensus projection between 20 to 30 MMt per year by 2030. This level of demand growth implies an increase in LNG-powered vessel construction from the current rate of around 120 ships per year to between 400 and 600 new builds per year. If these levels were reached, they could create a significant new market for LNG suppliers. Assuming a Henry Hub spot market price of $4/MMBtu in 2030, the annual market for LNG in shipping could be worth $2.9 billion to $5.8 billion, before accounting for liquefaction and transportation charges. Some studies have projected the LNG bunkering market to be even larger and to grow more quickly. However, key variables—such as the prices of Henry Hub natural gas and crude oil, the number of new vessel orders, and the future costs of emissions technology—are notoriously hard to predict with accuracy. Thus, it is not assured that natural gas consumption in the maritime sector will absorb more than a small amount of the global liquefaction capacity in development. The IMO sulfur standards apply to ship owners globally, as does the development of new LNG supply and bunkering infrastructure. In addition to these factors, domestic LNG bunkering also may be influenced by considerations more specific to the United States. These considerations include growth of the U.S. natural gas supply, domestic shipbuilding opportunities, and LNG safety and security. Because of its leading role in global natural gas production, the United States has a particular interest in any new source of natural gas demand. According to the Energy Information Administration, the United States has been the world's top producer of natural gas since 2009, when it surpassed Russia. In 2017, increases in production outstripped increases in domestic gas consumption, leading to the United States becoming a net exporter of natural gas for the first time in nearly 60 years. As discussed above, North America (primarily the United States) is expected to add the most new LNG production capacity through 2030 when including projects that are operating, under construction, and likely (according to investment analysts). Past increases in U.S. LNG exports were driven by greater throughput at the Sabine Pass LNG export terminal—the only operating U.S. LNG export terminal in 2017. In March 2018, the Cove Point terminal in Maryland became the second operating U.S. LNG export terminal. Four additional projects under construction or commissioning are set to nearly triple U.S. liquefaction by the end of 2019. This increase in liquefaction capacity likely will motivate LNG producers to secure new buyers. Figure 6 shows estimated LNG prices for various locations around the world as of October 2018. As the figure shows, LNG prices are substantially lower in North America than in Asia, Europe, and South America. Even after adding $1.00 to $2.00/MMBtu to transport the LNG to overseas ports, LNG produced in the United States is globally competitive at these prices. If LNG from the new liquefaction capacity coming online can be produced and delivered with similar economics, the cost advantage may create an opportunity for U.S. LNG in bunker supply. There are over 400 petroleum fuel bunkering ports in the world, but 60% of bunkering in recent years has happened in six countries: Singapore, the United States, China, the United Arab Emirates, South Korea, and the Netherlands. Of these countries, only the United States is a significant LNG producer. Therefore, the United States could be a favorable source of LNG for domestic bunkering and for bunkering at the other major ports. While the LNG industry historically has had a good safety record, there are unique safety risks associated with LNG in vessel operations. Leakage of LNG during LNG shipping or bunkering can pose several hazards. LNG is stored at temperatures below -162 °C (-260 °F), far below the -20°C at which the carbon steels typically used in shipbuilding become brittle. Consequently, extreme care must be taken to ensure that LNG does not drip or spill onto ship hulls or decking because it could lead to brittle fracture, seriously damaging a ship or bunkering barge. LNG spilled onto water can pose a more serious hazard as it will rapidly and continuously vaporize into natural gas, which could ignite. The resulting "pool fire" would spread as the LNG spill expands away from its source and continues evaporating. A pool fire is intense, far hotter and burning far more rapidly than oil or gasoline fires, and it cannot be extinguished; all the LNG must be consumed before it goes out. Because an LNG pool fire is so hot, its thermal radiation may injure people and damage vessels or property a considerable distance from the fire itself. Many experts agree that a large pool fire, especially on water, is the most serious LNG hazard. Leaks of boil-off gas (the small amount of LNG that vaporizes in storage) can also release natural gas into a port area and cause fires or explosions. Major releases of LNG from large LNG carriers would be most dangerous within 500 meters of the spill and would pose some risk at distances up to 1,600 meters from the spill. While a bunkering barge or a vessel using LNG for fuel contains far less LNG than large LNG carriers, LNG spills in bunkering operations could still be a significant concern. Risks associated with bunkering LNG are complicated in ports seeking to engage in "simultaneous operations" during the bunkering process. Simultaneous operations entail loading and unloading cargo and personnel from a ship, maintenance, and other logistical operations performed while a ship is bunkering. Accidents that occur during such operations (for example, the operation of heavy machinery near pipes transporting LNG) can result in a spill of LNG which can threaten workers positioned near the site of operations. LNG tankers, bunkering vessels, and land-based facilities could be vulnerable to terrorism. Bunkering tanks or vessels might be physically attacked to destroy the LNG they hold—and vessels might be commandeered for use as weapons against port or coastal targets. Potential terrorist attacks on LNG terminals or tankers in the United States have long been a key concern of the public and policymakers in the context of large scale LNG imports or exports because such attacks could cause catastrophic fires in ports and nearby populated areas. For example, a 2007 report by the Government Accountability Office stated that, "the ship-based supply chain for energy commodities," specifically including LNG, "remains threatened and vulnerable, and appropriate security throughout the chain is essential to ensure safe and efficient delivery." Affected communities and federal officials continue to express concern about the security risks of LNG. The potential risks from terrorism to LNG bunkering infrastructure may be different than those of larger LNG import or export operations due to smaller quantities of LNG involved, but the risks may become more widespread if LNG bunkering operations are established in more locations. The Maritime Transportation Security Act (MTSA, P.L. 107-295 ) and the International Ship and Port Facility Security Code give the Coast Guard far-ranging authority over the security of hazardous materials in maritime shipping. The Coast Guard has developed port security plans addressing how to deploy federal, state, and local resources to prevent terrorist attacks. Under the MTSA, the Coast Guard has assessed the overall vulnerability of marine vessels, their potential to transport terrorists or terror materials, and their use as potential weapons. The Coast Guard has employed these assessments to augment port security as necessary and to develop maritime security standards for LNG port facilities. The IMO's overall framework for controlling vessels emissions (MARPOL Annex VI) has been in place since 2005. While the United States, as an IMO member, is subject to the IMO's 2020 sulfur standards, the international standards apply equally to all parties and all vessels. The impacts of sulfur standards on bunker fuel have been an important consideration, but IMO member nations have agreed to the standards independent of any particular energy policies. Moreover, MARPOL Annex VI preceded the U.S. shale gas boom, so commitment to that initial IMO framework could not have anticipated United States' current role as a dominant energy producer. Any changes within the international shipping fleet to install sulfur scrubbers, fuel engines with LNG, or switch to other low sulfur fuels, are being driven primarily by market forces in fuel supply, shipbuilding, and shipping—not by any particular push to favor one fuel over another. Nonetheless, given its particular status, the question arises whether the standards may create an economic opportunity for the United States, in energy or otherwise. More specifically, could international adoption of LNG as a bunker fuel create an important new market for U.S. natural gas producers, shipbuilders, or infrastructure developers? As discussed above, depending upon the adoption of LNG bunkering in the global fleet, the LNG bunker fuel market could grow to several billion dollars by 2030. If U.S. LNG producers were to supply a significant share of this market—on the strength of comparatively low LNG production costs—LNG bunkering could increase demand for U.S. natural gas production, transportation, and liquefaction. Opportunities in LNG-related shipbuilding might be more limited, as most of this occurs overseas, with the exception of Jones Act vessels. In the latter case, demand for domestically-constructed LNG bunkering barges could be one significant area of economic growth. Engineering and construction firms could benefit from new opportunities to develop new port infrastructure for LNG storage and transfer. While likely limited in number, such port facilities could be complex, high value projects costing tens or hundreds of millions of dollars to complete. Such projects could create jobs in engineering, construction, and operation, which could be important to local communities. Although LNG bunkering could present the United States with new economic opportunities, it may pose challenges as well. Rising demand for LNG in the maritime sector could increase natural gas prices for domestic consumers. In addition to being the world's largest natural gas producer, as of 2018, the United States is also the world's largest producer of crude oil and the second largest bunkering hub. Consequently, while vessel conversion to LNG bunkering may increase demand for U.S.-produced natural gas, it could be partially offset by reduced demand for U.S.-produced crude oil or refined products. Exactly how changing demand in one sector could affect the other is unclear. Furthermore, while LNG can reduce pollutant emissions from vessels, emissions and environmental impacts from increased natural gas production and transportation could increase overall emissions. Much of the net environmental impact depends upon practices in the natural gas industry, which are the subject of ongoing study and debate. Although new LNG bunkering infrastructure can create jobs, as the Tacoma LNG projects shows, the construction of such port facilities can be controversial for reasons of safety, security, and environmental impact. Overarching the considerations above is uncertainty about how the global shipping fleet will adapt to the IMO sulfur standards over time. This uncertainty complicates decisions related to both private investment and public policy. LNG-fueled ships still account for only a fraction of the U.S. and global fleets, and it may take several decades for significant benefits of LNG-powered vessels to be realized. It is also possible that alternative ship fuels, including biofuels, electric engines, and hybrid engines, will become more economically viable in coming years. Given the uncertainty surrounding the future of LNG as a ship fuel, it is hard to predict the potential benefits or costs that LNG bunkering may provide to the United States. Until now, the private sector has added LNG-fueled vessels to fleets in the United States in a piecemeal manner under existing federal statutes and regulation. Congress could encourage the growth of LNG bunkering by various means, such as providing tax incentives to support the construction of LNG bunkering facilities and vessels, addressing any statutory or regulatory barriers to bunkering facility siting or operations, and providing funding for technical support to domestic carriers seeking to adopt LNG technology. Alternatively, Congress could seek to encourage competing bunker fuel options, such as biofuels, by incentivizing them in similar ways. In addition, Congress could also affect growth in LNG bunkering through policies affecting the LNG industry or domestic shipping industry as a whole. Changes in federal regulation related to natural gas production, or changes to the Jones Act, for example, while not directed at LNG bunkering, could nonetheless affect its economics. Therefore, evaluating the potential implications on LNG bunkering of broader energy, environmental, or economic objectives may become an additional consideration in congressional oversight and legislative initiatives. If LNG bunkering expands significantly in U.S. ports, Congress also may examine the adequacy of existing measures to ensure the safety and security of LNG vessels, storage, and related facilities.
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The combination of growing liquefied natural gas (LNG) supplies and new requirements for less polluting fuels in the maritime shipping industry has heightened interest in LNG as a maritime fuel. The use of LNG as an engine ("bunker") fuel in shipping is also drawing attention from federal agencies and is beginning to emerge as an issue of interest in Congress. In 2008, the International Maritime Organization (IMO) announced a timeline to reduce the maximum sulfur content in vessel fuels to 0.5% by January 1, 2020. Annex VI of the International Convention for the Prevention of Pollution from Ships requires vessels to either use fuels containing less than 0.5% sulfur or install exhaust-cleaning systems ("scrubbers") to limit a vessel's airborne emissions of sulfur oxides to an equivalent level. An option for vessel operators to meet the IMO 2020 standards is to install LNG-fueled engines, which emit only trace amounts of sulfur. Adopting LNG engines requires more investment than installing scrubbers, but LNG-fueled engines may offset their capital costs with operating cost advantages over conventional fuels. Savings would depend on the price spread between LNG and fuel oil. Recent trends suggest that LNG may be cheaper in the long run than conventional fuels. LNG bunkering requires specialized infrastructure for supply, storage, and delivery to vessels. To date, the number of ports worldwide that have developed such infrastructure is limited, although growth in this area has accelerated. Early adoption of LNG bunkering is occurring in Europe where the European Union requires a core network of ports to provide LNG bunkering by 2030. LNG bunkering is also advancing in Asia, led by Singapore, the world's largest bunkering port. Asian countries, together with Australia and the United Arab Emirates, have about 10 coastal ports offering LNG bunkering, with another 15 projects in development. LNG bunkering in the United States currently takes place in Jacksonville, FL, and Port Fourchon, LA—with a third facility under development in Tacoma, WA. Bunkering of LNG-fueled cruise ships using barges also is planned for Port Canaveral, FL. The relative locations of other U.S. ports and operating LNG terminals suggest that LNG bunkering could be within reach of every port along the Eastern Seaboard and in the Gulf of Mexico. On the West Coast, the ports of Los Angeles and Long Beach, CA, are near the Costa Azul LNG terminal in Ensenada, MX. Seattle and Tacoma are adjacent to the proposed Tacoma LNG project. Since 2015, Jones Act coastal ship operators have taken steps to transition their fleets to use cleaner burning fuels, including LNG. Shippers of dry goods to Alaska, Hawaii, and Puerto Rico have taken delivery or have ordered LNG-fueled and LNG-capable vessels from U.S. shipyards in Philadelphia, PA, and Brownsville, TX. Another company operates five LNG-powered offshore supply vessels built in Gulfport, MS. Depending upon LNG conversions, the global LNG bunker fuel market could grow to several billion dollars by 2030. If U.S. LNG producers were to supply a significant share of this market—on the strength of comparatively low LNG production costs—LNG bunkering could increase demand for U.S. natural gas production, transportation, and liquefaction. Opportunities in LNG-related shipbuilding might be more limited, as most shipbuilding occurs overseas, although domestically-constructed LNG bunkering barges could be one area of economic growth. Finally, engineering and construction firms could benefit from new opportunities to develop port infrastructure for LNG storage and transfer. However, while vessel conversion to LNG fuel may increase demand for U.S.-produced natural gas, it partially could be offset by reduced demand for U.S.-produced crude oil or refined products. Furthermore, while LNG can reduce direct emissions from vessels, fugitive emissions and environmental impacts from natural gas production and transportation could reduce overall emissions benefits. While the LNG industry has experienced few accidents, the Coast Guard has been developing new standards to address unique safety and security risks associated with LNG in vessel operations. The overarching consideration about LNG bunkering in the United States is uncertainty about how the global shipping fleet will adapt to the IMO sulfur standards over time. This uncertainty complicates decisions related to both private investment and public policy. Although Congress has limited ability to influence global shipping, it could influence the growth of LNG bunkering through the tax code and regulation, or through policies affecting the LNG industry or domestic shipping industry as a whole. Evaluating the potential implications of LNG bunkering within the context of broader energy and environmental policies may become an additional consideration for Congress. If LNG bunkering expands significantly, Congress also may examine the adequacy of existing measures to ensure the safety and security of LNG vessels, storage, and related facilities.
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The Constitution grants Congress the power to borrow money on the credit of the United States—one part of its power of the purs e—and thus mandates that Congress exercise control over federal debt. Control of debt policy provides Congress with one means of expressing views on appropriate fiscal policies. Before 1917 Congress typically controlled individual issues of debt. In September 1917, while raising funds for the United States' entry into World War I, Congress also imposed an aggregate limit on federal debt in addition to individual issuance limits. Over time, Congress granted Treasury Secretaries more leeway in debt management. In 1939, Congress agreed to impose an aggregate limit that gave the U.S. Treasury authority to manage the structure of federal debt. The statutory debt limit applies to almost all federal debt. The limit applies to federal debt held by the public (that is, debt held outside the federal government itself) and to federal debt held by the government's own accounts. Federal trust funds, such as Social Security, Medicare, Transportation, and Civil Service Retirement accounts, hold most of this internally held debt. For most federal trust funds, net inflows by law must be invested in special federal government securities. When holdings of those trust funds increase, federal debt subject to limit will therefore increase as well. The government's on-budget fiscal balance, which excludes the net surplus or deficit of the U.S. Postal Service and the Social Security program, does not directly affect debt held in government accounts. The change in debt held by the public is mostly determined by the government's surpluses or deficits. The net expansion of the federal government's balance sheet through loan programs also increases the government's borrowing requirements. Under federal budgetary rules, however, only the net subsidy cost of those loans is included in the calculation of deficits. The most recent suspension of the debt limit lapsed after March 1, 2019. The limit was then reset at $21.988 trillion, a level that accommodates federal obligations incurred during the suspension period. On March 4, 2019, the first business day after the debt limit suspension had lapsed, U.S. Treasury Secretary Steven Mnuchin invoked extraordinary authorities. Those extraordinary measures (described below in more detail), along with cash balances and incoming revenues, can be used to meet federal obligations in coming months. In anticipation of the lapse of the debt limit suspension, the U.S. Treasury had announced it would stop issuing state and local government securities (SLGs) on March 1, 2019. SLGs are used by state and local governments as one way of complying with IRS anti-arbitrage rules. Issuance of SLGs is expected to resume once the current debt limit episode is resolved. CBO estimates that Treasury could meet federal obligations until just before or just after October 1, 2019. One estimate suggested those resources would suffice to cover federal payments until August, if not later. Another estimate of an informed Treasury market observer suggests federal payments could be made until "just before Labor Day," albeit while noting substantial uncertainties. The current size of federal deficits, which are now higher than those in previous years, or economic uncertainty could affect that timing. Changes in the federal tax system and Internal Revenue Service (IRS) operations could also add uncertainties to projections of Treasury cash flows. In late 2017 and early 2018 the debt limit issue was tied to consideration of funding measures for FY2018. On September 8, 2017, enactment of a continuing resolution (Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-56 ) suspended the debt limit through December 8, 2018. Once that suspension lapsed, extraordinary measures were used to meet federal obligations. The Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ), enacted on February 9, 2018, included a provision (Section 30301) that suspended the debt limit through March 1, 2019. A section near the end of this report summarizes recent debt limit activity in more detail. In January 2019, the House adopted Rule XXVIII that when the House approves a budget resolution, a measure to suspend the debt limit for the remainder of the fiscal year would be automatically engrossed and transmitted to the Senate. In recent years, Congress has chosen to suspend the debt limit for a set amount of time instead of raising the debt limit by a fixed dollar amount. When a suspension ends, the debt limit is reestablished at a level that accommodates federal spending during the suspension period. The U.S. Treasury is thus left with minimal headroom under the debt limit after a suspension ends, leaving only a cash balance similar to that when the suspension began. Therefore, the Treasury Secretary typically invokes a set of extraordinary measures, which are described below. Congress has authorized the Treasury Secretary to invoke a "debt issuance suspension period," which triggers the availability of extraordinary measures, which are special strategies to handle cash and debt management. Actions taken in the past include suspending sales of nonmarketable debt, postponing or downsizing marketable debt auctions, and withholding receipts that would be transferred to certain government trust funds. In particular, extraordinary strategies include suspending investments in Civil Service Retirement and Disability Fund (CSRDF) and the G-Fund of the Federal Employees' Retirement System (FERS), as well as redeeming a limited amount of CSRDF securities. The Treasury Secretary is also mandated to make those funds whole after the resolution of a debt limit episode. The amount of time that extraordinary measures allow the U.S. Treasury to extend its borrowing capacity depends on the pace of deficit spending, the timing of cash receipts and outlays, and other technical factors. Tax deadlines and processing dates for some federal disbursements are scheduled, but amounts of collections and outlays depend on decisions and actions of private entities and other federal agencies, which are more difficult to predict. The effects of recent tax changes ( P.L. 115-97 ) and the possibility that further changes could occur in the 116 th Congress could also affect revenue projections. Treasury cash flow projections are therefore subject to uncertainty, which complicates attempts to estimate how long extraordinary measures would enable the federal government to meet its financial obligations. Estimates calculated by others of when Treasury would reach the debt limit and how long extraordinary measures would extend federal borrowing capacity have typically been close to Treasury's estimates. The U.S. Treasury Inspector General reported in 2012 that "the margin of error in these estimates at a 98 percent confidence level is plus or minus $18 billion for one week into the future and plus or minus $30 billion for two weeks into the future." An impending debt ceiling constraint presents more than one deadline. A first deadline is the exhaustion of borrowing capacity. The U.S. Treasury, however, could continue to meet obligations using available cash balances. As cash balances run down, however, other complications could emerge and Treasury's cash resources could fall below levels deemed prudent by outside advisors well before extraordinary measures were exhausted. Low cash balances could complicate federal debt management and Treasury auctions. The Government Accountability Office (GAO) has also noted that debt limit episodes generate severe strains for Treasury staff, especially when its room for maneuver is severely restricted. Finally, if the U.S. Treasury were to run out of cash, the Treasury Secretary would face difficult choices in how to comply simultaneously with the debt limit and the mandate to pay federal obligations in a timely fashion. Severe financial dislocation could result if the U.S. Treasury were unable to make timely payments. For example, repo lending arrangements, which rely heavily on Treasury securities for collateral, could become more expensive or could be disrupted. "Repo" is short for repurchase agreement, which provides a common means of secured lending among financial institutions. Repo lending rates rose sharply in early August 2011 during the 2011 debt limit episode, but fell to previous levels once that episode was resolved. The Federal Reserve Open Market Committee indicated in an October 16, 2013, discussion that "in the event of delayed payments on Treasury securities," discount window and other operations would proceed "under the usual terms." That statement has been taken to imply that the Federal Reserve would be "prepared to backstop the Treasury market in the event of a political deadlock." In addition, the Federal Reserve Bank of New York issued a description of contingency plans in December 2013 in the event of Treasury payment delays, but warned that such measures "only modestly reduce, not eliminate, the operational difficulties posed by a delayed payment on Treasury debt. Indeed, even with these limited contingency practices, a temporary delayed payment on Treasury debt could cause significant damage to, and undermine confidence in, the markets for Treasury securities and other assets." Table 1 presents debt limit changes over the past two decades. The debt limit was modified six times from 1993 through 1997. Two of those modifications were enacted to prevent the debt limit restriction from delaying payment of Social Security benefits in March 1996 before a broader increase in the debt was passed at the end of that month. After 1997, debt limit increases were unnecessary due to the appearance of federal surpluses that ran from FY1998 through FY2001. Since FY2002 the federal government has run persistent deficits, which have been ascribed to major tax cuts enacted in 2001 and 2003 and higher spending. Those deficits required a series of increases in the debt limit. Starting with passage of the BCA in August 2011, Congress has employed measures that have led to debt limit increases that occur some time after a law is enacted. Dates in the first column of Table 1 in general refer to dates of enactment, which do not match dates when debt limit increases have occurred. For instance, the debt limit was suspended when P.L. 113-83 was enacted on February 12, 2014, and was reestablished on March 16, 2015, when that suspension lapsed. One result of suspending the debt limit, as has been the practice in recent years, is that no fixed number appears in legislation and that a new debt limit level is set only when the suspension lapses. The 2011 debt limit episode attracted far more attention than other recent debt limit episodes. In mid-2011 several credit ratings agencies and investment banks expressed concerns about the consequences to the financial system and the economy if the U.S. Treasury were unable to fund federal obligations. Many economists and financial institutions stated that if the market associated Treasury securities with default risks, the effects on global capital markets could be significant. Debate during the 2011 debt limit episode reflected a growing concern with the fiscal sustainability of the federal government. While projections issued in 2011 indicated that federal deficits would shrink over the next half decade, deficits later in the decade were expected to rise. Without major changes in federal policies, the amount of federal debt would increase substantially. CBO has repeatedly warned that the current trajectory of federal borrowing is unsustainable and could lead to slower economic growth in the long run as debt rises as a percentage of GDP. Unless federal policies change, Congress would repeatedly face demands to raise the debt limit to accommodate the growing federal debt in order to provide the government with the means to meet its financial obligations. The next section provides a brief chronology of events from the 2011 debt limit episode. On May 16, 2011, U.S. Treasury Secretary Timothy Geithner announced that the federal debt had reached its statutory limit and declared a debt issuance suspension period, which would allow certain extraordinary measures to extend Treasury's borrowing capacity until about August 2, 2011. Had the U.S. Treasury exhausted its borrowing authority, it could have used cash balances to meet obligations for some period of time. Over the course of the 2011 debt limit episode Treasury estimates of when the debt limit would begin to bind and how long extraordinary measures would suffice to meet federal obligations shifted. For instance, in April 2011 the U.S. Treasury had projected that its borrowing capacity, even using extraordinary measures, would be exhausted by about July 8, 2011. The Treasury Secretary, in a letter to Congress dated May 2, 2011, had indicated that he would declare a debt issuance suspension period on May 16, unless Congress acted beforehand, which would allow certain extraordinary measures to extend Treasury's borrowing capacity until early August 2011. On July 1, 2011, the U.S. Treasury confirmed its view that its borrowing authority would be exhausted on August 2, the date cited in Treasury Secretary Geithner's May 16, 2011, letter that invoked the debt issuance suspension period. A bill ( H.R. 1954 ) to raise the debt limit to $16,700 billion was introduced on May 24 and was defeated in a May 31, 2011, House vote of 97 to 318. The House passed the Cut, Cap, and Balance Act of 2011 ( H.R. 2560 ; 234-190 vote) on July 19, 2011. The measure would have increased the statutory limit on federal debt from $14,294 billion to $16,700 billion once a proposal for a constitutional amendment requiring a balanced federal budget was transmitted to the states. On July 22, the Senate tabled the bill on a 51-46 vote. Some commentators in early 2011 suggested that cutting federal spending could slow the growth in federal debt enough to avoid an increase in the debt limit. The scale of required spending reductions, as of the middle of FY2011, would have been large. For example, at the start of the third quarter of FY2011 on April 1, 2011, federal debt was within $95 billion of its limit. According to CBO baseline estimates issued at the time, the expected deficit for the remainder of FY2011 would be about $570 billion. Reaching the end of FY2011 on September 30, 2011, without an increase in the debt limit or the use of extraordinary measures would have thus required a spending reduction of at least $570 billion, or about 85% of discretionary spending for the rest of that fiscal year. Some have suggested that the Fourteenth Amendment (Section 4), which states that "(t)he validity of the public debt of the United States ... shall not be questioned," could provide the President with authority to ignore the statutory debt limit. President Obama rejected such claims, as did most legal analysts. On July 25, 2011, the Budget Control Act of 2011 was introduced in different forms by both House Speaker Boehner (House Substitute Amendment to S. 627 ) and Majority Leader Reid ( S.Amdt. 581 to S. 1323 ). Subsequently, on August 2, 2011, President Obama signed into law a substantially revised compromise measure (Budget Control Act, BCA; P.L. 112-25 ), following House approval by a vote of 269-161 on August 1, 2011, and Senate approval by a vote of 74-26 on August 2, 2011. This measure included numerous provisions aimed at deficit reduction, and would allow a series of increases in the debt limit of up to $2,400 billion ($2.4 trillion) subject to certain conditions. These provisions eliminated the need for further increases in the debt limit until early 2013. In particular, the BCA included major provisions that imposed discretionary spending caps, enforced by automatic spending reductions, referred to as a "sequester"; established a Joint Select Committee on Deficit Reduction, whose recommendations would be eligible for expedited consideration; required a vote on a joint resolution on a proposed constitutional amendment to mandate a balanced federal budget; and instituted a mechanism allowing for the President and Treasury Secretary to raise the debt ceiling, subject to congressional disapproval. The legislation provides a three-step procedure by which the debt limit can be increased. First, the debt limit was raised by $400 billion, to $14,694 billion on August 2, 2011, following a certification of the President that the debt was within $100 billion of its legal limit. A second increase of $500 billion occurred on September 22, 2011, which was also triggered by the President's certification of August 2. The second increase, scheduled for 50 days after that certification, was subject to a joint resolution of disapproval. Because such a resolution could be vetoed, blocking a debt limit increase would be challenging. The Senate rejected a disapproval measure ( S.J.Res. 25 ) on September 8, 2011, on a 45-52 vote. The House passed a disapproval measure ( H.J.Res. 77 ) on a 232-186 vote, although the Senate declined to act on that measure. The resulting increase brought the debt limit to $15,194 billion. In late December 2011, the debt limit came within $100 billion of its statutory limit, which triggered a provision allowing the President to issue a certification that would lead to a third increase of $1,200 billion. By design, that increase matched budget reductions slated to be made through sequestration and related mechanisms over the FY2013-FY2021 period. That increase was also subject to a joint resolution of disapproval. The President reportedly delayed that request to allow Congress to consider a disapproval measure. On January 18, 2012, the House passed such a measure ( H.J.Res. 98 ) on a 239-176 vote. The Senate declined to take up a companion measure ( S.J.Res. 34 ) and on January 26, 2012, voted down a motion to proceed (44-52) on the House-passed measure ( H.J.Res. 98 ), thus clearing the way for the increase, resulting in a debt limit of $16,394 billion. The third increase could also have been triggered in two other ways. A debt limit increase of $1,500 billion would have been permitted if the states had received a balanced budget amendment for ratification. A measure ( H.J.Res. 2 ) to accomplish that, however, failed to reach the constitutionally mandated two-thirds threshold in the House in a 261–165 vote held on November 18, 2011. The debt limit could also have been increased by between $1,200 billion and $1,500 billion had recommendations from the Joint Select Committee on Deficit Reduction, popularly known as the Super Committee, been reported to and passed by each chamber. If those recommendations had been estimated to achieve an amount between $1,200 billion and $1,500 billion, the debt limit increase would be matched to that figure. The Joint Select Committee, however, was unable to agree on a set of recommendations. On December 26, 2012, the U.S. Treasury stated that the debt would reach its limit on December 31 and that the Treasury Secretary would declare a debt issuance suspension period to authorize extraordinary measures (noted above, described below) that could be used to meet federal payments for approximately two months. As predicted, federal debt did reach its limit on December 31, when large biannual interest payments, in the form of Treasury securities, were made to certain trust funds. The U.S. Treasury stressed that these extraordinary measures would be exhausted more quickly than in recent debt limit episodes for various technical reasons. A January 14, 2013, letter from Treasury Secretary Geithner also estimated that extraordinary measures would be exhausted sometime between mid-February or early March 2013. CBO had previously estimated that federal debt would reach its limit near the end of December 2012, and that the extraordinary measures could be used to fund government activities until mid-February or early March 2013. During the 112 th Congress, Speaker John Boehner had stated that a future debt limit increase should be linked to spending cuts of at least the same magnitude, a position that reflects the structure of the Budget Control Act. House Republicans decided on January 18, 2013, to propose a three-month suspension of the debt limit tied to a provision that would delay Members' salaries in the event that their chamber of Congress had not agreed to a budget resolution. H.R. 325 , according to its sponsor, would allow Treasury to pay bills coming due before May 18, 2013. A new debt limit would then be set on May 19. The measure would also cause salaries of Members of Congress to be held in escrow "(i)f by April 15, 2013, a House of Congress had not agreed to" a budget resolution. Such a provision, however, could raise constitutional issues under the Twenty-Seventh Amendment. On January 23, 2013, the House passed H.R. 325 , which suspended the debt limit until May 19, 2013, on a 285-144 vote. The Senate passed the measure on January 31 on a 64-34 vote; it was then signed into law ( P.L. 113-3 ) on February 4. Once H.R. 325 was signed into law on February 4, the U.S. Treasury replenished funds that had been used to meet federal payments, thus resetting its ability to use extraordinary measures. As of February 1, 2013, the U.S. Treasury had used about $31 billion in extraordinary measures. Statutory language that grants the Treasury Secretary the authority to declare a "debt issuance suspension period" (DISP), which permits certain extraordinary measures, also requires that "the Secretary of the Treasury shall immediately issue" amounts to replenish those funds once a debt issuance suspension period (DISP) is over. A DISP extends through "any period for which the Secretary of the Treasury determines for purposes of this subsection that the issuance of obligations of the United States may not be made without exceeding the public debt limit." Shortly after the declaration of a new debt issuance suspension period in February 2013, Jacob Lew was confirmed as Treasury Secretary, replacing Timothy Geithner. Once the debt limit suspension lapsed after May 18, 2013, the U.S. Treasury reset the debt limit at $16,699 billion, or $305 billion above the previous statutory limit. On May 20, 2013, the first business day after the expiration of the suspension, debt subject to limit was just $25 million below the limit. Some Members, as noted above, stated that H.R. 325 ( P.L. 113-3 ) was intended to prevent the U.S. Treasury from accumulating cash balances. The U.S. Treasury's operating cash balances at the start of May 20, 2013 ($34 billion), were well below balances ($60 billion) at the close of February 4, 2013, when H.R. 325 was enacted. Some experienced analysts had stated that the exact method by which the debt limit would be computed according to the provisions of P.L. 113-3 was not fully clear. The U.S. Treasury has not provided details of how it computed the debt limit after the suspension lapsed. Treasury Secretary Jacob Lew notified Congress on May 20, 2013, that he had declared a new debt issuance suspension period (DISP), triggering authorities that allow the Treasury Secretary to use extraordinary measures to meet federal obligations until August 2. On August 2, 2013, Secretary Lew notified Congress that the DISP would be extended to October 11, 2013. In those notifications, as well in other communications, Secretary Lew urged Congress to raise the debt limit in a "timely fashion." How long the U.S. Treasury could have continued to pay federal obligations absent an increase in the debt limit depended on economic conditions, which affect tax receipts and spending on some automatic stabilizer programs, and the pace of federal spending. Stronger federal revenue collections and a slower pace of federal outlays in 2013 reduced the FY2013 deficit compared to previous years. CBO estimates for July 2013 put the total federal deficit at $606 billion in FY2013, well below the FY2012 deficit of $1,087 billion, implying a slower overall pace of borrowing. Special dividends from mortgage giants Fannie Mae and Freddie Mac also extended the U.S. Treasury's ability to meet federal obligations. In May 2013, the investment bank Goldman Sachs projected that, with the addition of the Fannie Mae dividend and an estimated postsuspension $16.70 trillion limit, federal borrowing capacity would be exhausted in early October. Estimates of Treasury cash flows are subject to substantial uncertainty. The U.S. Treasury Inspector General reported in 2012 that "the margin of error in these estimates at a 98 percent confidence level is plus or minus $18 billion for one week into the future and plus or minus $30 billion for two weeks into the future." In September 2008, Fannie Mae and Freddie Mac entered voluntary conservatorship. As part of their separate conservatorship agreements, Treasury agreed to support Fannie Mae and Freddie Mac in return for senior preferred stock that would pay dividends. Losses for Fannie Mae and Freddie Mac while in conservatorship have totaled $123 billion, although each has been profitable since the start of 2012. For a profitable firm, some past losses can offset future tax liabilities and would be recognized on its balance sheet as a "deferred tax asset" under standard accounting practices. Fannie Mae and Freddie Mac wrote down the value of their tax assets because their return to profitability was viewed as unlikely. The return of Fannie Mae and Freddie Mac to profitability opened the possibility for a reversal of those writedowns. On May 9, 2013, Fannie Mae announced that it would reverse the writedown of its deferred tax assets. The Treasury agreements, as amended, set the dividend payments to a sweep (i.e., an automatic transfer at the end of a quarter) of Fannie Mae's and Freddie Mac's net worth. Thus a reversal of that writedown of the deferred tax assets triggered a payment of about $60 billion from Fannie Mae to the U.S. Treasury on June 28, 2013. The U.S. Treasury received $66.3 billion from Fannie Mae and Freddie Mac on that date. Fannie Mae stated that it would pay an additional $10.2 billion in September 2013. On August 7, 2013, Freddie Mac announced that it had not yet decided to write down its deferred tax assets of $28.6 billion. In May 2013, Secretary Lew had notified Congress that he expects the U.S. Treasury will be able to meet federal obligations until at least Labor Day. Some private estimates suggest that the U.S. Treasury, with the assistance of extraordinary measures, would probably be able to meet federal obligations until mid-October or November 2013. By comparison, in 2011, Treasury Secretary Geithner invoked authority to use extraordinary measures on May 16, 2011, which helped fund payments until the debt ceiling was raised on August 2, 2011. On August 26, 2013, Treasury Secretary Lew notified congressional leaders that the government would exhaust its ability to borrow in mid-October according to U.S. Treasury projections. At that point, the U.S. Treasury would have only an estimated $50 billion in cash to meet federal obligations. With that cash and incoming receipts, the U.S. Treasury would be able to meet obligations for some weeks after mid-October according to independent analysts, although projecting when cash balances would be exhausted is difficult. On September 25, 2013, Secretary Lew sent another letter to Congress with updated forecasts of the U.S. Treasury's fiscal situation. According to those forecasts, the U.S. Treasury would exhaust its borrowing capacity no later than October 17. At that point, the U.S. Treasury would have about $30 billion in cash balances on hand to meet federal obligations. At the close of business on October 8, 2013, the U.S. Treasury had an operating cash balance of $35 billion. On October 3, 2013, the U.S. Treasury issued a brief outlining potential macroeconomic effects of the prospect that the federal government would be unable to pay its obligations in a timely fashion. The brief provided data on how various measures of economic confidence, asset prices, and market volatility responded to the debt limit episode in the summer of 2011. In the absence of a debt limit increase, the cash balances on hand when the U.S. Treasury's borrowing capacity ran out would then dwindle. At the close of business on October 11, 2013, the U.S. Treasury's cash balance was $35 billion. Those low cash balances, however, could raise two complications even before that point. First, low cash balances could have complicated federal debt management and Treasury auctions in late October or early November. Yields for Treasury bills maturing after the October 17 date mentioned in Secretary Lew's September 25 letter have increased relative to other yields on other Treasury securities. This appeared to signal reluctance among some investors to hold Treasury securities that might be affected by debt limit complications. Second, repo lending, which relies heavily on Treasury securities for collateral, could become more expensive or could be disrupted. Repo lending rates rose sharply in early August 2011 during the 2011 debt limit episode, but fell to previous levels once that episode was resolved. In the past, some financial markets have reacted to impending debt limit deadlines, signaling concerns about the federal government's ability to meet obligations in a timely manner. In early October 2013, the U.S. Treasury issued a brief that outlined how various measures of economic confidence, asset prices, and market volatility responded to the debt limit episode in the summer of 2011, and the prospect that the federal government might not have been able to pay its obligations in a timely fashion. Some investors expressed reluctance to hold Treasury securities that might be affected by debt limit complications. Fidelity Investments, J.P. Morgan Investment Management Inc., and certain other funds stated in October 2013 that they had sold holdings of Treasury securities scheduled to mature or to have coupon payments between October 16 and November 6, 2013. In October 2013, yields for Treasury bills maturing in the weeks after October 17—when the U.S. Treasury's borrowing capacity was projected to be exhausted—rose sharply relative to yields on Treasury securities maturing in 2014. Figure 1 shows secondary market yields on Treasury bills set to mature after the projected date when the Treasury's borrowing capacity would be exhausted. The horizontal axis shows days before the end of the DISP, and the vertical scale shows basis points (bps). For instance, the yield for the Treasury bill maturing October 24, 2013, rose from close to zero to 46 bps on October 15, 2013. Those yields are about 10 times larger than for similar bills that mature in calendar year 2014. A four-week Treasury bill auctioned on October 8, 2013, sold with a yield of 35 bps. By contrast, a four-week bill sold on September 4, 2013, sold with a yield of 2 bps. After enactment of a debt limit measure ( H.R. 2775 ; P.L. 113-46 ) on October 16, 2013, however, those yields returned to their previous levels. Congressional consideration of federal debt policy raised several policy issues that were explored in hearings and in broader policy discussions. On January 22, 2013, the House Ways and Means Committee held hearings on the history of the debt limit and how past Congresses and Presidents have negotiated changes in the debt limit. On April 10, 2013, the House Ways and Means Subcommittee on Oversight held hearings on federal debt and fiscal management when the debt limit binds. The Joint Economic Committee held hearings on the economic costs of uncertainty linked to the debt limit on September 18, 2013. On October 10, 2013, the Senate Finance Committee held hearings on the debt limit and heard testimony from Treasury Secretary Jacob Lew. On the same morning, the Senate Banking Committee held hearings on the effects of a possible federal default on financial stability and economic growth, and heard testimony from heads of financial industry trade associations. On April 30, 2013, the House Ways and Means Committee reported H.R. 807 , which would grant the Treasury Secretary the authority to borrow to fund principal and interest payments on debt held by the public and the Social Security trust funds if the debt limit were reached. The Treasury Secretary would also have had to submit weekly reports to Congress after that authority were exercised. On May 9, 2013, the House passed and amended version of H.R. 807 . The House also passed a version of H.J.Res. 59 that incorporated the text of H.R. 807 on September 20. On September 27, the Senate passed an amended version of the measure that did not contain provisions from H.R. 807 . The Obama Administration indicated that it would veto H.R. 807 or H.J.Res. 59 containing similar provisions, were either to be approved by Congress. The October 2013 debt limit measure ( H.R. 2775 ; P.L. 113-46 ) contained no payment prioritization provisions. H.R. 807 would have affected one aspect of the U.S. Treasury's financial management of the Social Security program, but would not alter other aspects. If the debt limit were reached, the U.S. Treasury could still face constraints that could raise challenges in financial management. The U.S. Treasury is responsible for (1) making Social Security beneficiary payments; (2) reinvesting Social Security payroll taxes and retirement contributions in special Treasury securities held by the Social Security trust fund; and (3) paying interest to the Social Security trust funds, in the form of special Treasury securities, at the end of June and December. Those special Treasury securities, either funded via Social Security payroll receipts or biannual interest payments, are subject to the debt limit. Thus, sufficient headroom under the debt limit is needed to issue those special Treasury securities. If the debt limit were reached and extraordinary measures were exhausted, the Treasury Secretary's legal requirement to reinvest Social Security receipts by issuing special Treasury securities could at times be difficult to reconcile with his legal requirement not to exceed the statutory debt limit. On September 25, Treasury Secretary Lew notified Congress that the government would exhaust its borrowing capacity around October 17 according to updated estimates. At that point, the U.S. Treasury would have had a projected cash balance of only $30 billion to meet federal obligations. On October 16, 2013, Congress passed a continuing resolution (Continuing Appropriations Act, 2014; H.R. 2775 ; P.L. 113-46 ) that included a provision to allow a suspension of the debt limit. That measure passed the Senate on an 81-18 vote. The House then passed the measure on a 285-144 vote. The President signed the bill ( P.L. 113-46 ) early the next morning. The measure suspended the debt limit until February 8, 2014, once the President certified that the U.S. Treasury would be unable to meet existing commitments without issuing debt. The President sent congressional leaders a certification on October 17, 2013, to trigger a suspension of the debt limit through February 7, 2014. That suspension, however, was subject to a congressional resolution of disapproval. If a resolution of disapproval had been enacted, the debt limit suspension would end on that date. Specific expedited procedures in each chamber governed the consideration of the resolution of disapproval. The resolution, if passed, was subject to veto. A resolution of disapproval ( H.J.Res. 99 ) was passed in the House on October 20, 2013, on a 222-191 vote. A similar measure, S.J.Res. 26 , was not approved by the Senate, so the debt limit increase was not blocked. The debt limit suspension ended on February 7, and a limit was set to reflect the amount of debt necessary to fund government operations before the end of the suspension. The U.S. Treasury was precluded in P.L. 113-46 from accumulating excess cash reserves that might have allowed an extension of extraordinary measures. The debt limit provisions enacted in October 2013 resemble provisions enacted in 2011 and earlier in 2013. For example, the Budget Control Act of 2011 ( P.L. 112-25 ) also provided for a congressional resolution of disapproval of a debt limit increase. The suspension of the debt limit in H.R. 2775 resembles the suspension enacted in February 2013 ( H.R. 325 ; P.L. 113-3 ). Passage of the Continuing Appropriations Act, 2014 was preceded by other proposals to modify the debt limit. On October 8, 2013, Senate Majority Leader Reid introduced S. 1569 , a measure intended to ensure complete and timely payment of federal obligations. The measure would have extended the suspension of the debt limit enacted in February 2013 ( P.L. 113-3 ). On October 15, 2013, an announcement of a hearing on a proposal to amend the Senate amendment to H.J.Res. 59 appeared on the House Rules Committee website. That hearing, according to a subsequent announcement, was postponed that evening. The measure would extend the debt limit through February 15, 2014, and restrict the Treasury Secretary's ability to employ extraordinary measures through April 15, 2014. The measure would also extend discretionary funding at "sequester levels" through December 15, 2013. The resolution of the debt limit episode and the ending of the federal shutdown in October 2013 set up a subsequent episode in early 2014. In late November 2013, CBO issued an analysis of Treasury cash flows and available extraordinary measures. Treasury, according to those estimates, might exhaust its ability to meet federal obligations in March. Because Treasury cash flows can be highly uncertain during tax refund season, CBO stated that that date could arrive as soon as February 2014 or as late as early June. Goldman Sachs had estimated that Treasury would probably exhaust its headroom—the sum of projected cash balances and remaining borrowing authority under the debt limit—in mid to late March, but might in fortuitous circumstances be able to meet its obligations until June. While Goldman Sachs and other independent forecasters noted that that the U.S. Treasury might possibly avoid running out of headroom in late March or early April, waiting until mid-March to address the debt limit could have raised serious risks for the U.S. government's financial situation. As the end of the debt limit suspension neared, the U.S. Treasury continued to warn Congress of the consequences on not raising the debt limit. While the Treasury could again employ extraordinary measures after the suspension ended after February 7, 2014, its ability to continue meeting federal obligations would be limited by large outflows of cash resulting from individual income tax refunds. In December 2013, the U.S. Treasury had notified congressional leaders that according to its estimates, extraordinary measures would extend its borrowing authority "only until late February or early March 2014." On January 22, 2014, Secretary Lew called for an increase in the debt limit before the end of debt limit suspension on February 7, 2014, or the end of February. In the first week of February 2014, Secretary Lew stated that the U.S. Treasury could not be certain that extraordinary measures would last beyond February 27, 2014. On February 7, 2014, the debt limit suspension ended and the U.S. Treasury reset the debt limit to $17,212 billion. On the same day, the U.S. Treasury also suspended sales of State and Local Government Series (SLGS), the first of its extraordinary measures. On February 10, Secretary Lew notified Congress that he had declared a debt issuance suspension period (DISP) that authorizes use of other extraordinary measures. In particular, during a DISP the Treasury Secretary is authorized to suspend investments in the Civil Service and Retirement and Disability Fund and the G Fund of the Federal Employees' Retirement System. The DISP was scheduled to last until February 27. Following the lapse of the debt limit suspension, Congress moved quickly to address the debt limit issue. On February 10, 2014, the House Rules Committee posted an amended version of S. 540 that would suspend the debt limit through March 15, 2015. The debt limit would be raised the following day by an amount tied to the amount of borrowing required by federal obligations during the suspension period. The U.S. Treasury would also be prohibited from creating a cash reserve above that level. The measure also would have reversed a 1% reduction in the cost-of-living adjustment for certain working-age military retirees that had been included in the Bipartisan Budget Act of 2013 (BBA; P.L. 113-67 ). In addition, sequestration of nonexempt mandatory spending would be extended from FY2023 to FY2024. CBO issued a cost estimate of the measure on February 11, 2014. On February 11, 2014, the House voted 221-201 to suspend the debt limit ( S. 540 ) through March 15, 2015. The amended measure included restrictions on Treasury debt management in the version reported by the Rules Committee, but omitted provisions to reverse reductions in cost-of-living adjustments to working-age military retiree pensions and an extension of nondefense mandatory sequestration. The Senate voted to concur in the House amendment the following day on a 55-43 vote. The President signed the measure ( P.L. 113-83 ) on February 15, 2014. Unlike previous measures that suspended the debt limit, a presidential certification was not required. A separate measure was also signed into law on the same day ( P.L. 113-82 ) to reverse reductions in cost-of-living adjustments to working-age military retiree pensions for those who entered the military before the beginning of 2014. The debt limit, which had been suspended through March 15, 2015, was reestablished the following day at $18,113 billion. The debt limit was raised, in essence, by the sum of payments made during the suspension period to meet federal obligations. Treasury Secretary Lew sent congressional leaders a letter on March 6, 2015, stating that Treasury would suspend issuance of State and Local Government Series (SLGS) bonds on March 13, 2015, the last business day during the current debt limit suspension. SLGS are used by state and local governments to manage certain intergovernmental funds in a way that complies with federal tax laws. Once the most recent debt limit suspension lapsed, Treasury Secretary Lew declared a Debt Issuance Suspension Period (DISP) on March 16, 2015, which empowered him to use extraordinary measures to meet federal fiscal obligations until July 30, 2015. On July 30, 2015, Treasury Secretary Lew sent congressional leaders a letter to invoke extraordinary powers again until the end of October. Secretary Lew indicated in a separate letter, sent the previous day, that those extraordinary measures would enable the U.S. Treasury to meet federal financial obligations "for at least a brief additional period of time" after the end of October. Secretary Lew sent another letter on September 10, 2015, that reiterated those points. In May 2015, the U.S. Treasury changed its cash management policy to adopt recommendations of the Treasury Borrowing Advisory Committee and an internal review. The new policy is intended to ensure that the U.S. Treasury could continue to meet federal obligations even if its market access were disrupted for a week or so. Treasury Secretary Lew noted that an event of the scale such as "Hurricane Sandy, September 11, or a potential cyber-attack disruption" might cause a lapse in market access. The new cash management policy does not affect the date when the debt limit might constrain the U.S. Treasury's ability to meet federal obligations. The U.S. Treasury's headroom under the debt limit consists of remaining amounts of funds available for extraordinary measures and available cash reserves. When federal receipts exceed federal outlays, that headroom expands, except for those receipts or outlays that are linked to intragovernmental accounts such as Social Security. The headroom gained by those receipts is exactly offset because Treasury must issue special securities to the appropriate intragovernmental trust fund, and those securities are subject to the debt limit. Conversely, when outlays are funded by such intragovernmental accounts, the increase in Treasury's headroom due to redemption of special securities is offset by Treasury's need to provide funding for that redemption either by drawing down cash balances or additional borrowing. On October 15, 2015, Secretary Lew stated that extraordinary measures would have been exhausted "no later than" November 3, 2015, although a relatively small cash reserve—projected at less than $30 billion—would be on hand. Secretary Lew had previously stated that extraordinary measures would be exhausted about November 5, 2015. Independent forecasts of when extraordinary measures would be exhausted were close to the date estimated by the U.S. Treasury. One private forecast estimated Treasury's headroom under the debt limit at $38 billion on November 5, 2015. CBO, according to an October 14, 2015, report, projected that "Treasury will begin running a very low cash balance in early November, and the extraordinary measures will be exhausted and the cash balance entirely depleted sometime during the first half of November." Figure 2 shows one recent independent estimate of Treasury's headroom that shows Treasury's available resources falling below $50 billion after the first few days of November 2015. Previous independent estimates of when Treasury's borrowing capacity would be exhausted suggested that leaving the debt limit at its present level would suffice until the end of November or even early December. For example, CBO's August 2015 projections had put the estimated date of exhaustion somewhere between mid-November and early December 2015. Lower than expected tax receipts during the fall of 2015 and higher than expected federal trust fund investments pushed the date back from what outside forecasters had expected earlier in the year. For example, net issuance of Government Account Series securities—which includes special Treasury securities held by federal trust funds—was about $10 billion higher on the first day of FY2016 as compared to the first day of FY2015. On October 9, 2015, the U.S. Treasury issued a summary of debt balances that provided a more detailed view of its headroom under the debt limit. According to that summary, Treasury had used $355 billion of its available $369 billion in extraordinary measures as of October 7, 2015, leaving $14 billion to meet forthcoming obligations. Secretary Lew noted in previous correspondence with Congress that projections of Treasury's ability to meet federal obligations were subject to significant uncertainty due to the variability of federal tax collections and expenditure patterns. While the U.S. Treasury's payment calendar, tax due dates, and securities auction schedule are generally regular and predictable, the amounts paid or received on a given day can fluctuate substantially. Late on the night of October 26, 2015, text of the Bipartisan Budget Agreement of 2015 was issued. The proposal included a provision to suspend the debt limit until March 15, 2017. The debt limit would then come back into effect on the following day at a level reflecting the payment of federal obligations incurred during the suspension period. As with previous debt limit suspensions, the measure prohibits the U.S. Treasury from creating a cash reserve beyond amounts necessary to meet federal obligations during the suspension period. The Bipartisan Budget Act of 2015 would also increase statutory caps on discretionary spending for FY2016 and FY2017, along with measures aimed at offsetting those increases. On October 27, 2015, the House Rules Committee provided a summary of its provisions and put forth an amendment aimed at addressing certain scoring issues. The following day, the House concurred with a modified version of the Senate amendments to H.R. 1314 on a 266-167 vote. The Senate concurred with that version on October 30, 2015, on a 64-35 vote, sending the measure to the President, who signed it ( P.L. 114-74 ) on November 2, 2015. Enactment of the measure thus resolved the 2015 debt limit episode by suspending the debt limit until March 15, 2017. On September 10, 2015, the House Ways and Means Committee reported H.R. 692 , which would grant the Treasury Secretary the authority to borrow to fund principal and interest payments on debt held by the public. The measure resembles H.R. 807 , which was considered in 2013 and is discussed above. The House passed H.R. 692 on October 21, 2015, by a 235-194 vote. The House Ways and Means Committee also reported H.R. 3442 on the same date, which would require the Treasury Secretary to appear before the House Committee on Ways and Means and the Senate Committee on Finance during a debt limit episode and to submit a report on the federal debt. The U.S. Treasury submitted two reports to Congress on extraordinary measures used during the 2015 debt limit episode. The first described actions affecting the G Fund and the second described actions taken affecting the Civil Service Retirement and Disability Fund. In May 2015, Treasury officials announced a policy shift to maintain a larger cash balance—not less than approximately $150 billion in normal circumstances—that would suffice to meet federal obligations in the event of a week-long disruption of access to capital markets. During a November 2, 2016, meeting between Treasury officials and a panel of financiers, concerns were raised that the interaction of debt limit constraints in 2017 with changes in the structure of money market funds (MMFs) that have increased demand for Treasury bills could risk disruption of short-term funding markets. On March 7, 2017, CBO issued estimates that extraordinary measures could suffice to meet federal obligations until sometime in the fall of 2017. Such estimates are subject to substantial uncertainty due to changes in economic conditions, federal revenue flows, changes in the amounts and timing of federal payments, and other factors. On March 8, 2017, Treasury Secretary Mnuchin notified Congress that he would invoke authorities to use extraordinary measures after March 15, 2017, to ensure continued payment of federal obligations. On March 16, 2017, Secretary Mnuchin notified congressional leaders that he had indeed exercised those authorities. The debt limit on that date was reset at $19,809 billion. In testimony before Congress on May 24, 2017, Administration officials urged Congress to raise the debt limit before its summer recess. Office of Management and Budget (OMB) Director Mick Mulvaney stated that the federal receipts were coming in more slowly than projected, which could imply that Treasury's capacity to meet federal obligations could be exhausted sooner than previously projected. A Goldman Sachs analysis found, however, that some major categories of tax receipts had shown stronger growth. On July 28, 2017, Treasury Secretary Mnuchin sent a letter to Congress stating that extraordinary measures would be used until September 29, 2017. Secretary Mnuchin's letter did not state that Treasury's cash reserves or borrowing capacity would be exhausted on that date, but he did describe the need for legislative action by that date as "critical." Others had estimated that the U.S. Treasury would likely be able to meet federal obligations until sometime in early October 2017. Treasury cash balances and borrowing capacity in mid-September, however, were projected to fall well below levels the U.S. Treasury has considered prudent to maintain operations in the face of significant adverse events. On September 3, 2017, Secretary Mnuchin argued that a debt limit measure should be tied to legislation responding to Hurricane Harvey, which caused extensive damage in southeast Texas. On September 6, 2017, outlines of an agreement on the debt limit and a continuing resolution were announced between President Trump and congressional leaders. The following day, the Senate, by an 80-17 vote, passed an amended version of H.R. 601 , which included an amendment ( S.Amdt. 808 ) to suspend the debt limit and provide funding for government operations through December 8, 2017, as well as supplemental appropriations for disaster relief. On September 8, 2017, the House agreed on a 316-90 vote to the amended measure, which the President signed the same day (Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-56 ). Treasury Secretary Mnuchin invoked authorities to use extraordinary measures once that debt limit suspension lapsed after December 8, 2017. He extended those authorities on January 30, 2018, through the end of February and urged congressional leaders to act on the debt limit before that time. Secretary Mnuchin did not indicate that the U.S. Treasury would exhaust its borrowing capacity or cash reserves by that date. CBO estimates and independent analysts had suggested that those extraordinary measures would have lasted until sometime in early March. In July 2018, Secretary Mnuchin issued a report to Congress detailing its use of extraordinary measures. On February 9, 2018, enactment of the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ) resolved the debt limit issue until 2019. BBA 2018 employed a legislative vehicle, H.R. 1892 , which had passed in both the House and Senate in different forms in 2017. On February 9, 2018, differences in the amended measure were resolved by a vote of 71 to 28 in the Senate and a vote of 240 to 186 in the House. BBA 2018 also increased statutory caps on discretionary spending, extended funding of the government until March 23, 2018 (Section 20101), and funded certain disaster assistance programs, among other provisions. Section 30301 of BBA 2018 suspended the debt limit through March 1, 2019, as noted above. The limit was reset on March 2, 2019, at $21.988 trillion, a level that accommodates federal obligations during the suspension period. On the following Monday—March 4, 2019—Treasury Secretary Steven Mnuchin invoked extraordinary authorities by declaring a debt issuance suspension period, during which the U.S. Treasury will then use its cash balances, incoming revenues, and extraordinary measures to meet federal obligations. CBO estimated that Treasury would have financial resources to meet federal obligations until just before or just after October 1, 2019. Some private forecasts have estimated Treasury's resources would be exhausted around August 2019.
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The Constitution grants Congress the power to borrow money on the credit of the United States—one part of its power of the purse—and thus mandates that Congress exercise control over federal debt. Control of debt policy has at times provided Congress with a means of raising concerns regarding fiscal policies. Debates over federal fiscal policy have been especially animated in the past decade, in part because of the accumulation of federal debt in the wake of the 2007-2008 financial crisis and subsequent recession. Rising debt levels, along with continued differences in views of fiscal policy, led to a series of contentious debt limit episodes in recent years. The most recent suspension of the debt limit lapsed after March 1, 2019. The limit was then reset at $21.988 trillion, a level that accommodates federal obligations incurred during the suspension period. U.S. Treasury Secretary Steven Mnuchin invoked extraordinary authorities on March 4, 2019. CBO estimates that Treasury could meet federal obligations until just before or just after October 1, 2019. One private estimate suggests Treasury could cover federal payments until mid-August, if not later. Such estimates are subject to considerable uncertainty. The 2011 debt limit episode was resolved on August 2, 2011, when President Obama signed the Budget Control Act of 2011 (BCA; S. 365; P.L. 112-25). The BCA included provisions aimed at deficit reduction and allowing the debt limit to rise in three stages, the latter two subject to congressional disapproval. Once the BCA was enacted, a presidential certification triggered a $400 billion increase. A second certification led to a $500 billion increase on September 22, 2011, and a third, $1,200 billion increase took place on January 28, 2012. Federal debt again reached its limit on December 31, 2012. Extraordinary measures were again used to allow payment of government obligations until February 4, 2013, when H.R. 325, which suspended the debt limit until May 19, 2013, was signed into law (P.L. 113-3), which reset extraordinary measures. On October 16, 2013, enactment of a continuing resolution (H.R. 2775; P.L. 113-46) resolved a funding lapse and suspended the debt limit through February 7, 2014. On February 15, 2014, a measure to suspend the debt limit (S. 540; P.L. 113-83) through March 15, 2015, was enacted. On November 2, 2015, the Bipartisan Budget Act of 2015 (BBA2015; H.R. 1314; P.L. 114-74) was enacted, which suspended the debt limit through March 15, 2017, and relaxed some discretionary spending limits. On March 16, 2017, the debt limit was reset at $19,809 billion, and Treasury Secretary Mnuchin notified Congress that he had invoked authorities to use extraordinary measures. On September 6, 2017, an agreement on the debt limit and a continuing resolution was announced between President Trump and congressional leaders. Two days later a measure (P.L. 115-56) was enacted to implement that agreement, which included a suspension of the debt limit through December 8, 2017. Once that suspension lapsed—with a new debt limit set at $20,456 billion—Treasury Secretary Mnuchin invoked authorities to employ extraordinary measures, which estimates had suggested would last until early March. The debt limit issue was addressed when the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123) was enacted on February 9, 2018. Section 30301 of the BBA 2018 suspended the debt limit through March 1, 2019. Total federal debt increases when the government sells debt to the public to finance budget deficits, which adds to debt held by the public, or when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses—which adds to debt held by government accounts; or when new federal loans outpace loan repayments. The sum of debt held by the public and debt held by government accounts is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it.
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Established in 1953, the Small Business Administration's (SBA's) origins can be traced to the Great Depression of the 1930s and World War II, when concerns about unemployment and war production were paramount. The SBA assumed some of the functions of the Reconstruction Finance Corporation (RFC), which had been created by the federal government in 1932 to provide funding for businesses of all sizes during the Depression and later financed war production. During the early 1950s, the RFC was disbanded following charges of political favoritism in the granting of loans and contracts. In 1953, Congress passed the Small Business Act (P.L. 83-163), which authorized the SBA. The act specifies that the SBA's mission is to promote the interests of small businesses to enhance competition in the private marketplace: It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small-business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation. The SBA currently administers several types of programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. Congressional interest in these programs has increased in recent years, primarily because small businesses are viewed as a means to stimulate economic activity and create jobs. Many Members of Congress also regularly receive constituent inquiries about the SBA's programs. This report provides an overview of the SBA's programs and funding. It also references other CRS reports that examine the SBA's programs in greater detail. The SBA's FY2020 congressional budget justification document includes funding and program costs for the following programs and offices: 1. entrepreneurial development programs (including Small Business Development Centers, Women's Business Centers, SCORE, Entrepreneurial Education, Native American Outreach, PRIME, the State Trade Expansion Program, and veterans' programs); 2. disaster assistance; 3. capital access programs (including the 7(a) loan guaranty program, the 504/Certified Development Company [CDC] loan guaranty program, the Microloan program, International Trade and Export Promotion programs, and lender oversight); 4. contracting programs (including the 7(j) Management and Technical Assistance program, the 8(a) Minority Small Business and Capital Ownership Development program, the Historically Underutilized Business Zones [HUBZones] program, the Prime Contract Assistance program, the Women's Business program, the Subcontracting program, and the Surety Bond Guarantee program); 5. regional and district offices (counseling, training, and outreach services); 6. the Office of Inspector General (OIG); 7. capital investment programs (including the Small Business Investment Company [SBIC] program, the New Market Venture Capital program, the Small Business Innovation Research [SBIR] program, the Small Business Technology Transfer program [STTR], and growth accelerators); 8. the Office of Advocacy; and 9. executive direction programs (the National Women's Business Council, Office of Ombudsman, and Faith-Based Initiatives). Table 1 shows the SBA's estimated costs in FY2019 for these program areas. Program costs often differ from new budget authority provided in annual appropriations acts because the SBA has specified authority to carry over appropriations from previous fiscal years. The SBA also has limited, specified authority to shift appropriations among various programs. SBA disaster assistance is provided in the form of loans, not grants, which must be repaid to the federal government. The SBA's disaster loans are unique in two respects: they are the only loans made by the SBA that (1) go directly to the ultimate borrower and (2) are not limited to small businesses. SBA disaster loans are available to individuals, businesses, and nonprofit organizations in declared disaster areas. About 80% of the SBA's direct disaster loans are issued to individuals and households (renters and property owners) to repair and replace homes and personal property. In recent years, the SBA Disaster Loan Program has been the subject of regular congressional and media attention because of concerns expressed about the time it takes the SBA to process disaster loan applications. The SBA disbursed $401 million in disaster loans in FY2016, $889 million in FY2017, and $3.59 billion in FY2018. The SBA Disaster Loan Program includes the following categories of loans for disaster-related losses: home disaster loans, business physical disaster loans, and economic injury disaster loans. Homeowners, renters, and personal property owners located in a declared disaster area (and in contiguous counties) may apply to the SBA for loans to help recover losses from a declared disaster. Only victims located in a declared disaster area (and contiguous counties) are eligible to apply for disaster loans. Disaster declarations are "official notices recognizing that specific geographic areas have been damaged by floods and other acts of nature, riots, civil disorders, or industrial accidents such as oil spills." Five categories of declarations put the SBA Disaster Loan Program into effect. These include two types of presidential major disaster declarations as authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act) and three types of SBA declarations. The SBA's Home Disaster Loan Program falls into two categories: personal property loans and real property loans. These loans are limited to uninsured losses. The maximum term for SBA disaster loans is 30 years, but the law restricts businesses with credit available elsewhere to a maximum 7-year term. The SBA sets the installment payment amount and corresponding maturity based upon each borrower's ability to repay. A personal property loan provides a creditworthy homeowner or renter with up to $40,000 to repair or replace personal property items, such as furniture, clothing, or automobiles, damaged or lost in a disaster. These loans cover only uninsured or underinsured property and primary residences and cannot be used to replace extraordinarily expensive or irreplaceable items, such as antiques or recreational vehicles. Interest rates vary depending on whether applicants are able to obtain credit elsewhere. For applicants who can obtain credit without SBA assistance, the interest rate may not exceed 8% per year. For applicants who cannot obtain credit without SBA assistance, the interest rate may not exceed 4% per year. A creditworthy homeowner may apply for a real property loan of up to $200,000 to repair or restore his or her primary residence to its predisaster condition. The loans may not be used to upgrade homes or build additions, unless upgrades or changes are required by city or county building codes. The interest rate for real property loans is determined in the same way as it is determined for personal property loans. Several types of loans, discussed below, are available to businesses and nonprofit organizations located in counties covered by a presidential disaster declaration. In certain circumstances, the SBA will also make these loans available when a governor, the Secretary of Agriculture, or the Secretary of Commerce makes a disaster declaration. Physical disaster loans are available to almost any nonprofit organization or business. Other business disaster loans are limited to small businesses. Any business or nonprofit organization, regardless of size, can apply for a physical disaster business loan of up to $2 million for repairs and replacements to real property, machinery, equipment, fixtures, inventory, and leasehold improvements that are not covered by insurance. Physical disaster loans for businesses may use up to 20% of the verified loss amount for mitigation measures in an effort to prevent loss from a similar disaster in the future. Nonprofit organizations that are rejected or approved by the SBA for less than the requested amount for a physical disaster loan are, in some circumstances, eligible for grants from the Federal Emergency Management Agency (FEMA). For applicants that can obtain credit without SBA assistance, the interest rate may not exceed 8% per year. For applicants that cannot obtain credit without SBA assistance, the interest rate may not exceed 4% per year. Economic injury disaster loans (EIDLs) are limited to small businesses as defined by the SBA's size regulations, which vary from industry to industry. If the Secretary of Agriculture designates an agriculture production disaster, small farms and small cooperatives are eligible. EIDLs are available in the counties included in a presidential disaster declaration and contiguous counties. The loans are designed to provide small businesses with operating funds until those businesses recover. The maximum loan is $2 million, and the terms are the same as personal and physical disaster business loans. The loan can have a maturity of up to 30 years and has an interest rate of 4% or less. The SBA's entrepreneurial development (ED) noncredit programs provide a variety of management and training services to small businesses. Initially, the SBA provided its own management and technical assistance training programs. Over time, the SBA has come to rely increasingly on third parties to provide that training. The SBA receives appropriations for seven ED programs and two ED initiatives: Small Business Development Centers (SBDCs); the Microloan Technical Assistance Program; Women Business Centers (WBCs); SCORE; the Program for Investment in Microentrepreneurs (PRIME); Veterans Programs (including Veterans Business Outreach Centers, Boots to Business, Veteran Women Igniting the Spirit of Entrepreneurship [VWISE], Entrepreneurship Bootcamp for Veterans with Disabilities, and Boots to Business: Reboot); the Native American Outreach Program (NAO); the Entrepreneurial Development Initiative (Regional Innovation Clusters); and the Entrepreneurship Education Initiative. FY2019 appropriations for these programs are $131 million for SBDCs, $31 million for the Microloan Technical Assistance Program, $18.5 million for WBCs, $11.7 million for SCORE, $5 million for PRIME, $12.7 million for Veterans Programs, $2 million for NAO, $5 million for the Entrepreneurial Development Initiative (Regional Innovation Clusters), and $3.5 million for the Entrepreneurship Education Initiative. Four additional programs are provided recommended funding in appropriations acts under ED programs, but are discussed in other sections of this report because of the nature of their assistance: (1) the SBA's Growth Accelerators Initiative ($2 million in FY2019) is a capital investment program and is discussed in the capital access programs section; (2) the SBA's 7(j) Technical Assistance Program ($2.8 million in FY2019) provides contacting assistance and is discussed in the contracting programs section; (3) the National Women's Business Council ($1.5 million in FY2019) is a bipartisan federal advisory council and is discussed in the executive direction programs section; and (4) the State Trade Expansion Program (STEP, $18 million in FY2019) provides grants to states to support export programs that assist small business concerns. STEP is discussed in the capital access programs' international trade and export promotion programs subsection. The SBA reports that over 1 million aspiring entrepreneurs and small business owners receive training from an SBA-supported resource partner each year. Some of this training is free, and some is offered at low cost. SBDCs provide free or low-cost assistance to small businesses using programs customized to local conditions. SBDCs support small business in marketing and business strategy, finance, technology transfer, government contracting, management, manufacturing, engineering, sales, accounting, exporting, and other topics. SBDCs are funded by grants from the SBA and matching funds. There are 63 lead SBDC service centers, one located in each state (four in Texas and six in California), the District of Columbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. These lead SBDC service centers manage more than 900 SBDC outreach locations. The SBA's Microloan Technical Assistance program is part of the SBA's Microloan program but receives a separate appropriation. It provides grants to Microloan intermediaries to offer management and technical training assistance to Microloan program borrowers and prospective borrowers. There are currently 147 active Microloan intermediaries serving 49 states, the District of Columbia, and Puerto Rico. WBCs are similar to SBDCs, except they concentrate on assisting women entrepreneurs. There are currently 121 WBCs, with at least one WBC in most states and territories. SCORE was established on October 5, 1964, by then-SBA Administrator Eugene P. Foley as a national, volunteer organization, uniting more than 50 independent nonprofit organizations into a single, national nonprofit organization. SCORE's 320 chapters and more than 800 branch offices are located throughout the United States and partner with more than 11,000 volunteer counselors, who are working or retired business owners, executives, and corporate leaders, to provide management and training assistance to small businesses. PRIME provides SBA grants to nonprofit microenterprise development organizations or programs that have "a demonstrated record of delivering microenterprise services to disadvantaged entrepreneurs; an intermediary; a microenterprise development organization or program that is accountable to a local community, working in conjunction with a state or local government or Indian tribe; or an Indian tribe acting on its own, if the Indian tribe can certify that no private organization or program referred to in this paragraph exists within its jurisdiction." The SBA's Office of Veterans Business Development (OVBD) administers several management and training programs to assist veteran-owned businesses, including 22 Veterans Business Outreach Centers which provide "entrepreneurial development services such as business training, counseling and resource partner referrals to transitioning service members, veterans, National Guard & Reserve members and military spouses interested in starting or growing a small business." The SBA's Office of Native American Affairs provides management and technical educational assistance to Native Americans (American Indians, Alaska natives, native Hawaiians, and the indigenous people of Guam and American Samoa) to start and expand small businesses. The SBA reports that "regional innovation clusters are on-the-ground collaborations between business, research, education, financing and government institutions that work to develop and grow the supply chain of a particular industry or related set of industries in a geographic region." The SBA has supported the Entrepreneurial Development Initiative (Regional Innovation Clusters) since FY2009, and the initiative has received recommended appropriations from Congress since FY2010. The SBA's Entrepreneurship Education initiative provides assistance to high-growth small businesses in underserved communities through the Emerging Leaders initiative and the SBA Learning Center. The Emerging Leaders initiative is a seven‐month executive leader education series consisting of "more than 100 hours of specialized training, technical support, access to a professional network, and other resources to strengthen their businesses and promote economic development." At the conclusion of the training, "participants produce a three‐year strategic growth action plan with benchmarks and performance targets that help them access the necessary support and resources to move forward for the next stage of business growth." The Learning Center is the SBA's primary online training service, which offers free online courses on business planning, marketing, government contracting, accounting, and social media, providing learners an "opportunity to access entrepreneurship education resources through toolkits, fact sheets, infographic tip sheets, instructor guides, and audio content." The SBA has authority to make direct loans but, with the exception of disaster loans and loans to Microloan program intermediaries, has not exercised that authority since 1998. The SBA indicated that it stopped issuing direct business loans primarily because the subsidy rate was "10 to 15 times higher" than the subsidy rate for its loan guaranty programs. Instead of making direct loans, the SBA guarantees loans issued by approved lenders to encourage those lenders to provide loans to small businesses "that might not otherwise obtain financing on reasonable terms and conditions." With few exceptions, to qualify for SBA assistance, an organization must be both a business and small. To participate in any of the SBA programs, a business must meet the Small Business Act's definition of small business . This is a business that is organized for profit; has a place of business in the United States; operates primarily within the United States or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor; is independently owned and operated; is not dominant in its field on a national basis; and does not exceed size standards established, and updated periodically, by the SBA. The business may be a sole proprietorship, partnership, corporation, or any other legal form. The SBA uses two measures to determine if a business is small: SBA-derived industry specific size standards or a combination of the business's net worth and net income. For example, businesses participating in the SBA's 7(a) loan guaranty program are deemed small if they either meet the SBA's industry-specific size standards for firms in 1,047 industrial classifications in 18 subindustry activities described in the North American Industry Classification System (NAICS) or do not have more than $15 million in tangible net worth and not more than $5 million in average net income after federal taxes (excluding any carryover losses) for the two full fiscal years before the date of the application. All of the company's subsidiaries, parent companies, and affiliates are considered in determining if it meets the size standard. The SBA's industry size standards vary by industry, and they are based on one of the following four measures: the firm's (1) average annual receipts in the previous three years, (2) number of employees, (3) asset size, or (4) for refineries, a combination of number of employees and barrel per day refining capacity. Historically, the SBA has used the number of employees to determine if manufacturing and mining companies are small and average annual receipts for most other industries. The SBA's size standards are designed to encourage competition within each industry; they are derived through an assessment of the following four economic factors: "average firm size, average assets size as a proxy of start-up costs and entry barriers, the 4-firm concentration ratio as a measure of industry competition, and size distribution of firms." The SBA also considers the ability of small businesses to compete for federal contracting opportunities and, when necessary, several secondary factors "as they are relevant to the industries and the interests of small businesses, including technological change, competition among industries, industry growth trends, and impacts of size standard revisions on small businesses." The SBA provides loan guarantees for small businesses that cannot obtain credit elsewhere. Its largest loan guaranty programs are the 7(a) loan guaranty program, the 504/CDC loan guaranty program, international trade and export promotion programs, and the Microloan program. The SBA's loan guaranty programs require personal guarantees from borrowers and share the risk of default with lenders by making the guaranty less than 100%. In the event of a default, the borrower owes the amount contracted less the value of any collateral liquidated. The SBA can attempt to recover the unpaid debt through administrative offset, salary offset, or IRS tax refund offset. Most types of businesses are eligible for loan guarantees, but a few are not. A list of ineligible businesses (such as insurance companies, real estate investment firms, firms involved in financial speculation or pyramid sales, and businesses involved in illegal activities) is contained in 13 C.F.R. Section 120.110. With one exception, nonprofit and charitable organizations are also ineligible. As shown in the following tables, most of these programs charge fees to help offset program costs, including costs related to loan defaults. In most instances, the fees are set in statute. For example, for 7(a) loans with a maturity exceeding 12 months, the SBA is authorized to charge lenders an up-front guaranty fee of up to 2% for the SBA guaranteed portion of loans of $150,000 or less, up to 3% for the SBA guaranteed portion of loans exceeding $150,000 but not more than $700,000, and up to 3.5% for the SBA guaranteed portion of loans exceeding $700,000. Lenders with a 7(a) loan that has a SBA guaranteed portion in excess of $1 million can be charged an additional fee not to exceed 0.25% of the guaranteed amount in excess of $1 million. 7(a) loans are also subject to an ongoing servicing fee not to exceed 0.55% of the outstanding balance of the guaranteed portion of the loan. In addition, lenders are authorized to collect fees from borrowers to offset their administrative expenses. In an effort to assist small business owners, in FY2019, the SBA is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reducing the up-front one-time guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019; and pursuant to P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, the up-front, one-time guaranty fee on all veteran loans under the 7(a) SBAExpress program (up to and including $350,000). The SBA's goal is to achieve a zero subsidy rate, meaning that the appropriation of budget authority for new loan guaranties is not required. As shown in Table 2 , the SBA's fees and proceeds from loan liquidations do not always generate sufficient revenue to cover loan losses, resulting in the need for additional appropriations to account for the shortfall. However, "due to the continued improvement in performance in the loan portfolio," the SBA did not request funding for credit subsidies for the 7(a) and 504/CDC loan guaranty programs in FY2016-FY2019. The 7(a) loan guaranty program is named after the section of the Small Business Act that authorizes it. These are loans made by SBA lending partners (mostly banks but also some other financial institutions) and partially guaranteed by the SBA. In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25.4 billion. In FY2018, there were 1,810 active lending partners providing 7(a) loans. The 7(a) program's current guaranty rate is 85% for loans of $150,000 or less and 75% for loans greater than $150,000 (up to a maximum guaranty of $3.75 million—75% of $5 million). Although the SBA's offer to guarantee a loan provides an incentive for lenders to make the loan, lenders are not required to do so. Lenders are permitted to charge borrowers fees to recoup specified expenses and are allowed to charge borrowers "a reasonable fixed interest rate" or, with the SBA's approval, a variable interest rate. The SBA uses a multistep formula to determine the maximum allowable fixed interest rate for all 7(a) loans (with the exception of the Export Working Capital Program and Community Advantage loans) and periodically publishes that rate and the maximum allowable variable interest rate in the Federal Register . Maximum interest rates allowed on variable-rate 7(a) loans are pegged to either the prime rate, the 30-day London Interbank Offered Rate (LIBOR) plus 3%, or the SBA optional peg rate, which is a weighted average of rates that the federal government pays for loans with maturities similar to the guaranteed loan. The allowed spread over the prime rate, LIBOR base rate, or SBA optional peg rate depends on the loan amount and the loan's maturity (under seven years or seven years or more). The adjustment period can be no more than monthly and cannot change over the life of the loan. Table 3 provides information on the 7(a) program's key features, including its eligible uses, maximum loan amount, loan maturity, fixed interest rates, and guarantee fees. The 7(a) program has several specialized programs that offer streamlined and expedited loan procedures for particular groups of borrowers, including the SBAExpress program (for loans of $350,000 or less), the Export Express program (for loans of up to $500,000 for entering or expanding an existing export market), and the Community Advantage pilot program (for loans of $250,000 or less). The SBA also has a Small Loan Advantage program (for loans of $350,000 or less), but it is currently being used as the 7(a) program's model for processing loans of $350,000 or less and exists as a separate, specialized program in name only. The SBAExpress program was established as a pilot program by the SBA on February 27, 1995, and made permanent through legislation, subject to reauthorization, in 2004 ( P.L. 108-447 , the Consolidated Appropriations Act, 2005). The program is designed to increase the availability of credit to small businesses by permitting lenders to use their existing documentation and procedures in return for receiving a reduced SBA guarantee on loans. It provides a 50% loan guarantee on loan amounts of $350,000 or less. The loan proceeds can be used for the same purposes as the 7(a) program, except participant debt restructuring cannot exceed 50% of the project and may be used for revolving credit. The program's fees and loan terms are the same as the 7(a) program, except the term for a revolving line of credit cannot exceed seven years. The Community Advantage pilot program began operations on February 15, 2011, and is limited to mission-focused lenders targeting underserved markets. Originally scheduled to cease operations on March 15, 2014, the program has been extended several times and is currently scheduled to operate through September 30, 2022. As of September 12, 2018, there were 113 approved CA lenders, 99 of which were actively making and servicing CA loans. The SBA placed a moratorium, effective October 1, 2018, on accepting new CA lender applications, primarily as a means to mitigate the risk of future loan defaults. Lenders must receive SBA approval to participate in these 7(a) specialized programs. In addition to the 7(a) loan guaranty program, the SBA has special purpose loan guaranty programs for small businesses adjusting to the North American Free Trade Agreement (NAFTA), to support Employee Stock Ownership Program trusts, pollution control facilities, and working capital. Community Adjustment and Investment Program. The Community Adjustment and Investment Program (CAIP) uses federal funds to pay the fees on 7(a) and 504/CDC loans to businesses located in communities that have been adversely affected by NAFTA. Employee Trusts. The SBA will guarantee loans to Employee Stock Ownership Plans (ESOPs) that are used either to lend money to the employer or to purchase control from the owner. ESOPs must meet regulations established by the IRS, Department of the Treasury, and Department of Labor. These are 7(a) loans. Pollution Control. In 1976, the SBA was provided authorization to guarantee the payment of rentals or other amounts due under qualified contracts for pollution control facilities. P.L. 100-590 , the Small Business Reauthorization and Amendment Act of 1988, eliminated the revolving fund for pollution control guaranteed loans and transferred its remaining funds to the SBA's business loan and investment revolving fund. Since 1989, loans for pollution control have been guaranteed under the 7(a) loan guaranty program. CAPLines. CAPLines are five special 7(a) loan guaranty programs designed to meet the requirements of small businesses for short-term or cyclical working capital. The maximum term is five years. The 504/CDC loan guaranty program uses Certified Development Companies (CDCs), which are private, nonprofit corporations established to contribute to economic development within their communities. Each CDC has its own geographic territory. The program provides long-term, fixed-rate loans for major fixed assets such as land, structures, machinery, and equipment. Program loans cannot be used for working capital, inventory, or repaying debt. A commercial lender provides up to 50% of the financing package, which is secured by a senior lien. The CDC's loan of up to 40% is secured by a junior lien. The SBA backs the CDC with a guaranteed debenture. The small business must contribute at least 10% as equity. To participate in the program, small businesses cannot exceed $15 million in tangible net worth and cannot have average net income of more than $5 million for two full fiscal years before the date of application. Also, CDCs must intend to create or retain one job for every $75,000 of the debenture ($120,000 for small manufacturers) or meet an alternative job creation standard if they meet any one of 15 community or public policy goals. In FY2018, the SBA approved 5,874 504/CDC loans totaling nearly $4.8 billion. Table 4 summarizes the 504/CDC loan guaranty program's key features. Although any of SBA's loan guaranty programs can be used by firms looking to begin exporting or expanding their current exporting operations, the SBA has three loan programs that specifically focus on trade and export promotion: 1. Export Express loan program provides working capital or fixed asset financing for firms that will begin or expand exporting. It offers a 90% guaranty on loans of $350,000 or less and a 75% guaranty on loans of $350,001 to $500,000. 2. Export Working Capital loan program provides financing to support export orders or the export transaction cycle, from purchase order to final payment. It offers a 90% guaranty of loans up to $5 million. 3. International Trade loan program provides long-term financing to support firms that are expanding because of growing export sales or have been adversely affected by imports and need to modernize to meet foreign competition. It offers a 90% guaranty on loans up to $5 million. In many ways, the SBA's trade and export promotion loan programs share similar characteristics with other SBA loan guaranty programs. For example, the Export Express program resembles the SBAExpress program. The SBAExpress program shares several characteristics with the standard 7(a) loan guarantee program except that the SBAExpress program has an expedited approval process, a lower maximum loan amount, and a smaller percentage of the loan guaranteed. Similarly, the Export Express program shares several of the characteristics of the standard International Trade loan program, such as an expedited approval process in exchange for a lower maximum loan amount ($500,000 compared with $5 million) and a lower percentage of guaranty. In addition, the SBA administers grants through the State Trade Expansion Program (STEP), which are awarded to states to execute export programs that assist small business concerns (such as a trade show exhibition, training workshops, or a foreign trade mission). Initially, the STEP program was authorized for three years and appropriated $30 million annually in FY2011 and FY2012. Congress approved $8 million in appropriations for STEP in FY2014, $17.4 million in FY2015, and $18 million annually since FY2016. The Microloan program provides direct loans to qualified nonprofit intermediary Microloan lenders that, in turn, provide "microloans" of up to $50,000 to small businesses and nonprofit child care centers. Microloan lenders also provide marketing, management, and technical assistance to Microloan borrowers and potential borrowers. The program was authorized in 1991 as a five-year demonstration project and became operational in 1992. It was made permanent, subject to reauthorization, by P.L. 105-135 , the Small Business Reauthorization Act of 1997. Although the program is open to all small businesses, it targets new and early stage businesses in underserved markets, including borrowers with little to no credit history, low-income borrowers, and women and minority entrepreneurs in both rural and urban areas who generally do not qualify for conventional loans or other, larger SBA guaranteed loans. In FY2018, 5,459 small businesses received a Microloan, totaling $76.8 million. The average Microloan was $14,071 and the average interest rate was 7.6%. Table 5 summarizes the Microloan program's key features. Several SBA programs assist small businesses in obtaining and performing federal contracts and subcontracts. These include various prime contracting programs; subcontracting programs; and other assistance (e.g., contracting technical training assistance, the federal goaling program, federal Offices of Small and Disadvantaged Business Utilization, and the Surety Bond Guarantee program). Several contracting programs allow small businesses to compete only with similar firms for government contracts or receive sole-source awards in circumstances in which such awards could not be made to other firms. These programs, which give small businesses a chance to win government contracts without having to compete against larger and more experienced companies, include the following: 8(a) Program. The 8(a) Minority Small Business and Capital Ownership Development Program (named for the section of the Small Business Act from which it derives its authority) is for businesses owned by persons who are socially and economically disadvantaged. In addition, an individual's net worth, excluding ownership interest in the 8(a) firm and equity in his or her primary personal residence, must be less than $250,000 at the time of application to the 8(a) Program, and less than $750,000 thereafter. A firm certified by the SBA as an 8(a) firm is eligible for set-aside and sole-source contracts. The SBA also provides technical assistance and training to 8(a) firms. Firms may participate in the 8(a) Program for no more than nine years. In FY2017, the federal government awarded $27.2 billion to 8(a) firms. About $16.4 billion of that amount was awarded with an 8(a) preference ($8 billion through an 8(a) set-aside and $8.4 billion through an 8(a) sole-source award). About $4.8 billion was awarded to an 8(a) firm in open competition with other firms. The remaining $6 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for HUBZone firms, women-owned small businesses, and service-disabled veteran-owned small businesses). Historically Underutilized Business Zone Program. This program assists small businesses located in Historically Underutilized Business Zones (HUBZones) through set-asides, sole-s ource awards, and price evaluation preferences in full and open competitions. The determination of whether an area is a HUBZone is based upon criteria specified in 13 C.F.R. Section 126.103. To be certified as a HUBZone small business, at least 35% of the small business's employees must generally reside in a HUBZone. In FY2017, the federal government awarded $7.53 billion to HUBZone-certified small businesses. About $1.90 billion of that amount was awarded with a HUBZone preference ($1.49 billion through a HUBZone set-aside, $65.3 million through a HUBZone sole-source award, and $346.9 million through a HUBZone price-evaluation preference). About $1.53 billion was awarded to HUBZone-certified small businesses in open competition with other firms. The remaining $4.10 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for 8(a), women-owned, and service-disabled veteran-owned small businesses). Service-Disabled Veteran-Owned Small Business Program. This program assists service-disabled veteran-owned small businesses through set-asides and sole-source awards. For purposes of this program, veterans and service-related disabilities are defined as they are under the statutes governing veterans affairs. In FY2017, the federal government awarded $18.2 billion to service-disabled veteran-owned small businesses. About $6.8 billion of that amount was awarded through a service-disabled veteran-owned small business set aside award. About $4.3 billion of that amount was awarded to a service-disabled veteran-owned small business in open competition with other firms. The remaining $7.1 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for HUBZone firms, 8(a) firms, and women-owned small businesses). Women-Owned Small Business Program. Under this program, contracts may be set aside for economically disadvantaged women-owned small businesses in industries in which women are underrepresented and women-owned small businesses in industries in which women are substantially underrepresented. Also, federal agencies may award sole-source contracts to women-owned small businesses so long as the award can be made at a fair and reasonable price, and the anticipated value of the contract is below $4 million ($6.5 million for manufacturing contracts). In FY2017, the federal government awarded $21.3 billion to women owned small businesses. About $648.9 million of that amount was awarded with a women owned small business preference ($580.5 million through a women owned small business set-aside and $68.4 million through a women owned small business sole-source award). About $7.0 billion of that amount was awarded to a women owned small business in open competition with other firms. The remaining $13.7 billion was awarded with another small business preference (e.g., set aside and sole source awards for small business generally and for HUBZone firms, 8(a) firms, and service-disabled veteran-owned small businesses). Other small businesses. Agencies may also set aside contracts or make sole-source awards to small businesses not participating in any other program under certain conditions. Other federal programs promote subcontracting with small disadvantaged businesses (SDBs). SDBs include 8(a) participants and other small businesses that are at least 51% unconditionally owned and controlled by socially or economically disadvantaged individuals or groups. Individuals owning and controlling non-8(a) SDBs may have net worth of up to $750,000 (excluding ownership interests in the SDB firm and equity in their primary personal residence). Otherwise, however, SDBs must generally satisfy the same eligibility requirements as 8(a) firms, although they do not apply to the SBA to be designated SDBs in the same way that 8(a) firms do. Federal agencies must negotiate "subcontracting plans" with the apparently successful bidder or offeror on eligible prime contracts prior to awarding the contract. Subcontracting plans set goals for the percentage of subcontract dollars to be awarded to SDBs, among others, and describe efforts that will be made to ensure that SDBs "have an equitable opportunity to compete for subcontracts." Federal agencies may also consider the extent of subcontracting with SDBs in determining to whom to award a contract or give contractors "monetary incentives" to subcontract with SDBs. As of March 25, 2019, the SBA's Dynamic Small Business Search database included 2,338 SBA-certified SDBs and 122,281 self-certified SDBs. The SBA's 7(j) Management and Technical Assistance program provides "a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities." Eligible individuals and businesses include "8(a) certified firms, small disadvantaged businesses, businesses operating in areas of high unemployment, or low income or firms owned by low income individuals." In FY2018, the 7(j) Management and Technical Assistance program assisted 6,483 small businesses. The SBA's Surety Bond Guarantee program is designed to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels. The program guarantees individual contracts of up to $6.5 million and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. The SBA's guarantee ranges from not to exceed 80% to not to exceed 90% of the surety's loss if a default occurs. In FY2018, the SBA guaranteed 10,800 bid and final surety bonds with a total contract value of nearly $6.5 billion. A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed. The surety bond reduces the risk associated with contracting. Surety bonds are viewed as a means to encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and are considered to be at greater risk of failing to comply with the contract's terms and conditions. Since 1978, federal agency heads have been required to establish federal procurement contracting goals, in consultation with the SBA, "that realistically reflect the potential of small business concerns" to participate in federal procurement. Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting these goals to the SBA. In 1988, Congress authorized the President to annually establish government-wide minimum participation goals for procurement contracts awarded to small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals. Congress required the government-wide minimum participation goal for small businesses to be "not less than 20% of the total value of all prime contract awards for each fiscal year" and "not less than 5% of the total value of all prime contract and subcontract awards for each fiscal year" for small businesses owned and controlled by socially and economically disadvantaged individuals. Each federal agency was also directed to "have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of contracts let by such agency." The SBA was required to report to the President annually on the attainment of these goals and to include this information in an annual report to Congress. The SBA negotiates the goals with each federal agency and establishes a "small business eligible" baseline for evaluating the agency's performance. The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated sources (i.e., nonappropriated funds), contracts not covered by Federal Acquisition Regulations, acquisitions on behalf of foreign governments, and contracts not reported in the Federal Procurement Data System (such as contracts valued below $10,000 and government procurement card purchases). These exclusions typically account for 18% to 20% of all federal prime contracts each year. The SBA then evaluates the agencies' performance against their negotiated goals annually, using data from the Federal Procurement Data System—Next Generation, managed by the U.S. General Services Administration, to generate the small business eligible baseline. This information is compiled into the official Small Business Goaling Report, which the SBA releases annually. Over the years, federal government-wide procurement contracting goals have been established for small businesses generally ( P.L. 100-656 , the Business Opportunity Development Reform Act of 1988, and P.L. 105-135 , the HUBZone Act of 1997—Title VI of the Small Business Reauthorization Act of 1997), small businesses owned and controlled by socially and economically disadvantaged individuals ( P.L. 100-656 , the Business Opportunity Development Reform Act of 1988), women ( P.L. 103-355 , the Federal Acquisition Streamlining Act of 1994), small businesses located within a HUBZone ( P.L. 105-135 , the HUBZone Act of 1997—Title VI of the Small Business Reauthorization Act of 1997), and small businesses owned and controlled by a service disabled veteran ( P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999). The current federal small business contracting goals are at least 23% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year, 5% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses for each fiscal year, 5% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses, 3% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses, and 3% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses. Although there are no punitive consequences for not meeting the small business procurement goals, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and serves to heighten public awareness of the issue of small business contracting. For example, agency performance as reported in the SBA's Small Business Goaling Report is often cited by Members during their questioning of federal agency witnesses during congressional hearings. As shown in Table 6 , the FY201 7 Small Business Goaling Report , using data in the Federal Procurement Data System, indicates that federal agencies met the federal contracting goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017. Federal agencies awarded 23.88% of the value of their small business eligible contracts ($442.5 billion) to small businesses ($105.7 billion), 9.10% to small disadvantaged businesses ($40.2 billion), 4.71% to women-owned small businesses ($20.8 billion), 1.65% to HUBZone small businesses ($7.3 billion), and 4.05% to service-disabled veteran-owned small businesses ($17.9 billion). The percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017 is also provided in the table for comparative purposes. Government agencies with procurement authority have an Office of Small and Disadvantaged Business Utilization (OSDBU) to advocate within the agency for small businesses, as well as assist small businesses in their dealings with federal agencies (e.g., obtaining payment). As mentioned previously, the SBA provides funding to third parties, such as SBDCs, to provide management and training services to small business owners and aspiring entrepreneurs. The SBA also provides management, training, and outreach services to small business owners and aspiring entrepreneurs through its 68 district offices. These offices are overseen by the SBA Office of Field Operations and 10 regional offices. SBA district offices conduct more than 20,000 outreach events annually with stakeholders and resource partners that include "lender training, government contracting, marketing events in emerging areas, and events targeted to high-growth entrepreneurial markets, such as exporting." SBA district offices focus "on core SBA programs concerning contracting, capital, technical assistance, and exporting." They also perform annual program eligibility and compliance reviews on 100% of the 8(a) business development firms in the SBA's portfolio and each year conduct on-site examinations of about 10% of all HUBZone certified firms (529 in FY2018) to validate compliance with the HUBZone program's geographic requirement for principal offices. The Office of Inspector General's (OIG's) mission is "to improve SBA management and effectiveness, and to detect and deter fraud in the Agency's programs." It serves as "an independent and objective oversight office created within the SBA by the Inspector General Act of 1978 [P.L. 95-452], as amended." The Inspector General, who is nominated by the President and confirmed by the Senate, directs the office. The Inspector General Act provides the OIG with the following responsibilities: "promote economy, efficiency, and effectiveness in the management of SBA programs and supporting operations; conduct and supervise audits, investigations, and reviews relating to the SBA's programs and support operations; detect and prevent fraud, waste and abuse; review existing and proposed legislation and regulations and make appropriate recommendations; maintain effective working relationships with other Federal, State and local governmental agencies, and nongovernmental entities, regarding the mandated duties of the Inspector General; keep the SBA Administrator and Congress informed of serious problems and recommend corrective actions and implementation measures; comply with the audit standards of the Comptroller General; avoid duplication of Government Accountability Office (GAO) activities; and report violations of Federal criminal law to the Attorney General." The SBA has several programs to improve small business access to capital markets, including the Small Business Investment Company program, the New Market Venture Capital Program (now inactive), two special high technology contracting programs (the Small Business Innovative Research and Small Business Technology Transfer programs), and the growth accelerators initiative. The Small Business Investment Company (SBIC) program enhances small business access to venture capital by stimulating and supplementing "the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply." The SBA works with 305 privately owned and managed SBICs licensed by the SBA to provide financing to small businesses with private capital the SBIC has raised and with funds the SBIC borrows at favorable rates because the SBA guarantees the debenture (loan obligation). SBICs provide equity capital to small businesses in various ways, including by purchasing small business equity securities (e.g., stock, stock options, warrants, limited partnership interests, membership interests in a limited liability company, or joint venture interests); making loans to small businesses, either independently or in cooperation with other private or public lenders, that have a maturity of no more than 20 years; purchasing debt securities from small businesses, which may be convertible into, or have rights to purchase, equity in the small business; and subject to limitations, providing small businesses a guarantee of their monetary obligations to creditors not associated with the SBIC. The SBIC program currently has invested or committed about $30.1 billion in small businesses, with the SBA's share of capital at risk about $14.3 billion. In FY2018, the SBA committed to guarantee $2.52 billion in SBIC small business investments. SBICs invested another $2.98 billion from private capital for a total of $5.50 billion in financing for 1,151 small businesses. The now inactive New Market Venture Capital (NMVC) program encourages equity investments in small businesses in low-income areas that meet specific statistical criteria established by regulation. The program operates through public-private partnerships between the SBA and newly formed NMVC investment companies and existing Specialized Small Business Investment Companies (SSBICs) that operate under the Small Business Investment Company program. The NMVC program's objective is to serve the unmet equity needs of local entrepreneurs in low-income areas by providing developmental venture capital investments and technical assistance, helping to create quality employment opportunities for low-income area residents, and building wealth within those areas. The SBA's role is essentially the same as with the SBIC program. The SBA selects participants for the NMVC program, provides funding for their investments and operational assistance activities, and regulates their operations to ensure public policy objectives are being met. The SBA requires the companies to provide regular performance reports and have annual financial examinations by the SBA. The NMVC program was appropriated $21.952 million in FY2001 to support up to $150 million in SBA-guaranteed debentures and $30 million to fund operational assistance grants for FY2001 through FY2006. The funds were provided in a lump sum in FY2001 and were to remain available until expended. In 2003, the unobligated balances of $10.5 million for the NMVC debenture subsidies and $13.75 million for operational assistance grants were rescinded. The program continued to operate, with the number and amount of financing declining as the program's initial investments expired and NMVC companies increasingly engaged only in additional follow-on financings with the small businesses in their portfolios. The NMVC program's active unpaid principal balance (which is composed of the SBA guaranteed portion and the unguaranteed portion of the NMVC companies' active unpaid principal balance) peaked at $698 million in FY2008, and then fell each year thereafter until reaching $0 in FY2018. The Small Business Innovation Research (SBIR) program is designed to increase the participation of small, high technology firms in federal research and development (R&D) endeavors, provide additional opportunities for the involvement of minority and disadvantaged individuals in the R&D process, and result in the expanded commercialization of the results of federally funded R&D. Current law requires that every federal department with an R&D budget of $100 million or more establish and operate a SBIR program. Currently, 11 federal agencies participate in the SBIR program. A set percentage of that agency's applicable extramural R&D budget—originally set at not less than 0.2% in FY1983 and currently not less than 3.2%—is to be used to support mission-related work in small businesses. Agency SBIR efforts involve a three-phase process. During Phase I, awards of up to $163,952 for six months are made to evaluate a concept's scientific or technical merit and feasibility. The project must be of interest to and coincide with the mission of the supporting organization. Projects that demonstrate potential after the initial endeavor may compete for Phase II awards of up to $1.09 million, lasting one to two years. Phase II awards are for the performance of the principal R&D by the small business. Phase III funding, directed at the commercialization of the product or process, is expected to be generated in the private sector. Federal dollars may be used if the government perceives that the final technology or technique will meet public needs. Eight departments and three other federal agencies currently have SBIR programs, including the Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, and Transportation; the Environmental Protection Agency; the National Aeronautics and Space Administration (NASA); and the National Science Foundation (NSF). Each agency's SBIR activity reflects that organization's management style. Individual departments select R&D interests, administer program operations, and control financial support. Funding can be disbursed in the form of contracts, grants, or cooperative agreements. Separate agency solicitations are issued at established times. The SBA is responsible for establishing the broad policy and guidelines under which individual departments operate their SBIR programs. The SBA monitors and reports to Congress on the conduct of the separate departmental activities. The Small Business Technology Transfer program (STTR) provides funding for research proposals that are developed and executed cooperatively between a small firm and a scientist in a nonprofit research organization and meet the mission requirements of the federal funding agency. Up to $163,952 in Phase I financing is available for approximately one year to fund the exploration of the scientific, technical, and commercial feasibility of an idea or technology. Phase II awards of up to $1.09 million may be made for two years, during which time the developer performs R&D work and begins to consider commercial potential. Agencies may issue an award exceeding these award guidelines by no more than 50%. Only Phase I award winners are considered for Phase II. Phase III funding, directed at the commercialization of the product or process, is expected to be generated in the private sector. The small business must find funding in the private sector or other non-STTR federal agency. The STTR program is funded by a set-aside, initially set at not less than 0.05% in FY1994 and now at not less than 0.45%, of the extramural R&D budget of departments that spend more than $1 billion per year on this effort. The Departments of Energy, Defense, and Health and Human Services participate in the STTR program, as do NASA and NSF. The SBA is responsible for establishing the broad policy and guidelines under which individual departments operate their STTR programs. The SBA monitors and reports to Congress on the conduct of the separate departmental activities. The SBA describes growth accelerators as "organizations that help entrepreneurs start and scale their businesses." Growth accelerators are typically run by experienced entrepreneurs and help small businesses access seed capital and mentors. The SBA claims that growth accelerators "help accelerate a startup company's path towards success with targeted advice on revenue growth, job, and sourcing outside funding." The SBA's Growth Accelerator Initiative began in FY2014 when Congress recommended in its appropriations report that the initiative be provided $2.5 million. Congress subsequently recommended that it receive $4 million in FY2015, $1 million in FY2016, FY2017, and FY2018, and $2 million in FY2019. The Growth Accelerator Initiative provides $50,000 matching grants each year to universities and private sector accelerators "to support the development of accelerators and their support of startups in parts of the country where there are fewer conventional sources of access to capital (i.e., venture capital and other investors)." The SBA's Office of Advocacy is "an independent voice for small business within the federal government." The Chief Counsel for Advocacy, who is nominated by the President and confirmed by the Senate, directs the office. The Office of Advocacy's mission is to "encourage policies that support the development and growth of American small businesses" by intervening early in federal agencies' regulatory development process on proposals that affect small businesses and providing Regulatory Flexibility Act compliance training to federal agency policymakers and regulatory development officials; producing research to inform policymakers and other stakeholders on the impact of federal regulatory burdens on small businesses, to document the vital role of small businesses in the economy, and to explore and explain the wide variety of issues of concern to the small business community; and fostering a two-way communication between federal agencies and the small business community. The SBA's executive direction programs consist of the National Women's Business Council, the Office of Ombudsman, and Faith-Based Initiatives. The National Women's Business Council is a bipartisan federal advisory council created to serve as an independent source of advice and counsel to the President, Congress, and the SBA on economic issues of importance to women business owners. The council's mission "is to promote bold initiatives, policies, and programs designed to support women's business enterprises at all stages of development in the public and private sector marketplaces—from start-up to success to significance." The National Ombudsman's mission "is to assist small businesses when they experience excessive or unfair federal regulatory enforcement actions, such as repetitive audits or investigations, excessive fines, penalties, threats, retaliation or other unfair enforcement action by a federal agency." The Office of Ombudsman works with federal agencies that have regulatory authority over small businesses to provide a means for entrepreneurs to comment about enforcement activities and encourage agencies to address those concerns promptly. It also receives comments from small businesses about unfair federal compliance or enforcement activities and refers those comments to the Inspector General of the affected agency in appropriate circumstances. In addition, the National Ombudsman files an annual report with Congress and affected federal agencies that rates federal agencies based on substantiated comments received from small business owners. Affected agencies are provided an opportunity to comment on the draft version of the annual report to Congress before it is submitted. The SBA sponsors several faith-based initiatives For example, the SBA, in cooperation with the National Association of Government Guaranteed Lenders (NAGGL), created the Business Smart Toolkit, "a ready-to-use workshop toolkit that equips faith-based and community organizations to help new and aspiring entrepreneurs launch and build businesses that are credit ready." During the 111 th Congress P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA) provided the SBA an additional $730 million in temporary funding, including $375 million to subsidize fees for the SBA's 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's maximum loan guaranty percentage to 90% for all regular 7(a) loans through September 30, 2010, or when appropriated funding for the subsidies and loan modification was exhausted. P.L. 111-240 , the Small Business Jobs Act of 2010, authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to encourage community banks with less than $10 billion in assets to increase their lending to small businesses (about $4.0 billion was issued) and a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs. The act also provided the SBA an additional $697.5 million; including $510 million to continue the SBA's fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through December 31, 2010, and about $12 billion in tax relief for small businesses. P.L. 111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue its fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011. During the 112 th Congress, the SBA's statutory authorization expired (on July 31, 2011). Since then, the SBA has been operating under authority provided by annual appropriations acts. Prior to July 31, 2011, the SBA's authorization had been temporarily extended 15 times since 2006. P.L. 112-239 , the National Defense Authorization Act for Fiscal Year 2013, increased the SBA's surety bond limit from $2 million to $6.5 million (and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary); required the SBA to oversee and establish standards for most federal mentor-protégé programs and establish a mentor-protégé program for all small business concerns; required the SBA's Chief Counsel for Advocacy to enter into a contract with an appropriate entity to conduct an independent assessment of the small business procurement goals, including an assessment of which contracts should be subject to the goals; and addressed the SBA's recent practice of combining size standards within industrial groups as a means to reduce the complexity of its size standards by requiring the SBA to make available a justification when establishing or approving a size standard that the size standard is appropriate for each individual industry classification. During the 113 th Congress, P.L. 113-76 , the Consolidated Appropriations Act, 2014, increased the SBA's SBIC program's annual authorization amount to $4 billion from $3 billion. During the 114 th Congress P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, authorized and made permanent the SBA's administrative decision to waive the SBAExpress loan program's one time, up-front loan guaranty fee for veterans (and their spouse). The act also increased the 7(a) loan program's FY2015 authorization limit from $18.75 billion to $23.5 billion (later increased to $26.5 billion). P.L. 114-88 , the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE After Disaster Act of 2015), includes several provisions designed to assist individuals and small businesses affected by Hurricane Sandy in 2012, and, among other things, authorizes the SBA to provide up to two years of additional financial assistance, on a competitive basis, to SBDCs, WBCs, SCORE, or any proposed consortium of such individuals or entities to assist small businesses located in a presidentially declared major disaster area; authorizes SBDCs to provide assistance to small businesses outside the SBDC's state, without regard to geographical proximity to the SBDC, if the small business is in a presidentially declared major disaster area; and temporarily increases, for three years, the minimum disaster loan amount for which the SBA may require collateral, from $14,000 to $25,000 (or, as under existing law, any higher amount the SBA determines appropriate in the event of a disaster). P.L. 114-92 , the National Defense Authorization Act for Fiscal Year 2016, includes a provision that expands the definition of a Base Realignment and Closure Act (BRAC) military base closure area under the HUBZone program to include the lands within the external boundaries of the closed base and the census tract or nonmetropolitan county in which the lands of the closed base are wholly contained, intersect it, or are contiguous to it. This change is designed to make it easier for businesses located in those areas to meet the HUBZone program's requirement that at least 35% of its employees reside in a HUBZone area. The act also extends BRAC base closure area HUBZone eligibility from five years to not less than eight years, provides HUBZone eligibility to qualified disaster areas, and adds Native Hawaiian Organizations to the list of HUBZone eligible small business concerns. Starting one year from enactment (effective November 25, 2016), the act also adds requirements concerning the pledge of assets by individual sureties participating in the SBA's Surety Bond Guarantee Program and increases the guaranty rate from not less than 70% to not less than 90% for preferred sureties participating in that program. P.L. 114-113 , the Consolidated Appropriations Act, 2016, expands the projects eligible for refinancing under the 504/CDC loan guaranty program in any fiscal year in which the refinancing program and the 504/CDC program as a whole do not have credit subsidy costs, generally limits refinancing under this provision to no more than 50% of the dollars loaned under the 504/CDC program during the previous fiscal year, and increases the SBIC program's family of funds limit (the amount of outstanding leverage allowed for two or more SBIC licenses under common control) to $350 million from $225 million. The act also provided the 7(a) loan program a FY2016 authorization limit of $26.5 billion. P.L. 114-125 , the Trade Facilitation and Trade Enforcement Act of 2015, renamed the "State Trade and Export Promotion" grant initiative to the "State Trade Expansion Program." P.L. 114-125 also reformed some of the program's procedures and provided $30 million in annual authorization for STEP grants from FY2016 through FY2020. In terms of program administration, P.L. 114-125 allows the SBA's Associate Administrator (AA) for International Trade to give priority to STEP proposals from states that have a relatively small share of small businesses that export or would assist rural, women-owned, and socially and economically disadvantaged small businesses and small business concerns. P.L. 114-328 , the National Defense Authorization Act for Fiscal Year 2017, authorizes the SBA to establish different size standards for various types of agricultural enterprises (previously statutorily set at not more than $750,000 in annual receipts), standardizes definitions used by the SBA and the Department of Veterans Affairs concerning service-disabled veteran owned small businesses, requires the SBA to track companies that outgrow or no longer qualify for SBA assistance due to the receipt of a federal contract or being purchased by another entity after an initial federal contract is awarded, and, among other provisions, clarifies the duties of the Offices of Small and Disadvantaged Utilization within federal agencies. During the 115 th Congress P.L. 115-31 , the Consolidated Appropriations Act, 2017, increased the 7(a) program's authorization limit to $27.5 billion in FY2017 from $26.5 billion in FY2016. P.L. 115-56 , the Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017, provided the SBA an additional $450 million for disaster assistance. P.L. 115-123 , the Bipartisan Budget Act of 2018, provided the SBA an additional $1.652 billion for disaster assistance and $7.0 million to the SBA's OIG for disaster assistance oversight. P.L. 115-141 , the Consolidated Appropriations Act, 2018, increased the 7(a) program's authorization limit to $29.0 billion in FY2018. The act also relaxed requirements on Microloan intermediaries that prohibited them from spending more than 25% of their technical assistance grant funds on prospective borrowers and more than 25% of those grant funds on contracts with third parties to provide that technical assistance by increasing those percentages to 50%. P.L. 115-189 , the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit. The SBA is required to provide at least 30 days' notice of its intent to exceed the 7(a) loan program's authorization limit to the House and Senate Committees on Small Business and the House and Senate Committees on Appropriations' Subcommittees on Financial Services and General Government and may exercise this option only once per fiscal year. P.L. 115-232 , the John S. McCain National Defense Authorization Act for Fiscal Year 2019, included provisions originally in H.R. 5236 , the Main Street Employee Ownership Act of 2018, to make 7(a) loans more accessible to employee-owned small businesses (ESOPs) and cooperatives. The act clarifies that 7(a) loans to ESOPs may be made under the Preferred Lenders Program; allows the seller to remain involved as an officer, director, or key employee when the ESOP or cooperative has acquired 100% ownership of the small business; and authorizes the SBA to finance transition costs to employee ownership and waive any mandatory equity injection by the ESOP or cooperative to help finance the change of ownership. The act also directs the SBA to create outreach programs and an interagency working group to promote lending to ESOPs and cooperatives. During the 116 th Congress P.L. 116-6 , the Consolidated Appropriations Act, 2019, increased the 7(a) program's authorization limit to $30.0 billion in FY2019. The SBA's received an appropriation of $887.604 million for FY2015, $871.042 million for FY2016, $1.337 billion for FY2017, $2.360 billion for FY2018, and $715.370 million for FY2019. As shown in Table 8 , the SBA's FY2019 appropriation of $715.37 million includes $267.50 million for salaries and expenses, $247.70 million for entrepreneurial development and noncredit programs, $155.15 million for business loan administration, $4.0 million for business loan credit subsidies (for the Microloan program), $21.9 million for Office of Inspector General, $9.12 million for the Office of Advocacy, and $10.0 million for disaster assistance.
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The Small Business Administration (SBA) administers several types of programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. Congressional interest in the SBA's loan, venture capital, training, and contracting programs has increased in recent years, primarily because small businesses are viewed as a means to stimulate economic activity and create jobs. Many Members of Congress also regularly receive constituent inquiries about the SBA's programs. This report provides an overview of the SBA's programs, including entrepreneurial development programs (including Small Business Development Centers, Women's Business Centers, SCORE, and Microloan Technical Assistance); disaster assistance; capital access programs (including the 7(a) loan guaranty program, the 504/Certified Development Company loan guaranty program, the Microloan program, International Trade and Export Promotion programs, and lender oversight); contracting programs (including the 8(a) Minority Small Business and Capital Ownership Development Program, the Historically Underutilized Business Zones [HUBZones] program, the Service-Disabled Veteran-Owned Small Business Program, the Women-Owned Small Business [WOSB] Federal Contract Program, and the Surety Bond Guarantee Program); SBA regional and district offices; the Office of Inspector General; the Office of Advocacy; and capital investment programs (including the Small Business Investment Company program, the New Markets Venture Capital program, the Small Business Innovation Research [SBIR] program, the Small Business Technology Transfer program [STTR], and growth accelerators). The report also discusses recent programmatic changes resulting from the enactment of legislation (such as P.L. 111-5, the American Recovery and Reinvestment Act of 2009, P.L. 111-240, the Small Business Jobs Act of 2010, P.L. 114-38, the Veterans Entrepreneurship Act of 2015, P.L. 114-88, the Recovery Improvements for Small Entities After Disaster Act of 2015 [RISE After Disaster Act of 2015], P.L. 115-123, the Bipartisan Budget Act of 2018, and P.L. 115-189, the Small Business 7(a) Lending Oversight Reform Act of 2018). In addition, it provides an overview of the SBA's budget and references other CRS reports that examine these programs in greater detail.
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The Robert T. Stafford Disaster Relief and Emergency Assistance Act ( P.L. 93-288 , hereinafter the Stafford Act) authorizes the President to issue a major disaster declaration in response to natural or man-made incidents that overwhelm state, local, or tribal capacities. The declaration makes a wide range of federal activities available to support state and local efforts to respond and recover from the incident. Major disaster declarations also authorize the Federal Emergency Management Agency (FEMA) to provide grant assistance to state, local, and tribal governments, residences, and certain private nonprofit (PNP) facilities that provide critical services. Businesses that suffer uninsured loss as a result of a major disaster declaration are not eligible for FEMA grant assistance, and grant assistance from other federal sources is limited. On some occasions, Congress has provided assistance to businesses through the Community Development Block Grant (CDBG) program. The CDBG program provides loans and grants to eligible businesses to help them recover from disasters as well as grants intended to attract new businesses to the disaster-stricken area. In a few cases, CDBG has also been used to compensate businesses and workers for lost wages or revenues. CDBG assistance, however, is not available for all major disasters. Rather, it is used by Congress on a case-by-case basis in response to large-scale disasters. The United States Department of Agriculture and the Department of Commerce are also authorized to provide assistance to certain types of businesses such as agricultural producers or fisheries. While these programs are important sources of assistance following a disaster, they are generally limited in scope (available for only certain types of businesses) or provide limited grant amounts. Most businesses will need to apply for a Small Business Administration (SBA) disaster loan if they want assistance from the federal government for uninsured loss resulting from a disaster. SBA is authorized to provide grants to SBA resource partners, including Small Business Development Centers, Women's Business Centers, and SCORE (formerly the Service Corps of Retired Executives), to provide training and other technical assistance to small businesses affected by a disaster, but is not authorized to provide direct grant assistance to businesses. As indicated above, federal assistance to businesses that suffer uninsured loss as a result of a disaster is mainly limited to SBA disaster loans. Disaster loans address certain types of loss and fall into two categories: (1) Business Physical Disaster Loans, and (2) Economic Injury Disaster Loans (EIDL). If Congress were to replace SBA business disaster loans with a grant program, it might consider providing grants for similar types of loss. Alternatively, Congress might implement a small business disaster grant program and continue to provide loan assistance through the SBA. If that is the case, it might consider how the small business disaster grant program would complement the existing loan program. The following sections describe SBA business disaster loans in more detail. Business Physical Disaster Loans are available to almost any business located in a declared disaster area. Business Physical Disaster Loans provide businesses up to $2 million to repair or replace damaged physical property including machinery, equipment, fixtures, inventory, and leasehold improvements that are not covered by insurance. Damaged vehicles normally used for recreational purposes may be repaired or replaced with SBA loan proceeds if the borrower can submit evidence that the vehicles were used for business purposes. Businesses may also apply up to 20% of the verified loss amount for mitigation measures (e.g., grading or contouring of land, relocating or elevating utilities or mechanical equipment, building retaining walls, safe rooms or similar structures designed to protect occupants from natural disasters, or installing sewer backflow valves) in an effort to prevent loss should a similar disaster occur in the future. Interest rates for Business Physical Disaster Loans cannot exceed 8% per annum or 4% per annum if the business cannot obtain credit elsewhere. Borrowers generally pay equal monthly installments of principal and interest starting five months from the date of the loan. Business Physical Disaster Loans can have maturities up to 30 years. EIDLs are available to businesses located in a declared disaster area, that have suffered substantial economic injury, are unable to obtain credit elsewhere, and are defined as small by SBA size regulations. Size standards vary according to many factors including industry type, average firm size, and start-up costs and entry barriers. Small agricultural cooperatives and most private and nonprofit organizations that have suffered substantial economic injury as the result of a declared disaster are also eligible for EIDLs. Businesses can secure both an EIDL and a Business Physical Disaster loan to rebuild, repair, and recover from economic loss. The combined loan amount cannot exceed $2 million. Interest rate ceilings are statutorily set at 4% per annum or less and loans can have maturities up to 30 years. The following sections outline some of the arguments for and against implementing a business disaster grant program including the rationale for keeping the current federal business disaster policy the same. Throughout the years, Congress has expressed interest and concern for businesses recovering from disasters. More recently, Congress has contemplated whether grants should be made available to small businesses after major disasters. Advocates of a small business disaster grant program might argue that providing grants would address three areas of congressional concern: (1) equity, (2) small business vulnerability to disasters, and (3) protecting the economy. Over the years some have questioned why residences, nonprofit groups, and state and local governments are eligible for disaster grants but not small businesses. Some view the policy as being unfair to businesses. Providing disaster grants to businesses, they argue, would remove this disparity and make federal disaster policy more equitable and uniform across all sectors. Opponents of providing small business disaster grants might object to the equity argument by pointing out that businesses benefit indirectly from grants provided to state, local, and tribal governments. For instance, repairing and replacing damaged roads and bridges, debris removal, and utility restoration are commonly needed for successful business operations. It is notable too that FEMA reimburses state and local governments for debris removal—even on commercial property. Small business disaster grant advocates could also argue that studies suggest that small businesses are particularly vulnerable to disasters and many fail to fully recover. While reports vary on the number of small businesses that fail after a disaster, even the low estimates could be considered significant. According to FEMA, "roughly 40-60% of small businesses fail to reopen following a disaster." The Institute for Business and Home Safety found that 25% of businesses that close following a disaster never reopen. Businesses that do recover often take a long time to resume operations. A study on businesses in New Orleans recovering from Hurricane Katrina found that 12% of businesses remained closed 26 months after the storm. The same study indicated that smaller businesses had lower reopening probabilities than larger ones. And while SBA provides low-interest disaster loans with loan maturities up to 30 years for uninsured loss, some see a 30-year loan as an additional burden to full recovery. Finally, proponents argue that the need to recover and reopen quickly is not only important to small businesses—it is also important to local governments because they rely on these businesses for tax revenue. Congress could use small business disaster grants to help vulnerable businesses recover and rebuild following a disaster. Advocates could also argue that grant assistance could help counteract negative economic outcomes associated with disasters by helping businesses keep people employed and recover from economic loss. When major disasters take place, they not only cause immense damage to public infrastructure, they also severely damage the stock of private capital and disrupt economic activity. The typical economic pattern following large-scale disasters consists of large immediate losses of output, income, and employment. Small businesses play a significant role in the national economy. For example, in 2013, small businesses employed 56.8 million people (48% of the private workforce) in the United States. These small firms accounted for 33.6% of the nation's total known export value and produced roughly 46% of the nation's nonfarm gross domestic product (GDP). Opponents of a small business disaster grant program could point out, however, that studies suggest that market mechanisms may restore economic order without grant assistance. According to these studies, the long-term economic benefits of rebuilding from a major disaster can offset their initial economic disruption. For example, research on Hurricane Sandy recovery found that the storm initially resulted in net negative effects on state GDP, employment, income, and tax revenues. According to the study, spending on large-scale cleanup and repair efforts not only offset, but exceeded the initial economic negative effects. Opponents would argue there are three main reasons why disaster grants should not be provided to small businesses: (1) it might encourage businesses to become underinsured for disasters, (2) it would be costly, and (3) the Stafford Act is an inappropriate means to provide disaster grants to businesses. Opponents could argue that small businesses are responsible for obtaining adequate insurance coverage to recover from a disaster. To them, providing grants to small businesses could create an incentive for them to be underinsured (or not obtain insurance) to cut costs. Advocates for small business disaster grants might counter argue that other sectors are also responsible for insurance coverage yet are still eligible for grant assistance. Opponents could also argue that providing disaster grants to small businesses could be very expensive. SBA disaster loans are designed to be repaid, and though the interest rates are relatively low and some of these loans are not repaid due to defaults, the cost to the federal government for providing loans is much less than the cost of providing grants. Grants are not repaid to the federal government. As discussed later in this report, opponents might consider the Stafford Act to be an inappropriate vehicle for providing disaster assistance to businesses. To support this argument, they would point out that Section 101(b) of the Stafford Act states that it "is the intent of the Congress, by this Act, to provide an orderly and continuing means of assistance by the federal government to state and local governments in carrying out their responsibilities to alleviate the suffering and damage which result from such disasters...." They may therefore conclude that if the federal government were to provide disaster grants to businesses, those grants should be provided under the Small Business Act or some other authorization statute. Elements of the arguments for and against small business disaster grants outlined above will be explored in greater detail in " Policy Considerations and Options for Congress ." Some question why the federal government provides grant assistance to individuals and households, state, local, and tribal governments, and nonprofit organizations, among others, but not to businesses. A review of congressional hearings, bill reports, agency reports, academic journals, and other authoritative sources did not identify specific language explaining why Congress distinguishes between the types of disaster assistance that should be provided to businesses while not applying the same restrictions to other sectors. It appears that current federal policy on business disaster assistance first emerged in the 1930s. At that time, the United States had no overarching federal disaster policy or permanent program in place to respond to major disasters. Response, repair, and recovery activities were generally organized and carried out under local auspices and financial assistance was typically provided by states, municipalities, churches, and other nonprofit organizations such as the American Red Cross and the Salvation Army. When Congress did provide financial assistance, it was generally on an ad hoc basis. Further, Congress wanted the measures limited to relieving "human distress and for such things as food, clothing, shelter, medicine and hospitalization" rather the reconstruction of buildings, businesses, or anything else. The Great Depression also heightened concerns about federal costs. Thus, Congress sought to keep federal costs to a minimum by limiting assistance to individuals and households, and, to the extent possible, returning the federal expenditures back to the Treasury. For example, in 1933, Congress debated whether to provide funding to the American Red Cross (the main source of disaster assistance at that time) in response to an earthquake in Long Beach California. The Red Cross sought the funding because it could not meet assistance needs through its traditional fundraising efforts. Businesses, which were already struggling because of the Great Depression, suffered a great deal of damage as a result of the incident. While sympathetic to struggling businesses, Congress was resolute that federal assistance for the earthquake be limited to immediate needs such as food and clothing. During a hearing before the Subcommittee of House Committee on Appropriations, the Vice Chairman in charge of Domestic Operations for the American Red Cross clarified that Red Cross did not have a role in business recovery: There will always arise the question as to business rehabilitation, businesses and factories that have been affected. Then, there is the question of the solvency or insolvency of public corporations, schools, school boards, and so forth, and the replacement of their losses. For that reason I made the statement at the outset delimiting the scope of Red Cross work to family problems as against those of business and government. Congress decided that it would make disaster loans available to nonprofit organizations with loan maturities not to exceed 10 years through the Reconstruction Finance Corporation (RFC). The restriction that limited loans to nonprofit organizations was removed in 1936, and RFC was "authorized to make disaster loans to corporations, partnerships, individuals, and municipalities or other political subdivisions of states and territories." The RFC continued to make disaster loans available until Congress dissolved the RFC and transferred its disaster loan authority to SBA in 1953 (P.L. 83-163). Around the same time, Congress passed the Federal Disaster Relief Act of 1950 (P.L. 81-875). The Disaster Relief Act established a permanent authority that committed the federal government to provide specific types of assistance to states and localities (but not businesses) following a major disaster declaration. It appears that the creation of a separate authority to provide assistance to states and localities may have placed them on a separate policy trajectory from businesses. Though interlaced to a degree, assistance to businesses remained in the form of loans, while the scope and nature of federal assistance to other entities expanded as the Disaster Relief Act was amended in the 1960s, 1970s, and replaced in the 1980s by the Stafford Act. The long-standing policy of providing disaster loans for businesses instead of grants has been reexamined by Congress in the last decade. In recent Congresses, legislation has been introduced that would establish business disaster grant programs. These legislative attempts include: (1) the Small Business Owner Disaster Relief Act of 2008 (H.R. 6641) in the 110 th Congress, and (2) the Hurricane Harvey Small Business Recovery Grants Act (H.R. 3930) in the 115 th Congress. H.R. 6641 would have amended Section 406(a) of the Stafford Act to allow businesses with 25 or fewer employees to receive grants to repair, restore, or replace damaged facilities. The assistance was limited to $28,000—the maximum amount of assistance a family could receive at that time under Section 408 of the Stafford Act (FEMA's Individuals and Households program). H.R. 6641 was referred to the Committee on Transportation and Infrastructure, Subcommittee on Economic Development, Public Buildings and Emergency Management on July 30, 2008. A hearing on H.R. 6641 provided an opportunity for some to voice their concern over the perceived disparity in disaster assistance. For example, in his testimony before the Subcommittee, Representative Steve King of Iowa stated that "we have structured ... federal government relief in grant form for every sector of our economy ... except for private enterprise, and the ones that are the most vulnerable are small businesses." Later in the hearing, Chairwoman Eleanor Holmes Norton of Washington, DC, asked: "how are we to convince for the first time since the Stafford Act was passed ... [that] Congress faced with an extraordinary deficit that this is the time to start giving what amounts to money to private enterprises?" To which Representative King stated: "we have justified providing relief for not-for-profits, even some churches who qualify ... and every political subdivision—city, county, state, and of course federal." In addition to voicing concerns about the equity of disaster assistance, the hearing also highlighted some of the challenges businesses face when recovering from a disaster, including a lack of capital, revenue gaps, and a weakened ability to generate revenue. It is possible that some of the programmatic concerns would have been addressed had the bill continued to advance in the legislative process, but the measure saw no further legislative action. H.R. 3930 in the 115 th Congress would have established a temporary "Office of Hurricane Harvey Small Business Grants" in the SBA to provide grants to businesses that suffered substantial economic injury as a result of Hurricane Harvey. H.R. 3930 would have authorized grants up to $100,000; the SBA Administrator, however, could increase that amount to $250,000 if deemed appropriate. Businesses could use the grants for a wide-range of recovery activities including uninsured property loss, damages or destruction of physical infrastructure, overhead costs, employee wages for unperformed work, temporary relocation, and debris removal. The grants could also be used for insurance deductibles, but not to repay government loans. H.R. 3930 was introduced in the House of Representatives, but saw no further legislative action. Implementing a small business disaster grant program may address congressional concerns about disaster relief equity, protecting the economy and vulnerable businesses. A business grant program, however, could have some unintended policy consequences. Some of the considerations Congress may contemplate for a potential small business disaster grant program include: (1) preventing the duplication of administrative functions and benefits; (2) the selection of the authorization statute; (3) whether (and what type of) declarations and designations will put the disaster grant program into effect; (4) what size businesses should be eligible for disaster grant assistance; and (5) the types of activities eligible for grant assistance. In addition, Congress could explore alternative options to a small business disaster grant program that could also address business disaster recovery concerns including (1) loan forgiveness; (2) reduced interest rates; and (3) measures that could help small (and large) businesses develop continuity and disaster recovery plans to help them prepare for and recover from disasters. Preventing duplication of administrative functions and benefits would likely be of concern if Congress authorized a small business disaster grant program. Duplication of administrative functions occurs when an office or staff at two or more federal entities performs the same types of operations. This type of duplication might be addressed through program consolidation. In the context of disaster assistance, duplication of benefits occurs when compensation from multiple sources exceeds the need for a particular recovery purpose. To prevent duplication of administrative functions Congress could opt to authorize the implementation of a new small business disaster grant program by either SBA or FEMA, but not both. The selection and authorization debate could, to some extent, resemble policy discussions Congress had during FEMA's formation. In 1978, President Jimmy Carter signed Executive Order 12127 which merged many disaster-related responsibilities of separate federal agencies into FEMA. Congress determined that SBA would continue to provide disaster loans through the Disaster Loan Program rather than transfer that function to FEMA. At the 1978 hearing before a subcommittee of the Committee on Government Operations, Chairman Jack Brooks questioned the rationale for keeping the loan program outside of FEMA. According to James T. McIntyre, Director, Office of Management and Budget (OMB), the rationale was as follows: [O]ne of the fundamental principles underlying this proposal is that whenever possible emergency responsibilities should be an extension of the regular missions of federal agencies. I believe the Congress also subscribed to this principle in considering disaster legislation in the past. The Disaster Relief Act of 1974 provides for the direction and coordination, in disaster situations, of agencies which have programs which can be applied to meeting disaster needs. It does not provide that the coordinating agency should exercise direct operational control.... [I]f the programs ... were incorporated in the new agency we would be required to create duplicate sets of skills and resources.... [S]ince the Small Business Administration administers loan programs other than those just for disaster victims, both the SBA and the new agency [FEMA] would have to maintain separate staffs of loan officers and portfolio managers if the disaster loan function were transferred to the new Agency.... [O]ne of our basic purposes for reorganization ... would be thwarted if we were to have to maintain a duplicate staff function in two or more agencies. Similarly, Congress may consider whether issuing small business disaster grants either through FEMA or SBA would duplicate skills and resources in one or the other agency. Congress could examine existing administrative functions at each agency and determine which most closely aligns with a potential small business disaster grant program. In addition to duplication of administrative functions, duplication of benefits is more likely to occur as more recovery resources become available. The range of resources can include insurance payouts, state and local government assistance, charitable donations from private institutions and individuals, as well as certain forms of federal assistance. While SBA disaster loans must be repaid, they are still considered a benefit. Duplication of benefits sometimes happens at the individual and household level wherein a range of resources become available to assist in the response, recovery, and rebuilding process. It could be inferred that providing businesses with disaster loans and grants could lead to the same outcome. Instances of duplication could increase if businesses become eligible for loans and grants. Section 312 of the Stafford Act requires that disaster assistance is distinct and not duplicative. Under Section 312 The President, in consultation with the head of each Federal agency administering any program providing financial assistance to persons, business concerns, or other entities suffering losses as a result of a major disaster or emergency, shall assure that no such person, business concern, or other entity will receive such assistance with respect to any part of such loss as to which he has received financial assistance under any other program or from insurance or any other source. FEMA and SBA use a computer matching agreement (CMA) in the application process to share real-time disaster assistance to prevent duplication of benefits. Despite the use of such mechanisms, duplication can still occur. Under 44 C.F.R. §206.191, a federal agency providing disaster assistance is responsible for identifying and rectifying instances of duplicative assistance. If identified, the recipient is required to repay the duplicated assistance. In some cases the federal government does not identify instances of duplication, and the improper payments are never recovered. In others cases, it may take a prolonged period of time to identify the duplication and the repayment notification may come as a surprise to disaster victims who did not realize they have to repay their assistance if that assistance is found to be duplicative. The payment may be an additional financial and emotional burden if the grantee has spent all of their assistance proceeds on recovery needs. If Congress authorizes a small business disaster grant program, it may consider conducting investigations and holding hearings to help determine which authorization statute would be best at reducing duplication of administrative functions and benefits. Congress would need to identify an authorizing statute should it create a disaster grant program for businesses. Congress could decide to authorize a small business disaster grant program under the Stafford Act (as was proposed by H.R. 6641 ), the Small Business Act, or other statute. FEMA would most likely be solely responsible for administering a small business disaster grant program if it were authorized under the Stafford Act. Having FEMA administer the program may have a number benefits. First, FEMA already has grant processing operations in place. It might be relatively easier to expand the operations to include small businesses disaster grants rather than establishing new grant-making operations within SBA. Second, having FEMA administer the small business disaster grant program may help limit duplication of administrative functions between FEMA and SBA. Third, FEMA has an existing account called the Disaster Relief Fund (DRF) that receives annual and supplemental appropriations to fund its disaster assistance programs. DRF appropriations could be increased to pay for small business disaster grants. In contrast, Congress would likely need to make statutory changes to SBA's existing disaster loan account, or authorize a new account, if a small business disaster grant program was administered by SBA. SBA would probably administer a small business disaster grant program if it were authorized under the Small Business Act. As mentioned previously, SBA currently has authority under the Small Business Act to provide grants to SBA resource partners to provide training and other technical assistance to small businesses affected by a disaster, but it does not have specific authority to provide disaster grants to businesses or individuals. Congress could decide to have SBA administer the program because it already has a framework in place to evaluate business disaster needs and disaster loan eligibility. Congress may need to make statutory changes to SBA's disaster loan account or authorize a new account to receive appropriations for disaster grants. Another legislative approach Congress could consider is allowing SBA to draw funds from FEMA's DRF to pay for small business disaster grants. Some may question this funding approach because it would allow SBA to draw funds from another agency's account. The funding arrangement could also be problematic if DRF became low on funds and there are competing priorities for scarce resources. Under current laws, FEMA grants and SBA disaster loans are triggered by a "declaration" under the Stafford Act, an SBA declaration, or both. The type (or category) of declaration determines what types of federal assistance are made available. Declarations are a necessary, but not sufficient condition for federal disaster assistance to businesses. The types of assistance made available are further influenced by the "designations" contained within the declaration. Declarations and designations may have a similar influence on a small business disaster grant program. The following describes the nexus between federal disaster assistance and declarations in more detail. If the current declaration framework were applied to a small business disaster grant program, relatively fewer businesses may be eligible for grant assistance if authorized under the Stafford Act compared to the Small Business Act. This is because the thresholds and criteria used to make Stafford Act declaration determinations are relatively higher than the ones used to provide disaster assistance under the Small Business Act. The Stafford Act authorizes the President to issue major disaster declarations that provide states, tribes, and localities with a range of federal assistance in response to natural and human-caused incidents. Each presidential major disaster declaration includes a designation. The designation determines what FEMA grants are available for the incident. It also designates which counties are eligible for the grants. The potential types of FEMA grant assistance include (1) Public Assistance (PA) for infrastructure repair; (2) Hazard Mitigation Grant Program (HMGP) grants to lessen the effects of future disaster incidents; and (3) Individual Assistance (IA) for aid to individuals and households. Under FEMA regulations: The Assistant Administrator for the Disaster Assistance Directorate has been delegated authority to determine and designate the types of assistance to be made available. The initial designations will usually be announced in the declaration. Determinations by the Assistant Administrator for the Disaster Assistance Directorate of the types and extent of FEMA disaster assistance to be provided are based upon findings whether the damage involved and its effects are of such severity and magnitude as to be beyond the response capabilities of the state, the affected local governments, and other potential recipients of supplementary federal assistance. The Assistant Administrator for the Disaster Assistance Directorate may authorize all, or only particular types of, supplementary federal assistance requested by the governor. The "findings" referenced above are known as "factors" that are used by FEMA to evaluate a governor's or chief executive's request for a major disaster declaration and make IA and PA recommendations to the President (a full description of the factors can be located in the Appendix ). While all major disaster declarations have HMGP designations, not all declarations designate IA and PA. In rare cases, only IA and HMGP are designated. More commonly, PA and HMGP are designated (these are sometimes referred to as "PA-only" major disaster declarations). This is because major disasters often cause greater damage to public infrastructure relative to damaged households. Stafford Act declarations also trigger the SBA Disaster Loan Program and the types of loans are determined by the designation. If IA is designated, then all SBA disaster loans types are made available to eligible businesses. If PA is designated, then only private nonprofit organizations are eligible for disaster loans (see Figure 1 ). In other words, most private businesses would not be able to obtain a disaster loan under a PA-only major disaster declaration. If the existing declaration framework is applied to a small business disaster grant program, then small businesses would generally be eligible for disaster grants for Stafford Act major disaster declarations that included an IA designation. By comparison, disaster loans would likely only be made available to private nonprofit organizations under a PA-only declaration. Some might be concerned that too few businesses would be eligible for disaster grants if the existing declaration and designation framework were applied to a small business disaster grant program. They may also question the relevance of the IA designation because the factors used to determine IA do not evaluate business damages or economic loss. For example, it is conceivable that an incident could cause significant damage to public infrastructure and businesses but not to households. Consequently, businesses could be denied assistance because it was determined that damages to residences did not warrant assistance to individuals and households. There are, however, at least four reasons why some might argue that the existing declaration and designation framework should be applied to a small business disaster grant program: 1. It could help ensure that small business disaster grants were only provided for large-scale incidents. 2. It could help limit grant costs because not all declarations would trigger small business disaster grants. 3. Applying the declaration and designation framework uniformly to the grant and loan programs would align the two programs and reduce the potential for administrative confusion or duplication. 4. Conversely, using different designations could create a perceived disparity between the loan and grant programs because some business owners may question why grants are available for some major disasters (because they are designated IA and PA), but not others (because they have PA-only designations). If Congress authorized a small business disaster grant program under the Stafford Act, it could consider using the existing declaration and IA designation framework used to trigger eligibility for the SBA Disaster Loan Program. This would align the implementation of the two programs and potentially smooth administrative processes and potentially limit costs. An alternative policy option Congress might consider is a "business designation" rather than existing designations to determine whether the incident warrants a grant, a loan, or both. The business designation could use a separate set of factors or criteria similar to the ones FEMA currently uses to evaluate declaration requests and make IA and PA recommendations. This could align the designation with damages that are specific to small businesses. Congress could consider using SBA declarations to provide disaster grants to small businesses rather than Stafford Act declarations. The following describes how SBA declarations are used to make disaster loans available and examines the potential policy implications of using the same structure to provide disaster grants to small businesses. The SBA Administrator has authority under the Small Business Act to make two types of disaster declarations: (1) a physical disaster declaration (commonly referred to as an "SBA declaration"), and (2) an Economic Injury Disaster Loan (EIDL) declaration (see Figure 1 ). Each declaration could make certain forms of assistance available if SBA disaster declarations were to be applied to a small business disaster grant program: 1. The SBA Administrator may issue a physical disaster declaration in response to a gubernatorial request for assistance. This type of declaration is often made for relatively smaller incidents. The criterion used to determine whether to issue this type of declaration is generally the presence of at least 25 homes or businesses (or some combination of the two) that have sustained uninsured losses of 40% or more in any county or other smaller political subdivision of a state or U.S. possession. When the SBA Administrator issues a physical disaster declaration, both SBA disaster loan types become available to eligible homeowners, renters, businesses of all sizes, and nonprofit organizations within the disaster area or contiguous counties and other political subdivisions (see Figure 1 ). If SBA physical disaster declarations were to be applied to a small business disaster grant program, the grants could be made available to small businesses for incidents that do not meet the damage threshold of a major disaster declaration under the Stafford Act. 2. The SBA Administrator may make an EIDL declaration when SBA receives a certification from a state governor that at least five small businesses have suffered substantial economic injury as a result of a disaster. Alternatively, the SBA Administrator may issue an EIDL declaration based on the determination of a natural disaster by the Secretary of Agriculture. The SBA Administrator may also issue an EIDL declaration based on the determination of the Secretary of Commerce that a fishery resource disaster or commercial fishery failure has occurred. Only EIDLs are available under this type of declaration (see Figure 1 ). EIDL assistance helps businesses meet financial obligations and operating expenses that could have been met had the disaster not occurred. Loan proceeds can only be used for working capital necessary to enable the business or organization to alleviate the specific economic injury and to resume normal operations. The assistance is designed to help businesses that did not suffer direct damages, but rather businesses that have suffered economic loss as a result of an incident. For example, disasters such as hurricanes can disrupt tourism. In such cases, there may have been some businesses that did not suffer direct damages, but still lost tourism revenue as a result of the hurricane. If EIDL declarations were to be applied to a small business disaster grant program, the grants could be used to provide similar economic assistance to businesses suffering from economic loss as a result of a disaster. A comparison of Stafford Act declarations (including designations) and SBA declarations from 2008 to 2017 provides context to the SBA declarations outlined above. As shown in Figure 2 and Table 1 , during this period, 2,869 declarations were issued under the Stafford Act and the Small Business Act. A total of 791 declarations were issued under the Stafford Act. Of these, 194 (6.8% of total declarations) included IA and PA assistance, while 597 (20.8% of total declarations) were PA-only. In contrast, during the same period, a total of 2,078 (72.4%) declarations were issued under the Small Business Act. Of these, 512 (17.8% of total declarations) were SBA physical disaster declarations, 97 (3.4%) were EIDL declarations, and 1,469 (51.2%) were EIDL declarations based on the determination of a natural disaster by the Secretary of Agriculture. There were no declarations issued during the 10-year period based on the determination of the Secretary of Commerce that a fishery resource disaster or commercial fishery failure had occurred. The following applies various types of declarations and designations to a potential small business disaster grant program to the above data to draw some inferences on how many businesses might get grants in certain situations. If the small business disaster grant program is only triggered by Stafford Act declarations that designate IA and PA, then roughly 6.8% of the declarations (194) issued in Figure 2 and Table 1 would have made disaster grants available to small businesses. That could be a concern for those who want to provide small business grants for incidents that are too small to qualify for assistance under the Stafford Act. As mentioned previously, SBA declarations often provide assistance to incidents that impact a locality or a region but do not cause enough state-wide damage to warrant a major disaster declaration under the Stafford Act. If the small business disaster grant program is triggered by the SBA Administrator issuing a physical disaster declaration, then roughly 17% of the declarations (512) issued in Figure 2 and Table 1 would have made disaster grants available to small businesses. This type of declaration could arguably make more incidents eligible for grant assistance because the 512 incidents in Figure 2 and Table 1 were presumably issued for incidents that did not meet the per capita threshold for a major disaster declaration under the Stafford Act. It should be noted, however, that the number of grants made available under an SBA Administrator physical disaster declaration would likely depend on whether the grants would only provide assistance for repairing and rebuilding damaged structure or if they would also provide assistance for economic loss. Policymakers could consider making the grants available through either an SBA Administrator physical declaration or an EIDL declaration so that the grants could be used for repairs and rebuilding or for economic loss. If so, then 2,078 declarations during the time period could have made the small business disaster grants available. It could be argued that the greatest number of businesses would benefit from small business disaster grants by applying the existing declaration framework under the combined authorities and making the grants available for either physical damages or economic loss. In other words, the same conditions under which SBA disaster loans are made available. Doing so would make small business disaster grants available in all of the declarations in Figure 2 and Table 1 with the exception of the PA-only Stafford Act declarations, under which only private nonprofit organizations are eligible (see Figure 1 ). While some may favor making small business disaster grants available for a wide-range of incidents others may want to limit their use. For example, those concerned about the cost implications of a small business disaster grant program may prefer Stafford Act declarations over SBA declarations. As mentioned previously, the thresholds used to determine SBA declarations are lower and generally based on (1) at least 25 homes or businesses (or some combination of the two) sustaining uninsured losses of 40% or more in any county or other smaller political subdivision of a state or U.S. possession; or (2) at least three businesses in the disaster area sustaining uninsured losses of 40% or more of the estimated fair replacement value of the damaged property (whichever is lower). The lower thresholds help provide disaster loans for incidents that are locally damaging, but do not cause enough widespread damage to warrant a major disaster declaration. In contrast, the threshold used by FEMA under the Stafford Act to a recommend major disaster declaration is significantly higher. In general, public infrastructure damages must meet or exceed $1.43 per capita (based on the most recent census figures) to be recommended for major disaster assistance. Applying the per capita threshold to a small business disaster grant program could help ensure that grants are only provided in cases of large-scale disasters. SBA declaration thresholds might be lower than FEMA thresholds because federal costs associated with loans (which are supposed to be repaid) are less than grants. If costs are a concern, policymakers might consider using criteria similar to FEMA's per capita threshold used for major disaster declarations to issue small business disaster grants. Finally, another factor to consider is whether the declaration is properly aligned with the agency administering the small business disaster grant program. For example, it could be problematic if small business disaster grants are triggered by SBA declarations but administered by FEMA. SBA would essentially be putting another agency's program into effect. Consequently, it could be argued that a small business disaster grant program should be administered by FEMA if Stafford Act declarations are used to trigger the program, or administered by SBA if SBA declarations are used to put the program into effect. The small business disaster grant program proposed by H.R. 6641 would have provided grants to "private business damaged or destroyed by a major disaster for the repair, restoration, reconstruction, or replacement of the facility and for the associated expenses incurred by the person." Congress could consider similar legislative language if it authorized a small business disaster grant program, or it may wish to develop a detailed list of what damage types and economic loss amounts would be eligible for grant assistance. Similarly, Congress could also consider whether grants could be used for economic loss and/or mitigation measures. As mentioned previously, in some cases a disaster can disrupt services and create economic hardship for businesses without causing structural damages. SBA EIDL provides businesses with up to $2 million in loans to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. These loan proceeds can only be used for working capital necessary to enable the business or organization to alleviate the specific economic injury and to resume normal operations. Loan amounts for EIDLs are based on actual economic injury and financial needs, regardless of whether the business suffered any property damage. Some may suggest that small business disaster grants should be limited to small businesses that need assistance to repair and rebuild their business. Others may think that grants should also be provided for economic loss. For example, as mentioned previously H.R. 3930 authorized grants for business interruption, overhead costs, and employee wages as well as for rebuilding and repairs. If Congress were to authorize a small business disaster grant program, it may also consider whether the grants should be available for economic loss or limit them to specific types of damage. Businesses obtaining an SBA physical disaster loan may use up to 20% of the verified loss amount for mitigation measures (e.g., grading or contouring of land; relocating or elevating utilities or mechanical equipment; building retaining walls, safe rooms, or similar structures designed to protect occupants from natural disasters; or installing sewer backflow valves) in an effort to prevent loss should a similar disaster occur in the future. If Congress decided to allow small businesses that receive a disaster grant to use the funds for mitigation purposes, it could limit those expenditures to a percentage of the total grant amount, or it could allow the entire grant to be used for mitigation measures. In addition, if Congress decided to allow disaster grants to be used for mitigation, Congress could consider whether to provide the grant prior to a disaster or without a declaration. For example, Congress could model small business mitigation grants on the Pre-Disaster Mitigation pilot program. P.L. 106-24 amended Section 7(b)(1) of the Small Business Act to include a Pre-Disaster Mitigation pilot program administered by SBA during fiscal years 2000 through 2004. The program allowed SBA to make low-interest (4% or less) fixed-rate loans of no more than $50,000 per year to small businesses to implement mitigation measures (such as relocating utilities, grading, and building retaining or sea walls) designed to protect the small business from future disaster-related damage. Congress may consider business size as a criterion for receiving small business disaster grants as a means to target the assistance to businesses of specific sizes. One option could be using SBA's size standards. The SBA uses two measures to determine if a business qualifies as small for its loan guaranty and venture capital programs: industry specific size standards or a combination of the business's net worth and net income. For example, the SBA's Small Business Investment Company (SBIC) program allows businesses to qualify as small if they meet the SBA's size standard for the industry in which the applicant is primarily engaged, or a maximum tangible net worth of not more than $19.5 million and average after-tax net income for the preceding two years of not more than $6.5 million. All of the company's subsidiaries, parent companies, and affiliates are considered in determining if it meets the size standard. For contracting purposes, firms are considered small if they meet the SBA's industry specific size standards. Overall, the SBA currently classifies about 97% of all employer firms as small. These firms represent about 30% of industry receipts. The SBA's industry size standards vary by industry, and are based on one of the following four measures: the firm's (1) average annual receipts in the previous three years, (2) number of employees, (3) asset size, or (4) for refineries, a combination of number of employees and barrel per day refining capacity. Historically, the SBA has used the number of employees (ranging from 50 or fewer to no more than 1,500 employees) to determine if manufacturing and mining companies are small and average annual receipts (ranging from no more than $5.5 million per year to no more than $38.5 million per year) for most other industries. Congress, however, may want to limit disaster grant assistance to small businesses that have fewer employees that are particularly vulnerable to disaster. For example, it could consider providing grants only to businesses of 10 or fewer employees to target "mom and pop shops." As mentioned previously, H.R. 6641 (the Small Business Owner Disaster Relief Act of 2008) would have allowed businesses with 25 or fewer employees to receive grants to repair, restore, or replace damage facilities. Based on data compiled by SBA on business disaster loan applications from FY2013 to FY2017, Figure 3 provides a rough estimate of how many businesses over a five-year period could potentially receive a small business disaster grant under several different size standards. Based on the FY2013 through FY2017 SBA data, if small business disaster grants were limited to businesses of 10 employees or fewer, roughly 10,000 businesses over a five-year period could be eligible for a small business disaster grant. Over that same time period, nearly 11,000 small businesses could be eligible if the cap were 25 employees or fewer employees. That number would not change substantially if the cap were 50, 75, or 100 or fewer employees (see Figure 3 ). Finally, SBA applications for disaster loans currently rely on self-reporting of their number of employees. Congress may consider whether this data should be verified by SBA, or if doing so might inappropriately delay the receipt of the grant. H.R. 6641 would have capped small business disaster grants at the maximum amount of assistance a family could receive from FEMA's Individuals and Households program (currently $34,900). Error! Reference source not found. and Table 2 provide cost estimates based on businesses of 25 or fewer employees that applied for disaster loans from FY2013 to FY2017. Based on the data, if disaster grants were capped at $35,000, and all of the businesses that received a loan received a grant instead, the grants would have totaled roughly $384 million. If capped at $25,000, the grants would have totaled roughly $274 million. Finally, if capped at $10,000, the grants would have totaled roughly $110 million. If Congress authorizes a small business disaster grant program, it could consider capping the amount based on Section 408 of the Stafford Act, or some other amount. Congress may also decide to examine business recovery costs to ensure grant amounts are appropriate for business recovery needs. One potential approach Congress could consider is creating a pilot program which could be used to evaluate the program's effectiveness and costs. This information could be used to help determine if the program should be made permanent. For example, Congress established a Pre-Disaster Mitigation pilot program to be administered by SBA during fiscal years 2000 through 2004 ( P.L. 106-24 ). The program authorized SBA to issue low-interest (4% or less) fixed-rate loans of no more than $50,000 per year to small businesses to implement mitigation measures (such as relocating utilities, grading, and building retaining or sea walls) designed to protect the small business from future disaster-related damage. Congress could consider implementing a similar pilot program that would provide disaster grants to small businesses over a specified period of time. To some, a pilot program would be a more cautious approach to implementing a small business disaster grant program. If Congress determined that the grant program was too costly or ineffective, it could decide not to reauthorize the program. Some may suggest that rather than providing small businesses with disaster grants, Congress could explore alternative methods for helping small businesses recover from a disaster. Some alternative methods include loan forgiveness, decreased disaster loan interest rates, and providing assistance to help businesses develop continuity and disaster response plans. Congress could consider authorizing loan forgiveness to businesses under certain circumstances. Loan forgiveness is rare, but has been used in the past to help businesses that were having difficulty repaying their loans. For example, loan forgiveness was granted after Hurricane Betsy, when President Lyndon B. Johnson signed the Southeast Hurricane Disaster Relief Act of 1965. Section 3 of the act authorized the SBA Administrator to grant disaster loan forgiveness or issue waivers for property lost or damaged in Florida, Louisiana, and Mississippi as a result of the hurricane. The act stated that to the extent such loss or damage is not compensated for by insurance or otherwise, (1) shall at the borrower's option on that part of any loan in excess of $500, (A) cancel up to $1,800 of the loan, or (B) waive interest due on the loan in a total amount of not more than $1,800 over a period not to exceed three years; and (2) may lend to a privately owned school, college, or university without regard to whether the required financial assistance is otherwise available from private sources, and may waive interest payments and defer principal payments on such a loan for the first three years of the term of the loan. Congress could also consider reducing interest rates for businesses under specific circumstances or for specific types of disasters. Interest rate ceilings for business physical disaster loans are statutorily set at 8% per annum or 4% per annum if the applicant is unable to obtain credit elsewhere. The interest rate ceiling for EIDL is 4% per annum. Interest floors have not been established in statute. Providing relief to businesses through the use of reduced interest rates or loan forgiveness as opposed to grants may have the following advantages: (1) they could provide Congress with a flexible method to provide assistance to struggling businesses that can be applied on a case-by-case basis; (2) they would likely be less expensive than grants; and (3) they may reduce the possibility of duplication of benefits between grants and loans. On the other hand, it could be argued that providing relief to businesses through reduced interest rates or loan forgiveness as opposed to grants may not provide timely assistance because providing relief on a case-by-case basis would require Congress to debate and pass legislation before the relief could be provided. There may also be concern this approach could be applied too arbitrarily. Research indicates that many businesses do not have contingency or disaster recovery plans. For example, a survey of Certified Public Accounting (CPA) firms located on Staten Island, NY, indicated that only 7% of the respondents had a formal continuity or disaster recovery plan in place prior to Hurricane Sandy and nearly 42% of those firms that had a formal continuity or disaster recovery plan admitted that they never tested their plan. Approximately 40% had an informal plan that had been discussed but not documented. More than half of the responding firms did not have a contingency or disaster recovery plan. Of those that did not have any type of a plan, 60% thought the plans were unnecessary and 20% said that establishing a plan was too time-consuming. Congress could investigate methods that would incentivize businesses to develop contingency and disaster recovery plans. This could be done through new programs or through existing ones such as FEMA's Ready Business Program which is designed to help businesses plan and prepare for disasters by providing businesses various online toolkits that can help them identify their risks and develop a plan to address those risks. Congress could also investigate the extent to which the Ready Business Program is collaborating with SBA's efforts to help businesses with emergency preparedness. Similarly, Congress could consider the pros and cons of providing grants to businesses to help them plan and prepare for disasters. For example, providing grants for this purpose could be more expensive than mitigation loans, but cost less than a small business disaster grant program designed to assist businesses following a disaster. Advocates for mitigation grants could further argue that providing grants for mitigation rewards businesses that take the initiative to plan ahead for potential disasters and could reduce, as least to some extent, future costs. Opponents, on the other hand, might believe that existing mitigation programs are sufficient. Congress has contemplated how to help businesses rebuild and recover from disasters for nearly a century. Historically, the federal policy for providing disaster assistance to businesses has primarily been limited to low-interest loans. While disaster loans have been instrumental in helping business recover from incidents, over the years Congress has considered whether grant assistance might be needed in addition to, or instead of business disaster loans. Changing the federal government's disaster policy approach to businesses could be complex and require careful decisionmaking. Steps would need to be taken to avoid and remedy potential grant and loan duplication. Congress would also have to determine under what circumstances and situations the grant program would be put into effect. Eligibility requirements would need to be developed to determine under what situations and circumstances grants would be provided as well as what types of business should be eligible to receive grants. Similarly, Congress might consider whether grants could be used for rebuilding, mitigation, or economic loss, in addition to other recovery activities. In addition to these concerns and others, Congress may want to investigate the potential cost implications of a small business disaster grant program. Alternatively, Congress could leave the current policy in place. Those advocating no change are generally supportive of the view that federal disaster assistance should be supplemental in nature and that private insurance and access to low-interest loans should remain the primary means of helping small businesses recover after a disaster. Public Assistance Factors Estimated Cost of the Assistance Estimated cost of assistance is perhaps the most important factor FEMA considers when evaluating whether a governor's or chief executive's request warrants PA because it is a strong indicator of whether 'the situation is of such severity and magnitude that an effective response is beyond the capacities of the State and affected local governments." FEMA generally relies on two thresholds to evaluate whether to recommend PA. The first threshold is $1 million in public infrastructure damages. This threshold is set "in the belief that even the lowest population states can cover this level of public assistance damages." The second threshold used by FEMA is determined by multiplying the state's population (according to the most recent census) by a specified statewide per capita impact indicator—currently $1.43. In general, FEMA will recommend a major disaster declaration that includes PA if public infrastructure damages exceed $1 million and meet or exceed $1.43 per capita. The underlying rationale for using a per capita threshold is that tax revenues that support a state's disaster response capacity should be sufficient if damages and costs fall under the per capita amount. Localized Impacts FEMA also considers impacts to localities (e.g., counties, parishes, boroughs). While capacity to respond to, and recover from, an incident are evaluated on the state level, PA and IA are provided only to the specific counties designated in a declaration. As specified in FEMA regulations The Assistant Administrator for the Disaster Assistance Directorate also has been delegated authority to designate the affected areas eligible for supplementary federal assistance under the Stafford Act. These designations shall be published in the Federal Register. An affected area designated by the Assistant Administrator for the Disaster Assistance Directorate includes all local government jurisdictions within its boundaries. To this end, FEMA uses a countywide per capita impact indicator of $3.61 per capita in infrastructure damage to assess localized impacts. In general, it is expected that a locality that meets or exceeds the $3.61 per capita threshold will be designated by FEMA for PA funding. Insurance Coverage Insurance coverage is considered in PA determinations when reviewing a governor's or tribal chief executive's request for major disaster assistance. As part of the assessment of disaster related damage, FEMA subtracts the amount of insurance coverage that is in force or that should have been in force as required by law and regulation at the time of the disaster from the total estimated eligible cost of PA for units of government and certain private nonprofit organizations. Hazard Mitigation FEMA encourages hazard mitigation efforts by considering how previous measures may have decreased the overall damages and costs following an incident. This could include rewarding states that have a statewide building code. If the requesting state can prove, by way of cost-benefit analyses or other related estimates, that its per capita amount of infrastructure damage falls short of the statewide per capita impact threshold due to mitigation efforts, FEMA will consider that favorably in its recommendation to the President. In these instances, FEMA may also consider whether the mitigation work has been principally financed with previous FEMA disaster assistance funding through the Hazard Mitigation Grant Program (HMGP), through the Pre-Disaster Mitigation (PDM) program, or by state or local resources. Recent Multiple Disasters If a state or tribal nation has suffered multiple disasters—whether declared or not—in the previous 12 months, FEMA considers the financial and human toll of those recent incidents in its consideration of whether to recommend PA. For example, if a state has responded on its own to a series of tornadoes, FEMA may consider a request for a declaration more favorably than they would have otherwise. Programs of Other Federal Assistance FEMA also considers whether other federal disaster assistance is available when reviewing a major disaster request. In some cases, other federal programs are arguably more suitable for addressing the types of damage caused by an incident. For example, damage to federal-aid roads and bridges are eligible for assistance under the Emergency Relief Program of the Federal Highway Administration (FHWA). Other federal programs may have more specific authority to respond to certain types of disasters, such as damage to agricultural areas. Assistance may also be provided under authorities separate from the Stafford Act with or without a Stafford Act declaration. For example, assistance for droughts is frequently provided through authorities of the U.S. Department of Agriculture (USDA) and the Secretary of Health and Human Services (HHS) can provide assistance to states in response to a public health threat without the President's involvement via Stafford Act authorities. Individual Assistance Factors Concentration of Damages According to FEMA regulations, highly concentrated damages "generally indicate a greater need for federal assistance than widespread and scattered damages throughout a state." The assumption that underlies this regulation is that the local support networks available to recover from an incident are increasingly undermined as more members of those local support networks become survivors of the incident. The dispersion of damage, however, is not necessarily an indication of total individual and household needs. Rural incidents, in particular, can be more difficult to assess because damages tend to be geographically less concentrated. As mentioned under the factors considered for PA, Congress has sought to address the challenges posed by rural incidents in receiving major disaster declarations and assistance packages. Trauma FEMA regulations cite three conditions that indicate a high degree of trauma to a community: (1) large numbers of injuries and deaths; (2) large-scale disruption of normal community functions and services; and (3) emergency needs such as extended or widespread loss of power or water. FEMA considers the trauma caused by injuries and loss of life in determining whether IA, or specific programs under IA, is warranted in an affected area. For IA-eligible medical and funeral expenses under Section 408 of the Stafford Act, this factor can carry some weight in making a determination. Large-scale disruption of normal community functions and emergency needs such as extended or widespread loss of power or water are also indicative of trauma and are considered when evaluating a governor's or chief executive's request. Assessing these indicators can be problematic because they are not currently defined in law or regulation. Consequently, discretionary judgments are significant aspects of the evaluation of IA needs for large-scale disruptions of normal community functions and extended or widespread emergency needs. Special Populations FEMA considers the unique needs of certain demographic groups within an affected area when evaluating an IA request. These "special populations" include low-income and elderly populations, and American Indian and Alaskan Native tribal populations. Although special populations are a distinct factor in the consideration of a governor's or chief executive's request, special populations may also contribute to the overall number of IA-eligible households in an affected area. Voluntary Agency Assistance As with PA, FEMA considers whether state, local, or tribal governments "can meet the needs of disaster victims" prior to offering supplemental assistance through IA. Additionally for IA, FEMA considers the extent to which voluntary agency assistance can meet those needs. Insurance Similar to insurance coverage of public and certain private, nonprofit facilities for PA, insurance coverage of private residences is an important consideration for IA. Per FEMA regulation, "by law, federal disaster assistance cannot duplicate insurance coverage ." Therefore, the calculation of IA-eligible losses must deduct those losses covered by insurance. FEMA assumes owner-occupied homes with a mortgage are insured against many natural disasters under their homeowner insurance policies. Under that assumption, FEMA uses census data to determine homeowner insurance penetration. Further, if the home is located in a flood - prone area then purchasing insurance for those disasters is often a legal requirement if the owner h as a federally-backed mortgage. FEMA administers the N ational F lood I nsurance P rogram (NFIP) which allows officials to more directly determine the status of flood insurance in communities and the number of policies in place in an affected area. Average Amount of Individual Assistance by State FEMA compares the total IA cost estimate from the Preliminary Damage Assessment (PDA) to the average amount of individual assistance by state. More specifically, regulations published in 1999 include a table of the average amount of IA per disaster, by state population, from July 1994 to July 1999 (reproduced as Table A-1 ). FEMA stresses that these averages are not to be used as thresholds but rather as a guide that "may prove useful to states and voluntary agencies as they develop plans and programs to meet the needs of disaster victims." It should be noted that some have questioned the relevance of this factor given the amounts have not been updated since 1999 and are based on 1990 census data.
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Throughout the years, Congress has expressed interest and concern for businesses recovering from disasters. For nearly a century, the federal government's policy for providing disaster assistance to businesses has been limited primarily to low interest loans rather than grant assistance. More recently, Congress has contemplated whether grants should be made available to small businesses after a major disaster. During this debate, some have questioned why small businesses are not eligible for disaster grants when residences, nonprofit groups, and state and local governments are eligible. In addition to concerns about equity, proponents of small business disaster grants argue that small businesses should be eligible for grant assistance because of the important role they play in the national economy. Major disasters can severely disrupt economic activity by causing immediate losses of output, income, and employment. While reports vary on the number of small businesses that fail after a disaster, even the low estimates could be considered significant. The Institute for Business and Home Safety found that 25% of businesses that close following a disaster fail to reopen, and a study on businesses in New Orleans recovering from Hurricane Katrina found that 12% of businesses remained closed 26 months after the storm. The number of failing businesses after a disaster reported by Federal Emergency Management Agency (FEMA) are higher. According to FEMA, "roughly 40%-60% of small businesses never reopen their doors following a disaster." To some, these findings suggest that the federal government should play a greater role in business disaster recovery. As part of this expanded role, Congress could consider providing grants to businesses to help them rebuild and recover from disasters. Changing the federal government's approach to business disaster policy, however, could be complex and require some careful decisionmaking. Steps would need to be taken to avoid and remedy potential grant and loan duplication. Congress would also have to determine under what circumstances and situations the grant program would be put into effect. Eligibility requirements would need to be developed to determine under what situations and circumstances grants would be provided as well as what types of businesses should be eligible to receive grants. Similarly, Congress might consider whether grants could be used for rebuilding, mitigation, or economic loss, in addition to other recovery activities. In addition to these concerns and others, Congress may want to investigate the potential cost implications of a small business disaster grant program. This report examines the historical development of federal disaster assistance to help explain possible reasons why businesses are currently provided disaster loans rather than grants. This is followed by a discussion of policy considerations and options related to a potential disaster grant program for small businesses, including how to minimize duplication of operations and benefits; whether to authorize the program in the Small Business Act, the Stafford Act, or other statute; the potential cost implications of a small business disaster grant program; and eligibility requirements (such as business size standards, eligible activities, and grant award amounts). Alternatively, Congress could explore other policy options to support small businesses struggling to recover from a disaster, including loan forgiveness; decreased interest rates; and establishing programs to help small (and large) businesses develop disaster and business continuity plans.
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T he farm bill is an omnibus, multiyear law that governs an array of agricultural and food programs. It provides an opportunity for Congress to choose how much support to provide for agriculture and nutrition and how to allocate it among competing constituencies. The farm bill has typically undergone reauthorization about every five years. The current farm bill—the Agriculture Improvement Act of 2018 ( P.L. 115-334 , H.R. 2 ), often called the "2018 farm bill"—was enacted in December 2018 and expires in 2023. From its beginning in the 1930s, farm bills have focused primarily on farm commodity programs to support a handful of staple commodities—corn, soybeans, wheat, cotton, rice, dairy, and sugar. In recent decades, farm bills have expanded in scope to include a Nutrition title since 1973 and since then Conservation, Horticulture, Bioenergy, Credit, Research, and Rural Development titles. Budget matters increasingly influence the development of the farm bill. While other reports discuss policy issues, this report focuses on the budgetary effects across the whole farm bill. One way to compare the activities covered by a farm bill is by the allocation of federal spending and, more specifically, by how much is spent in total and how a new law changes allocations or policy. Congressional Budget Office (CBO) estimates are the official measures when bills are considered and are grounded in long-standing budget laws and rules. Recent farm bills have faced various budget situations, including spending more under a budget surplus, cutting spending for deficit reduction, and remaining budget neutral. For example The 2002 farm bill (the Farm Security and Rural Investment Act of 2002, P.L. 107-171 ) was enacted under a budget surplus that allowed it to make changes that were projected to increase spending by $73 billion, or 22%, over a 10-year budget window—more than half of which was for the farm commodity programs. The 2008 farm bill (the Food, Conservation, and Energy Act of 2008, P.L. 110-246 ) was officially budget neutral, though it included $10 billion of offsets over 10 years from tax-related and other provisions that allowed it to increase spending on the Nutrition, Conservation, and Disaster titles. The 2014 farm bill (the Agricultural Act of 2014, P.L. 113-79 ) was enacted under deficit reduction and budget sequestration that influenced its legislative development. It made changes that projected a net reduction of $17 billion, or 1.7%, over 10 years ($23 billion including sequestration). The 2018 farm bill (the Agriculture Improvement Act of 2018, P.L. 115-334 ) was held to a budget-neutral position over its 10-year budget window. Some budget amounts were reallocated across programs within issue areas and across titles of the farm bill, as discussed throughout this report. Generally, farm bills authorize spending in two categories: mandatory and discretionary. From a budgetary perspective, many of the larger programs are assumed to continue beyond the end of a farm bill, even though their authorizations to operate may expire. That projection for mandatory programs, as explained below, provides funding to reauthorize programs, reallocate funding to other programs, or take offsets for deficit reduction. For other programs, funding must come by other means. This includes new programs, those without baseline, or discretionary programs. The Supplemental Nutrition Assistance Program (SNAP) and crop insurance have their own mandatory spending sources, but most other mandatory outlays are paid through the U.S. Department of Agriculture's (USDA) Commodity Credit Corporation (CCC). Discretionary spending is authorized throughout the farm bill, including most rural development, credit, and research programs, among others. Some smaller research, bioenergy, and rural development programs are authorized to receive both mandatory and discretionary funding. Most agency operations (salaries and expenses) are financed with discretionary funds. Discretionary appropriations are made separately through an annual agriculture appropriations act. While both types of programs are significant, mandatory programs often dominate the farm bill debate. Therefore, the majority of this report focuses on mandatory spending Figure 1 illustrates the distribution of the $428 billion five-year total of projected mandatory outlays at enactment for the life of the 2018 farm bill (FY2019-FY2023). Figure 2 shows program-level detail for agriculture-specific programs, particularly the Farm Commodity and Conservation titles. Table 1 presents these outlays (the fifth and 10 th columns), and how budgetary resources were reallocated across titles of the farm bill, for both the five- and 10-year budget windows. The terms baseline and score are explained in later sections of this report. Mandatory spending is authorized throughout the farm bill, but four titles presently account for about 99% of the mandatory farm bill spending: Commodities (7.3%), Nutrition (76%), Crop Insurance (8.9%), and Conservation (6.8%). The Congressional Budget Office (CBO) baseline is a projection at a particular point in time of future federal spending on mandatory programs under current law. The baseline is the benchmark against which proposed changes in law are measured. The CBO develops the budget baseline under various laws and follows the supervision of the House and Senate Budget Committees. When a new bill is proposed that would affect mandatory spending, the score (cost impact) is measured in relation to the baseline. Changes that increase spending relative to the baseline have a positive score; those that decrease spending relative to the baseline have a negative score. Having a baseline essentially gives programs built-in future funding if policymakers decide that the programs should continue—that is, straightforward reauthorization would not have a scoring effect (budget neutral). Once a new law is passed, the projected outlays at enactment equal the baseline plus the score . This sum becomes the budget foundation of the new law. CBO periodically projects future government spending via its budget baselines, and evaluates proposed bills via scoring estimates. The baseline incorporates domestic and international economic conditions at the time the baseline is projected. Generally, a program with estimated mandatory spending in the last year of its authorization may be assumed to continue in the baseline as if there were no change in policy and it did not expire. This is the situation for most of the major, long-standing farm bill provisions such as the farm commodity programs or supplemental nutrition assistance. However, some programs do not continue in the baseline beyond the end of a farm bill because they are either programs with estimated mandatory spending less than a minimum $50 million scoring threshold in the last year of the farm bill, or new programs established after 1997 for which the Budget Committees have determined that mandatory spending shall not extend beyond expiration. This decision may have been made in consultation with the Agriculture Committees for a number of reasons, such as to reduce the program's 10-year cost when a farm bill is written or to prevent the program from having a continuing baseline. The 2014 farm bill had 39 programs without baseline beyond FY2018 that received $2.824 billion in mandatory funding over five years. The CBO baseline that was used to develop the 2018 farm bill was released in April 2018 (the first and sixth data columns in Table 1 ). It projected that if the 2014 farm bill were extended, as amended as of April 2018, farm bill programs would cost $426 billion over the next five years (FY2019-FY2023) and $867 billion over the next 10 years (FY2019-2028). Most of the 10-year amount, 77%, was in the Nutrition title for the Supplemental Nutrition Assistance Program (SNAP). The remaining 23%, $203 billion baseline, was for agricultural programs, mostly in crop insurance, farm commodity programs, and conservation. Other titles of the farm bill contributed about 1% of the baseline, some of which are funded primarily with discretionary spending. Table 2 presents the April 2018 baseline by farm bill title with some program-level details for select titles. The CBO score measures the budgetary impact of changes made by the 2018 farm bill. It is measured relative to its benchmark—the CBO baseline. Budget enforcement procedures follow an array of federal budget rules, such as "PayGo," which required budgetary offsets to balance new spending to avoid increasing the federal deficit. Although the farm bill is a five-year authorization—the 2018 farm bill covers FY2019-FY2023—budget rules required it to be scored over a 10-year budget window. Thus, when the farm bill is discussed during legislative development, it may be more often presented by its effect over the 10-year budget window than the five-year duration of the law. Separately, statements about the total cost of the farm bill may be in terms of its five-year outlays (i.e., projected spending over the five-year life of the farm bill). Both can be accurate measures of the farm bill budget depending on the context. CBO released several interim scores of the 2018 farm bill during the various stages of its development. These include scores of the effects of the House-introduced bill ( H.R. 2 ), House-reported bill ( H.R. 2 ), Senate-reported bill ( S. 3042 ), House-passed bill ( H.R. 2 ) and the Senate-passed Amendment to H.R. 2 (the second, third, seventh and eighth columns in Table 1 ; see also the more detailed section-level scores in Appendix A ), Conference agreement for H.R. 2 (the fourth and ninth columns in Table 1 ; see also the more detailed section-level scores in Table 3 ). Subsequent to the House-passed score, CBO released a more detailed assessment of the farm commodity program payment limit provisions in the House-passed bill. This score did not change the amounts but explained background for the score of those provisions in greater detail. Figure 3 shows the distribution of the title-level changes (scores) in the 2018 farm bill conference agreement and the House- and Senate-passed bills that preceded it. Relative to the baseline, the overall score of the 2018 farm bill is budget neutral over a 10-year period. The House-passed bill would have decreased 10-year outlays by $1.8 billion, and the Senate-passed bill was budget neutral. The overall relatively small or budget-neutral net scores are the result of sometimes relatively larger increases and reductions across titles. Generally, the enacted farm bill follows the scoring approach of the Senate bill more closely than the House bill. In the new law, as in the Senate-passed bill, most of the reductions are from the Rural Development title. Six titles in the law have increased outlays over the 10-year period, including Commodities, Trade, Research, Energy, Horticulture, and Miscellaneous. The House-passed bill would have made 10-year reductions in outlays in the Conservation, Nutrition, Energy, and Crop Insurance titles that the conference agreement did not adopt. When separated into the five- and 10-year budget windows, each version of the 2018 farm bill shows a similar pattern of changes in projected outlays. Figure 4 show the scores for the first five years, the second five years, and the 10-year total for the enacted conference agreement. The enacted farm bill increases net outlays in the first five years by $1.8 billion, which is offset by the same amount of net reductions in outlays during the second five years. Therefore, the 10-year net score is budget neutral. In the enacted law, the Conservation and Nutrition titles—which have increases in outlays over the first five years—have decreases during the second five years. Both titles are budget-neutral over the 10-year period. This may occur because of the time needed to implement changes or to make provisions more appealing in the early years despite having less baseline for a future farm bill. A similar pattern held for the House-passed bill ( Figure 5 ) and the Senate-passed bill ( Figure 6 ). In both of those versions, the Conservation and Nutrition titles had increases in the first five years followed by decreases in the second five years. The House-passed bill had reductions in the Nutrition title that were not retained in the conference agreement. The Senate-passed bill would have reduced baseline for the Commodities title, whereas the conference agreement is projected to increase it. Some of the net scores for single titles presented above are the net result of increases and decreases by provisions within the same title. Sometimes, these increases or decreases are relatively large compared to the net title-level effect. These budget effects may reflect policy proposals that may not be apparent in the net title-level scores that are shown in the previous figures. For example In the enacted law, the Conservation title has one section with a $12.4 billion reduction over 10 years (reducing the Conservation Stewardship Program) and seven sections that add to $12.4 billion in increased spending ( Figure 7 ). In the House-passed bill, the Nutrition title had six sections that summed to a $22.0 billion reduction over 10 years (including those for work requirements) and 18 sections that added to $20.6 billion in increased spending. Similarly, the Conservation title had two sections that summed to a $12.6 billion reduction and eight sections that added to $11.8 billion in increased spending ( Figure 8 ). In the Senate-passed bill, none of the titles' section-by-section scores were as large as for the Nutrition and Conservation titles in the House bill. Nonetheless, the section-by-section scores of the Senate-passed bill showed both increases and decreases in the Conservation, Nutrition, Commodities and Miscellaneous titles ( Figure 9 ). For 23 of the 39 of the "programs without baseline" from the 2014 farm bill, the 2018 farm bill provides continuing funding and, in some cases, permanent baseline for future farm bills (see the footnotes in Table 3 ). Fourteen of the programs without baseline received mandatory funding during FY2019-FY2023 but no baseline beyond the end of the farm bill. Nine of the programs without baseline received mandatory funding and permanent baseline beyond the end of the farm bill. Three of these programs were combined with six others into six provisions in the 2018 farm bill. In addition, five provisions in the 2018 farm bill created new programs without baseline for the next farm bill. When a new law is passed, the projected cost at enactment equals the baseline plus the score . This sum becomes the foundation of the new law and may be compared to future CBO baselines as an indicator of how actual costs develop as the law is implemented and conditions change. Table 4 shows the result of this calculation by updating the farm bill baseline ( Table 2 ) by adding the score for programs that were changed by the farm bill ( Table 3 ). The $428 billion projected five-year total for the life of the 2018 farm bill (FY2019-FY2023) is illustrated in Figure 1 . Agriculture program-level detail is illustrated in Figure 2 . Table 1 summarizes these amounts by title for the five- and 10-year budget windows (the fifth and 10 th columns). SNAP accounts for 76% of the $428 billion five-year total. The remaining 24%, $102 billion of projected outlays, is for agricultural programs, mostly in crop insurance (8.9%), farm commodity programs (7.3%), and conservation (6.8%). Relative to historical farm bill spending, Figure 10 shows mandatory outlays for the four largest titles—Nutrition, Crop Insurance, Farm Commodity Programs, and Conservation—that account for 99% of projected spending in the 2018 farm bill. The figure shows the following trends: SNAP outlays, which compose most of the Nutrition title, increased markedly after the recession in 2009 and have been gradually decreasing since 2012. Crop insurance outlays increased steadily over the period, especially as higher market prices and program participation over the past decade have raised the value of insurable commodities. Farm commodity programs outlays generally rise and fall inversely with commodity markets. They were high after losses in the early 2000s, generally trended lower under the direct payment program, and tended to increase after a return to counter-cyclical programs in the 2014 farm bill. Conservation program outlays have grown steadily but have leveled off in recent years. Appendix A. Scores of House-Passed and Senate-Passed Versions of H.R. 2 Appendix B. Discretionary Authorizations In addition to providing mandatory spending, various sections of the farm bill authorize appropriations that may be provided in future discretionary appropriations acts. Such "authorizations for appropriation" are not actual funding but are essentially an indication from the authorizing committees to the appropriations committees about funding intentions. They are subject to budget enforcement via future appropriations bills. Although the score of the farm bill is primarily about mandatory spending, some CBO scoring documents include an estimate of the discretionary spending that would be needed to implement provisions that have authorizations of appropriations. The CBO score of the conference agreement did not address discretionary authorizations. However, earlier CBO scores of the House- and Senate-passed bills did summarize the authorizations for appropriation. Overall, the similarity between the scores of these bills may be an indicator of the authorization levels in the enacted farm bill. For the House-passed version of the farm bill, CBO estimated that implementing the provisions of H.R. 2 that specified authorizations of appropriations would cost $24.5 billion over the five-year period FY2019-FY2023, assuming appropriation of the specified amounts. For the Senate-passed version, the amount was slightly smaller at $23.7 billion. These projections were for the whole bill and not by title. However, the earlier committee-reported scores did estimate the authorizations by title, as shown in Table B-1 . Because the totals of the chamber-passed versions remain nearly the same as the committee-reported totals, the earlier title-level estimates may be indicative of the conference agreement. Three titles account for about 85% of the discretionary authorizations for appropriation in the House and Senate committee-reported farm bill scores: Trade, Research, and Rural Development ( Table B-1 ). Actual funding in annual Agriculture appropriations acts does not necessarily correlate to the authorization for appropriation in the farm bill. The annual authorization for appropriation provided in the 2018 farm bill is between $2 billion and $6 billion ( Table B-1 ), which for this comparison is broadly similar to nearly $7 billion in authorizations for appropriation that were in the 2014 farm bill. However, actual discretionary funding in recent Agricultural appropriations acts total in excess of $20 billion. The difference is because not all of the actual appropriations have their authorization in each farm bill. For example, the Agriculture appropriations act includes funding for salaries and expenses of USDA agencies that may be permanently authorized or is not necessarily reauthorized in the farm bill. Also, jurisdiction for appropriations acts may include agencies or programs that are not in the jurisdiction of the farm bill authorizing committees (such as the roughly $6 billion appropriation for the Special Supplemental Nutrition Assistance Program for Women, Infants, and Children that is not in House Agriculture Committee jurisdiction).
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The farm bill is an omnibus, multiyear law that governs an array of agricultural and food programs. The farm bill has typically undergone reauthorization about every five years. The current farm bill—the Agriculture Improvement Act of 2018 (P.L. 115-334), often called the "2018 farm bill"—was enacted in December 2018 and expires in 2023. The farm bill provides an opportunity for Congress to choose how much support, if any, to provide for various agriculture and nutrition programs and how to allocate it among competing constituencies. Under congressional budgeting rules, many programs are assumed to continue beyond the end of a farm bill. From a budgetary perspective, this provides a baseline for comparing future spending reauthorizations, reallocations to other programs, and reductions to projected spending. Since 2000, congressional goals for the farm bill's budget have varied: The 2002 farm bill increased spending over 10 years, the 2008 farm bill was essentially budget neutral, the 2014 farm bill reduced spending, and the 2018 farm bill is budget neutral, according to the Congressional Budget Office (CBO). The farm bill authorizes programs in two spending categories: mandatory spending and discretionary spending. Mandatory spending is not only authorized but also actually provided via budget enforcement rules. Discretionary spending may be authorized in a farm bill but is not actually provided until budget decisions are made in a future annual appropriations act. The CBO baseline is a projection at a particular point in time of future federal spending on mandatory programs under current law. When a new bill is proposed that would affect mandatory spending, the cost impact (score) is measured in relation to the baseline. Changes that increase spending relative to the baseline have a positive score; those that decrease spending relative to the baseline have a negative score. Federal budget rules such as "PayGo" may require budgetary offsets to balance new spending so that there is no increase in the federal deficit. The April 2018 CBO baseline was the official benchmark to measure changes made by the 2018 farm bill. The five-year baseline was $426 billion over FY2019-FY2023 (what the 2014 farm bill would have spent had it been continued). The budgetary impact of the 2018 farm bill is measured relative to that baseline. Among its impacts are these four points: 1. The enacted farm bill increases net outlays in the first five years by $1.8 billion, which is offset by the same amount of net reductions in outlays during the second five years. Therefore, over 10 years, the net impact is budget neutral. 2. Eight titles in the enacted law have increased outlays over the five-year period, including Farm Commodities, Conservation, Trade, Nutrition, Research, Energy, Horticulture, and Miscellaneous. Two of those titles—Conservation and Nutrition—have reductions in the second five years of the budget window that make them budget neutral over 10 years. 3. Most of the budget reductions at the title level that provide offsets for the increases above, especially in the 10-year budget window, are from changes in the rural development title. 4. The 2018 farm bill provides continuing funding and, in some cases, permanent baseline, for 23 of the 39 so-called programs without baseline from the 2014 farm bill. Projected outlays for the 2018 farm bill at enactment are $428 billion over the FY2019-FY2023 five-year life of the act. The Nutrition title and its largest program, the Supplemental Nutrition Assistance Program (SNAP), account for $326 billion (76%) of those projected outlays. The remaining 24%, $102 billion, is for agricultural programs, mostly in crop insurance (8.9%), farm commodity programs (7.3%), and conservation (6.8%). Other titles of the farm bill account for 1% of the mandatory spending, some of which are funded primarily with discretionary spending. Historical trends in farm bill spending show increased SNAP outlays after the 2009 recession, increased crop insurance outlays based on insurable coverage, farm commodity programs outlays that vary inversely with markets, and steadily increasing conservation program outlays that have leveled off in recent years.
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T he federal government collects various fees and other charges from businesses and households. Choosing to raise public funds via user fees, as opposed to other means such as taxes, has important administrative and economic consequences. Many fees stem from "business-like activities," in which the government provides a service or benefit in return for payment. For example, many n ational p arks charge entry fees , which then help fund maintenance projects. Some fees are closely tied to regulatory or judicial activities, such as filing or inspection fees, which stem from the federal government's sovereign powers. Other federal fees or charges are intragovernmental transactions that do not involve the public. For example, the Office of Personnel Management (OPM) charges other federal agencies fees to cover the cost of background investigations. For many federal agencies, fees or user charges amount to a minimal portion of budgetary resources. Other regulatory agencies, such as the Securities and Exchange Commission (SEC), the Federal Energy Regulatory Commission (FERC), the Patent and Trademark Office (PTO), and the Federal Trade Commission (FTC), are wholly or partially funded by user fees and other nontax receipts. User fees from the public accounted for $331 billion in FY2017, about a tenth of total federal receipts ( $3.32 trillion ). Fees and charges generally result from voluntary choices, such as entering a national park. By contrast, the collection of taxes ultimately relies on the government's sovereign power to compel payments. Fees may not be compulsory, but not paying them may make it impossible to carry out many activities legally. For instance, without paying passport application fees and obtaining a passport, people cannot fly to other countries. Nor can businesses issue securities without paying federal filing fees. The statutory basis for each particular fee or user charge varies in specificity and in the degree of discretion granted to the executive branch. For example, authorizing legislation might specify in detail how certain fees are imposed and how proceeds are used. In other cases, federal agencies rely on broader authorities to impose user fees. User fees have several advantages as a means of financing public activities. They are voluntary, they connect the burden of financing activities to those who directly benefit from them, and they can help decentralize decisionmaking by bypassing centralized allocation of resources. At times, proposals to raise fees may encounter less political resistance than proposals to raise an equivalent sum via taxes. On the other hand, the flow of user fees and charges may reflect fluctuations in economic conditions, which may complicate the financing of government operations. Some are also concerned that funding arrangements may bypass regular congressional scrutiny and dilute Congress's power of the purse. The Government Accountability Office (GAO) defines a user fee as a fee assessed to users for goods or services provided by the federal government. User fees generally apply to federal programs or activities that provide special benefits to identifiable recipients above and beyond what is normally available to the public. The Office of Management and Budget (OMB) defines the term user charge to include transactions not normally considered fees, such as land or asset sales. OMB's budget preparation documents state that user charges include not only proceeds from selling postage stamps, electricity, and Medicare Part B premiums, but also sales of assets and natural resources, among other categories. The federal government, which operates on a modified cash accounting basis, does not recognize in its budgetary accounts the loss of asset values when it sells assets or natural resources, as a private firm would using typical business accounting methods. For instance, if the government were to sell oil at a price of $60 per barrel that it bought at $120 per barrel, only the current revenues would be reflected in budget accounts. A private firm would normally adjust its balance sheet to reflect a loss. OMB designates whether each account receives collections associated with user charges, and that information is contained within OMB's MAX budget data system. OMB has not released data on those designations. The Budget Appendix that OMB issues annually, while not including information on that designation, does present detailed subaccount-level data that often indicate whether a federal program's budgetary resources rely on fee income. The format of the Budget Appendix, however, makes it an impractical source of data for government-wide research. As far as CRS can determine, a comprehensive and authoritative list of federal fees is not publicly available. Budget and financial documents from OMB and the U.S. Treasury, however, do provide detailed information on offsetting collections and offsetting receipts—the budget categories that typically contain user fees and other charges—as well as information on budgetary accounts. In some cases, account descriptions clearly indicate an association with one or more fees. In other cases, however, whether or not an account receives fees is unclear. For example, an account might be labeled as miscellaneous receipts, or as fines, fees, and penalties. User fees classified as offsetting collections, which go into expenditure accounts, generally can be used without further congressional action. Offsetting collections, as the term suggests, typically count as offsets to spending when accounts are scored to check compliance with various budgetary controls. Scorekeeping is the process of measuring the budgetary effects of legislation. For example, the Budget Control Act of 2011 ( P.L. 112-25 ) imposed caps on specified categories of discretionary budget authority. When evaluating compliance with those caps, scorekeepers (CBO, OMB, and the b udget c ommittees) subtract offsetting collections from budget authority totals. User fees or charges are collected into the U.S. Treasury General Fund or into special fund accounts. Offsetting receipts, which go into receipt accounts, typically require approval through appropriations acts. User fees can be classified as discretionary or mandatory spending, depending on how those fees are authorized. Some payments to the federal government, such as electromagnetic spectrum auction proceeds or offshore continental shelf oil and gas leases that are classified as undistributed offsetting receipts, do not offset spending of any agency, but are recorded as reducing the federal deficit. OMB provides a discussion of budget concepts related to offsetting receipts and offsetting collections, which include the bulk of user fees and charges in terms of dollar amounts, in the President's annual budget submission. More detailed supplementary tables that summarize collections of offsetting receipts and offsetting collections are also provided online. The U.S. Treasury's Bureau of the Fiscal Service issues its annual Combined Statement that reports budget data for all federal agencies at an account level as well as detailed summaries of receipts, including user fees. The Monthly Treasury Statement and a quarterly statement of offsetting receipts provide data on an ongoing basis. As the Treasury's role and responsibilities differ from those of OMB, totals from Treasury sources may not coincide with data issued by OMB due to various budgetary reporting adjustments. GAO has analyzed the administration of various user fees and has set out some principles for the design of those fees . User fees, as noted above, can tie benefits enjoyed by households or firms—such as passports, access to national parks, or approvals to raise investment funds from the public—to payments that can help defray public costs of providing them. An economist's rule of thumb known as the benefit principle, which suggests linking the fiscal burden of publicly provided benefits to those who enjoy those benefits, can promote fairness and efficiency. For example, many would contend that those with the opportunity to travel abroad should shoulder more of the costs of reviewing passport applications and issuing documents than those who do not. Moreover, if fees are set at levels that match the incremental cost of providing benefits, then when an agency is called to expand its work—such as an uptick in demand for passports, park visits, or company registrations—then those fees could fund the needed extra resources. Matching fees to incremental costs, however, is difficult where demand is irregular or unpredictable. OMB guidelines on user fees outline aims similar to the benefit principle, mandating that federal agencies ensure that each service, sale, or use of Government goods or resources provided by an agency to specific recipients be self-sustaining; promote efficient allocation of the Nation's resources by establishing charges for special benefits provided to the recipient that are at least as great as costs to the Government of providing the special benefits; and allow the private sector to compete with the Government without disadvantage in supplying comparable services, resources, or goods where appropriate. OMB mandates that agencies review user fees every other year. OMB also encourages agencies seeking new authority to assess fees to "seek to remove restraints on user charges." In some cases, federal agencies and regulated industries negotiate over user fee levels and the improvements in federal regulatory operations supported in large part by those fees. For instance, pharmaceutical companies negotiate with the Food and Drug Administration (FDA) over fees charged to review drug applications. Over time, the scope of FDA activities supported in part by fees has expanded. Some contend that the FDA's increasing reliance on user fees has tilted the agency's priorities toward industry interests and away from consumer protection responsibilities. One 2005 analysis of the FDA drug review process found that approval times decreased after legislation expanded the agency's reliance on user fees, while it found no statistically significant evidence of a decrease in one proxy measure of drug safety. Federal agencies such as the Federal Energy Regulatory Commission (FERC) and the Nuclear Regulatory Commission (NRC) are largely supported from amounts paid by covered industries. The costs and benefits associated with many goods and services mainly involve buyers and sellers. For example, buying a stamp allows a correspondent to mail a letter, which leads the postal service to incur roughly similar costs. Others—at least to a first approximation—are not affected. For other goods, market or market-like transactions may impose costs or convey benefits on third parties. When prices paid by buyers or received by sellers do not reflect spillover costs or benefits to others, economic theory suggests levels of transactions will be inefficient, in the sense that alternative economic arrangements could make all participants—at least potentially—better off. The benefit principle is in some ways similar to the concept of Pigou taxation—that taxing goods linked to negative spillovers, such as pollution, can enhance economic efficiency by diminishing those spillovers. More generally, spillovers are costs borne or benefits enjoyed by one party due to activities of another party where no voluntary exchange or market transaction occurs. Conversely, subsidizing goods or services that provide beneficial spillovers can also increase economic efficiency. For instance, some justify federal tax subsidies to home ownership on the grounds that homeowners generate positive spillovers in their neighborhoods. Charges aimed at limiting negative spillovers are known as Pigou taxes, after the English economist who first articulated the concept. Pigou taxation provides a more narrowly based efficiency rationale for user fees that would limit negative spillovers. Moreover, administering an excise tax imposed on Pigou tax grounds—which would involve a private vendor collecting and remitting tax revenues—differs from user fees and charges collected directly by a government. Nonetheless, the same logic that raising the end-user price of goods linked to negative spillovers can enhance economic efficiency can be applied to the design of user fees. For instance, federal policymakers might choose to charge pharmaceutical companies application fees lower than the full cost of associated approval processes because introducing new drugs onto the market may have wider positive social benefits. The economic suitability of the benefit principle depends on whether the publicly provided benefit has meaningful spillover effects. For example, benefits generated by governments such as national defense or support for basic research are widely shared and thus, arguably, are appropriately supported by general taxation. By contrast, while the broader economy benefits from the ability of firms to raise capital in transparent and competitive markets, the chief beneficiary of having a security offering approved is the issuing firm. Similarly, a family visiting a federal park presumably benefits more than another family that stayed at home. Financing more of park maintenance through general taxation would thus involve an implicit subsidy from nonusers to users, something that reliance on user fees would mitigate. In other cases, the linkage between fees and benefits is not apparent. For example, a 2009 law ( Travel Promotion Act of 2009 , TPA; P.L. 111-145 ) imposed a $10 fee on most international air travelers from visa-waiver countries to fund tourism marketing initiatives . An exact match between the level of user fees and publicly provided benefits may be hard or impossible to determine in many situations. While public corporations operating on a largely commercial basis, such as the Tennessee Valley Authority, may set prices and fees much as a private firm would, many of the federal government's activities are within the public sector because past policymakers considered them to be closely associated with inherently governmental functions—such as providing security—or as services that the private sector would have had trouble providing, such as basic research. The U.S. Postal Service sets rates to cover nearly all of its costs according to a 2006 statutory framework . Subsidized rates for certain classes of mail users, such as the blind, reflect adaptation of pricing schemes to broader social priorities. The proper boundaries between public, private, and nonprofit sectors, of course, is an ongoing concern of policymakers. In many cases, it is difficult to design fees, charges, or taxes that directly influence activities generating negative spillovers. For instance, cars and trucks generate air pollution as well as wear and tear on roadways. Excise taxes on gasoline and other fuels—if set at levels that approximate the costs of pollution and road wear—can motivate drivers to use roads less often when the total costs of driving, including pollution, road wear, and other costs, exceed the benefits of driving. Thus, excise taxes can be a way of using the price mechanism to induce individuals to make decisions that lead to more economically efficient outcomes. Setting excise taxes at levels that reflect all costs to third parties may involve complex estimates. For instance, while higher fuel usage implies greater use of roads and more production of air pollutants, several other factors complicate that linkage. Heavier vehicles may cause disproportionate damage to roads. Vehicles vary widely in fuel efficiency and in the volume of pollutants generated. In addition, driving also imposes congestion costs on other drivers, and those costs vary by location and time of day. One recent analysis estimated that fuel excise taxes addressed less than a third of the air-pollution-related efficiency losses. While excise taxes are a public finance instrument that is distinct from user fees and charges, similar complications may be encountered. In some cases, adopting new fiscal instruments—such as using road charges or tolls—may prove more effective tools in increasing efficiency. In the case of transportation policy, increased economic efficiency, depending on how consumers and policymakers respond, might manifest itself in some combination of higher after-tax incomes, greater provision of publicly provided goods, cleaner air, and less-congested highways. Changes in the design of some user fees or charges might also yield analogous efficiency improvements. Some observers have raised concerns that federal agencies that rely more heavily on user fees may put greater weight on the interests of those paying fees rather than the broader public interest. For instance, the U.S. Patent and Trademark Office charges application and examination fees to those seeking to obtain a patent. Certainly, the applicant would be a central beneficiary of a patent, if granted, although many others—including other inventors, business competitors, and consumers—might also be significantly harmed or benefited. Some contend that the Patent Office's reliance on fees motivates it to approve invalid patents . Tying patent fees narrowly to the benefits obtained by the applicant, while overlooking wider spillover effects, might then result in poor decisions. Of course, nonfinancial policy instruments, such as applicable laws, regulations, or congressional oversight, may affect outcomes more directly. Administrative concerns may also play a role. In some cases, where the costs of collecting fees are high relative to the costs of providing public services, imposing user fees may be a suboptimal choice of funding. For instance, federal courts collect more in PACER fees (which provide access to court documents ) than is needed to maintain the underlying computer system , with excess fees being earmarked for other court improvements. Some argue that funding that system and other court improvements with general revenues would allow broader access to court filings and related public documents, which one proposal ( H.R. 6714 introduced in the 115 th Congress ) would have implemented. Charging access fees above incremental costs—which for electronic documents may be minimal—can limit access to public information. Eliminating PACER user fees , however, may require Congress to shift that fiscal burden elsewhere. Other policy concerns also may play a role. Ability to pay among households varies widely; a national park entrance fee that one family regarded as trivial might deter another family. Policymakers may also wish to express preferences for identifiable groups, such as the elderly, children, or veterans. The classification of fees, charges, taxes, and even negative loan subsidy amounts hinges on budget concepts outlined above along with scorekeeping rules and precedents. In some cases, the distinctions made to categorize a given receipt might seem arbitrary to some. For example, the Travel Promotion Act fees imposed on most international air travelers convey n o special benefit on them, but are not categorized a s tax es . Refundable biofuel tax credits are counted as negative taxes in budget documents rather than as subsidy outlays. Those distinctions, however, can affect the tax treatment of those receipts. For instance, a firm can generally deduct an excise tax from its gross revenues, but typically cannot deduct a fee. Some governments have instituted user fees to fill shortfalls in tax revenues. The economic burden of higher fees or charges might be less obvious and therefore subject to less resistance than broad-based taxes. For example, policymakers in several states have sought to avoid increases in general taxes by increasing fee revenues. That strategy may have two downsides. First, more narrowly focused fees set at higher levels could cause greater economic distortions than smaller taxes applied to a broader base. Second, more narrowly based fees might be less stable in economic downturns. To the extent that fees diverge from the incremental costs of publicly provided services, sudden fiscal adjustments might be required. If benefits from federal operations are distributed narrowly enough to justify financing them via user fees or charges, one might ask whether those activities should be carried out by the private sector. State and local governments and the federal government have privatized many services previously provided by government. Foreign governments have also privatized provision of goods and services once delivered by the public sector. Some activities, however, may involve inherently governmental responsibilities that would be difficult to devolve to the private sector. A 1997 GAO report noted that rigorous evaluations of cost savings of privatization initiatives at the state and local government level were not common. GAO also noted that privatization increased the need for oversight and evaluation, although some local officials deemed that the "weakest link" in privatization initiatives. Others note that while privatization may yield efficiency gains, it may also lead to policy or operational failure. Conflicts between executive branch agencies, which often have sought greater flexibility to use funds to respond to public priorities as they see them, and Congress, which has sought to defend its fiscal prerogatives and ability to set federal policy priorities, are long-standing. In 1849, Congress sought to bolster its powers of the purse by passing the Miscellaneous Receipts Act , which required all government revenues, aside from postal sales, to be deposited into the U.S. Treasury "at as early a day as practicable, without any abatement or deduction on account of salary, fees, costs, charges, expenses, or claim of any description whatever…" Over time, Congress set out exceptions to the modern version of the Miscellaneous Receipts Act that let agencies charge user fees, accept gifts, and collect and retain fines and penalties within specified limits or as detailed in appropriations laws. Some legislative proposals, such as H.R. 850 (115 th Congress) , would eliminate most exceptions and require most fees and charges to be deposited in the U.S. Treasury General Fund. Congress could fund agencies and activities directly through annual appropriations. Funding through lump-sum appropriations, as opposed to via user fees, however, might change incentives facing decisionmakers and could affect federal operations and programmatic outcomes. Congress could constrain agency discretion by requiring more user fee proceeds be either subject to annual appropriations or deposited in the U.S. Treasury General Fund, although that may limit agencies' capacity to respond to new public demands and other changing conditions, as the Government Accountability Office (GAO) has noted . Some inspectors general and congressional committees have also called for tighter, more efficient, and more consistent financial management of user fee funds. During the mid-1980s, Congress, with GAO support, conducted a comprehensive review of so-called "backdoor spending"—an informal term for budget authority provided in laws other than appropriations acts—including spending supported by user fees, which was updated in 1996 . A narrower follow-up in 2017 covering five agencies concluded that "all entities GAO examined have policies and procedures to manage and report on their permanent funding authorities," but that "some, however, could improve practices to manage funds and report information that facilitates oversight." Sweeping changes to the budgetary treatment of user fees, however, could add new pressures on the congressional appropriations process. Proposals to require that most fees be collected into the Treasury General Fund and that activities previously supported by those fees be funded by annual appropriations could create new demands on appropriations committees. Such proposals could also affect the division of responsibilities among authorizing committees and appropriations committees. Statutory texts governing many fees, including those noted above, have evolved over many years and involve substantive policy decisions, often related to industry or programmatic concerns. Congress may also enhance its oversight of agencies reliant on user fees by requiring more timely and detailed financial reports as well as more precise and systematic explanations of linkages between those fees and associated programs. OMB and Treasury issue extensive information on user fees and charges. Nonetheless, the format and level of detail of published data make it difficult to address some government-wide policy questions regarding user fees and charges. Congress could modify laws governing the President's budget submission (31 U.S.C. 1105) to require OMB to release data that it collects on which budget accounts receive material amounts of user fee and user charge revenues. That could allow Congress to track and analyze user fees and charges more easily. In particular, it would also provide a means to distinguish discretionary and mandatory fees and charges, which could be useful in understanding the effects or constraints imposed by budget enforcement measures. That might provide Congress with a clearer view of its fiscal options when considering budgetary measures. Mandating that OMB or other agencies provide more data would probably require additional budgetary resources to cover costs of new personnel and capabilities. Congress can promote economic efficiency and an equitable sharing of public burdens by choosing appropriate means of financing federal operations. User fees and charges, as noted above, can help tie the costs of supporting specific federal operations with those who benefit from them. Even if closely regulated industries may find federal requirements, inspections, or approval processes burdensome, they also presumably benefit from the increased demand for their products that carry the imprimatur of explicit or implicit federal approval. Federal regulation and inspection operations, however, also serve broader interests of consumers, taxpayers, and related industries. To the extent that inherently governmental responsibilities motivate federal operations, the argument for using general revenues may be stronger. If benefits of federal actions are more narrowly distributed, the case for financing operations with user fees or charges may become stronger. Of course, the structure and administration of federal inspection and regulation plays a central role in enhancing efficiency and minimizing burdens borne relative to benefits enjoyed.
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The federal government collects various fees from businesses and households. Choosing to raise public funds via user fees, as opposed to other means such as taxes, has important administrative and economic consequences. Many fees stem from "business-like activities," in which the government provides a service or benefit in return for payment. For example, many national parks charge entry fees, which then help fund maintenance projects. Such fees and charges that result from voluntary choices, such as entering a national park, are distinguished from taxes—which stem from the government's sovereign power to compel payments. The Government Accountability Office (GAO) defines a user fee as a "fee assessed to users for goods or services provided by the federal government. User fees generally apply to federal programs or activities that provide special benefits to identifiable recipients above and beyond what is normally available to the public." User fees and charges have several advantages as a means of financing public activities. They are voluntary, they connect the burden of financing activities to those who directly benefit from them, and can help decentralize decisionmaking by bypassing centralized allocation of resources. Some have expressed concerns that user fee arrangements may bypass regular congressional scrutiny and dilute Congress's power of the purse. Collections of fees and charges may also be more sensitive to economic fluctuations, which could complicate financing of programs dependent on those revenue streams. Many user fees or charges are classified as offsetting collections, which are deposited into expenditure accounts. Offsetting collections can be used to offset agency spending and typically require no further congressional approval to use. Other fees and charges are classified as offsetting receipts, which are collected into revenue accounts and typically require congressional authorization to be spent. User fees and charges can be classified as discretionary or mandatory spending, depending on how they are legally authorized. The levels and administration of some fees are specified in detailed statutory text, while other fees are created under broader agency authorities. Certain agencies, such as the Food and Drug Administration (FDA), have increased their reliance on user fees in past decades. Some critics have raised concerns that increased reliance on user fees could shift incentives facing those agencies. Some legislative proposals, such as H.R. 850 introduced in the 115th Congress, would limit or eliminate most exceptions and require most fees and charges to be deposited in the U.S. Treasury General Fund. Congress could fund agencies and activities now funded in whole or in part via user fees directly through the annual appropriations process. Such proposals would mark a departure from past practice. Statutory text governing many fees has evolved over many years and involves substantive policy decisions, often related to the industry or programmatic concerns. A general change in funding from user fees and charges to annual appropriations would likely shift the division of responsibilities between authorizing committees and appropriations committees. Congress may also enhance its oversight of agencies reliant on user fees by requiring more timely and detailed financial reports as well as more precise and systematic explanations of linkages between those fees and associated programs. Congress could also ask for greater transparency in fiscal data. While the Office of Management and Budget (OMB) and the U.S. Treasury Bureau of the Fiscal Service provide extensive data on user fees and charges, it is difficult to conduct governmentwide analyses using publicly available sources. Congress could mandate more detailed and more easily accessed data on user fees and charges. Additional funding may be needed to develop the capacity to issue those data.
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The U.S. government administers multiple international food assistance programs that aim to alleviate hunger and improve food security in other countries. Some of these programs provide emergency assistance to people affected by conflict or natural disaster. Other programs provide nonemergency assistance to address chronic poverty and hunger, such as providing food to people during a seasonal food shortage or training parents and community health workers in nutrition. Current international food assistance programs originated in 1954 with the passage of the Food for Peace Act (P.L. 83-480), also referred to as P.L. 480 . Historically, the United States has provided international food assistance primarily through in-kind a id , which ships U.S. commodities to countries in need. Congress funds in-kind food aid programs through the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act—known as the Agriculture appropriations bill. In 2010, Congress established the Emergency Food Security Program (EFSP), which provides primarily cash-based food assistance. Cash-based assistance provides recipients with the means to acquire food, including through cash transfers, vouchers, or locally and regionally procured food —food purchased in the country or region where it is to be distributed rather than from the United States. Congress funds EFSP through the International Disaster Assistance (IDA) account in the State, Foreign Operations, and Related Programs (SFOPS) appropriations bill. The IDA account also funds nonfood emergency humanitarian assistance, such as provision of shelter and health services. This report provides a brief overview of the international food aid-related provisions in the FY2018 and FY2019 enacted Agriculture Appropriations Acts—Division A of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) and Division B of the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). It does not cover programs funded through the SFOPS appropriations bill. Congress funds most U.S. international food aid programs with discretionary funding provided through annual appropriations bills. Some international food aid programs receive mandatory funding financed through USDA's Commodity Credit Corporation (CCC) and do not require a separate appropriation. Congress authorizes discretionary and mandatory funding levels for international food aid programs in periodic farm bills, most recently the Agriculture Improvement Act of 2018 ( P.L. 115-334 ). Table 1 lists each international food aid program that receives funding through agriculture appropriations. The Food for Peace Act of 1954 (P.L. 83-480), as amended, authorizes four international food assistance programs. The Agriculture appropriations bill provides discretionary funding for three Food for Peace (FFP) programs—FFP Title I, FFP Title II, and FFP Title V—which are discussed below. 1. FFP Title I provides concessional sales —sales on credit terms below market rates—of U.S. commodities to governments of developing countries and private entities. USDA administers FFP Title I. Congress has not appropriated funds for new FFP Title I sales since FY2006 but continues to appropriate funds to administer the FFP Title I loans provided before FY2006. The appropriation for FFP Title I administrative expenses also funds administrative expenses for the Food for Progress Program, which supports economic development projects. 2. FFP Title II is a donation program under which U.S. agricultural commodities are distributed to recipients in foreign countries. The U.S. Agency for International Development (USAID) administers FFP Title II. Since the mid-1980s, FFP Title II has received the majority of funds appropriated to international food aid in the Agriculture appropriations bill. 3. FFP Title V, also known as the Farmer-to-Farmer Program, finances short-term placements for U.S. volunteers to provide technical assistance to farmers in developing countries. USAID administers the Farmer-to-Farmer Program. The program does not receive direct appropriations, but receives a portion of the total funds appropriated for FFP programs. Statute requires that the program receive the greater of $15 million or 0.6% of the funds annually appropriated for FFP programs. The Agriculture appropriations bill also provides funding for the McGovern-Dole International Food for Education and Child Nutrition Program. This program donates U.S. agricultural commodities to school feeding programs and pregnant or nursing mothers in qualifying countries. Congress has authorized certain U.S. international food aid programs to receive mandatory funding. The Food for Progress Program donates U.S. agricultural commodities to governments or organizations to be monetized —sold on local markets in recipient countries to generate proceeds for economic development projects. Congress has authorized Food for Progress to receive both mandatory and discretionary funding. The program receives discretionary funding for administrative expenses through the appropriation for FFP Title I administrative expenses. The Bill Emerson Humanitarian Trust (BEHT) is a reserve of funds or commodities held by the CCC. USDA can use BEHT funds or commodities to supplement FFP Title II activities, especially when FFP Title II funds alone cannot meet international emergency food needs. If USDA provides aid through BEHT, Congress may appropriate funds to the CCC in a subsequent fiscal year to reimburse the CCC for the value of the released funds or commodities. USDA did not release funds or commodities from BEHT in FY2017 or FY2018, and Congress did not appropriate any BEHT reimbursement funds to the CCC in FY2018 or FY2019. The Trump Administration's FY2018 budget request proposed eliminating McGovern-Dole and FFP Title II and moving funding for international food aid to the IDA account within the SFOPS appropriations bill. The FY2019 budget request repeated the proposed eliminations and reorganization from the FY2018 request. It also contained a new proposal to eliminate Food for Progress. Congress did not adopt the Administration's FY2018 or FY2019 proposals to eliminate FFP Title II, McGovern-Dole, or Food for Progress. This section summarizes the FY2018 and FY2019 Administration's budget requests for U.S. international food aid programs. For FY2018, the Trump Administration requested discretionary funding for one international food aid program account. The Administration requested $149,000 for administrative expenses to carry out Food for Progress projects and existing FFP Title I loans. This amount would have been equal to the FY2017 enacted amount for administrative expenses. The FY2018 request proposed eliminating McGovern-Dole "as part of the Administration's effort to reprioritize Federal spending." The Administration stated that "in the most recent report in 2011, the [Government Accountability Office (GAO)] found weaknesses in performance monitoring, program evaluations, and prompt closeout of agreements." According to the GAO's Recommendations Database, USDA has taken actions to satisfy the three recommendations made in the 2011 audit, and these recommendations have been closed as of July 2015. The Administration also proposed eliminating FFP Title II. The Administration stated: "There is no funding request for [FFP] Title II, as part of an Administration effort to streamline foreign assistance funding, prioritize funding, and use funding as effectively and efficiently as possible. The 2018 request includes funding for emergency food needs within the International Disaster Assistance account." Eliminating FFP Title II would fund the majority of U.S. international food assistance through the IDA account in the SFOPS appropriations rather than shared between IDA and the FFP Title II account in the Agriculture appropriations bill. The IDA account provides funding for EFSP. FFP Title II and EFSP account for the majority of U.S. international food assistance funding, representing 87% of total international food assistance outlays in FY2016. Combined FY2016 outlays for FFP Title II and EFSP totaled $2.730 billion. The Administration's FY2018 SFOPS budget request proposed that $1.511 billion of IDA funds be directed to international food assistance. This amount would have been 45% less than combined FY2016 outlays for FFP Title II and EFSP. In its FY2019 request, the Trump Administration repeated many of its proposals from FY2018, including eliminating McGovern-Dole and FFP Title II. The Administration's FY2019 SFOPS budget request proposed $1.554 billion of IDA funds be used for emergency food assistance. This amount would be 43% less than the combined FY2016 outlays for FFP Title II and EFSP, which totaled $2.730 billion. The Administration also proposed eliminating Food for Progress, a change from its FY2018 budget request. The Administration requested $142,000 for administrative expenses to carry out existing Food for Progress projects and existing FFP Title I loans. This amount is 4.7% less than the $149,000 that Congress enacted for administrative expenses in FY2018. Moving funding from FFP Title II to IDA could potentially change how the United States delivers food aid to recipient countries. Statute requires that nearly all aid distributed under FFP Title II be in-kind aid. EFSP, which Congress funds through the IDA account, does not have a statutory requirement to provide a portion of assistance as in-kind aid. EFSP can provide in-kind aid or cash-based assistance, such as direct cash transfers, vouchers, or locally and regionally procured food. Shifting international food aid funding from FFP Title II to IDA could increase the portion of food assistance provided as cash-based assistance rather than in-kind aid. Proposals to shift U.S. international food assistance funding from in-kind food aid to cash-based food assistance are not new. Both the Obama and George W. Bush Administrations proposed increasing the portion of U.S. international food aid delivered as cash-based assistance. Some proponents of increasing the use of cash-based assistance argue that it could improve program efficiency. However, some interested parties assert that the Trump Administration's proposed decrease in overall funding for international food assistance could result in fewer people receiving assistance and therefore counteract potential efficiency gains. Some opponents of increasing the share of food assistance that is cash-based rather than in-kind maintain that in-kind aid ensures that the United States provides high-quality food to recipients. Some opponents also assert that increasing the use of cash-based assistance could diminish support for international food aid programs among certain stakeholders, such as selected agricultural commodity groups, and potentially some lawmakers. Both the FY2018 and FY2019 Agriculture Appropriations Acts provided funding for U.S. international food aid programs in the Foreign Assistance and Related Programs (Title V) and General Provisions (Title VII) titles. This included funding for FFP Title II and McGovern-Dole. The acts also provided funding for administrative expenses to manage existing FFP Title I loans that originated while the FFP Title I program was active. The FY2019 act also provided funding for the Food for Progress program, which typically receives only mandatory funding. Figure 1 shows funding trends for international food aid programs funded through Agriculture appropriations bills for FY2013-FY2019. The FY2018 Agriculture Appropriations Act (Division A of P.L. 115-141 ) provided $1.924 billion for international food aid programs, a 7% increase from the FY2017 enacted total of $1.802 billion ( Table 2 ). The FY2018 total was also an increase from the FY2018 Senate-passed ($1.807 billion) and House-passed ($1.602 billion) Agriculture appropriations bills. Congress did not adopt the Administration's FY2018 proposals to eliminate FFP Title II or McGovern-Dole. The FY2018 act provided $1.716 billion for FFP Title II, a 7% increase from the $1.6 billion provided in FY2017 Agriculture appropriations. In FY2017, Congress directed $300 million of IDA funds in SFOPS appropriations be transferred to the FFP Title II account in Agriculture appropriations ( P.L. 115-31 , Division J, §8005(a)(1)(A)). When including this transfer of funds, FFP Title II received a total of $1.9 billion in funding in FY2017. Total FFP Title II funding of $1.716 in FY2018 would represent a 10% decrease from the FY2017 total of $1.9 billion. FY2018 enacted funding of $1.716 billion for FFP Title II includes $1.6 billion provided in the Foreign Assistance title and $116 million provided in the General Provisions title of the Agriculture Appropriations Act. The funding Congress provides in the Foreign Assistance title is a base amount that is often compared across fiscal years to determine whether program funding has increased or decreased. Providing additional FFP Title II funding in the General Provisions title effectively increases funding available for FFP Title II in a given fiscal year without increasing base funding in the Foreign Assistance title. The FY2018 act also provided $207.6 million for McGovern-Dole, a 3% increase from the $201.6 million that Congress provided in FY2017. Congress directed that $10 million of McGovern-Dole funding be made available for local and regional procurement (LRP), a $5 million increase from the $5 million set-aside for LRP in FY2017. The FY2018 act also provided $149,000 for FFP Title I and Food for Progress administrative expenses, which was unchanged from the amount enacted for FY2017. The FY2019 Agriculture Appropriations Act (Division B of P.L. 116-6 ) provides $1.942 billion in total funding for international food aid programs, a 1% increase from the FY2018 enacted amount of $1.924 billion. The enacted total for FY2019 is also an increase from the FY2019 Senate-passed ($1.926 billion) and House-reported ($1.743 billion) Agriculture appropriations bills. Congress did not adopt the Administration's FY2019 proposals to eliminate FFP Title II, McGovern-Dole, or Food for Progress. The FY2019 act provides $1.716 billion for FFP Title II, equal to the FY2018 enacted amount. This includes $1.5 billion in the Foreign Assistance title and an additional $216 million in the General Provisions title. The act also provides $210.3 million for McGovern-Dole, a 1% increase from the $207.6 million provided in FY2018. The FY2019 act also directs $15 million of McGovern-Dole funding be made available for LRP, a $5 million increase from the $10 million set-aside for LRP in FY2018. The FY2019 act provides $142,000 for FFP Title I and Food for Progress administrative expenses, a 5% decrease from the FY2018 enacted amount of $149,000. The act also provides $16 million for Food for Progress in the General Provisions title, including $6 million in discretionary appropriations and a $10 million Change in Mandatory Program Spending (CHIMP) increase. The FY2019 conference report states that "this increase is a restoration of funding from reductions occurring in prior years and does not indicate support for expanding or continuing the practice of monetization in food aid programs." The FY2019 House-reported bill would have provided $35 million for Food for Progress. Neither the FY2018 act, the FY2019 Administration's budget request, nor the FY2019 Senate-passed bill included discretionary funding for Food for Progress. Food for Progress has not typically received discretionary appropriations; rather it has relied entirely on mandatory funding delivered through the CCC. Table 2 details appropriations for international food aid programs for FY2017-FY2019, including proposed funding levels in the Administration's FY2018 and FY2019 budget requests and in the House and Senate Agriculture appropriations bills for FY2018 and FY2019. In addition to providing funding, the agriculture appropriations bill may contain policy-related provisions that direct how the executive branch should spend certain funds. Provisions included in appropriations bill text have the force of law but generally only for the duration of the fiscal year for which the bill provides appropriations. Policy-related provisions generally do not amend the U.S. Code . Table 3 compares select policy-related provisions pertaining to U.S. international food aid programs from the Foreign Assistance and Related Programs (Title V) and General Provisions (Title VII) titles of the FY2018 and FY2019 Agriculture Appropriations Acts. The explanatory statement that accompanies the appropriations act, as well as the committee reports that accompany the House and Senate committee-reported bills, can provide statements of support for certain programs or directions to federal agencies on how to spend certain funding provided in the appropriations bill. While these documents do not have the force of law, they can express congressional intent. The committee reports and explanatory statement may need to be read together to capture all of the congressional intent for a given fiscal year. Table 4 compares selected policy-related provisions pertaining to U.S. international food aid programs from the FY2018 and FY2019 House and Senate committee reports and explanatory statement for the FY2019 Agriculture Appropriations Act. The FY2018 column includes references to the House (H) and Senate (S) committee reports to allow for consideration of congressional intent. The explanatory statement for the FY2018 Agriculture Appropriations Act did not contain policy-related provisions pertaining to U.S. international food aid programs.
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The Agriculture appropriations bill—formally known as the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act—funds the U.S. Department of Agriculture (USDA) except for the Forest Service. This includes funding for certain U.S. international food aid programs. In March 2018, President Trump signed the Consolidated Appropriations Act, 2018 (P.L. 115-141), an omnibus appropriations act for FY2018, into law. In February 2019, President Trump signed the Consolidated Appropriations Act, 2019 (P.L. 116-6), an omnibus appropriations act for FY2019, into law. The FY2018 and FY2019 Agriculture Appropriations Acts—Division A of P.L. 115-141 and Division B of P.L. 116-6, respectively—include funding for certain U.S. international food aid programs, such as the Food for Peace (FFP) Title II Program and the McGovern-Dole International Food for Education and Child Nutrition Program. Other international food aid programs receive mandatory funding and do not rely on discretionary funding provided through annual appropriations. Congress authorizes discretionary and mandatory funding levels for international food aid programs in periodic farm bills, most recently the Agriculture Improvement Act of 2018 (P.L. 115-334). This analysis covers appropriations for U.S. international food aid programs that Congress funds through agriculture appropriations bills. It does not cover appropriations for international food assistance or agricultural development programs that Congress funds in State, Foreign Operations, and Related Programs (SFOPS) appropriations bills, such as the Emergency Food Security Program (EFSP) or the Feed the Future Program. In FY2018, Congress provided a total of $1.924 billion in funding for U.S. international food aid programs, a 7% increase from the $1.802 billion provided in FY2017. In FY2019, Congress provided $1.942 billion in funding for U.S. international food aid programs, a 1% increase from FY2018 enacted levels. In addition to providing funding for U.S. international food aid programs, agriculture appropriations bills may also include policy-related provisions that direct how the executive branch should carry out certain appropriations. The FY2018 and FY2019 Agriculture Appropriations Acts, as well as House and Senate Agriculture appropriations bills for those fiscal years, include policy provisions related to international food aid programs. For example, one provision directs that a certain amount of the funds appropriated for the McGovern-Dole Program be used to provide locally and regionally procured food assistance—food assistance purchased in the country or region where it is to be distributed rather than in the United States.
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The 116 th Congress may consider a variety of housing-related issues. These may involve assisted housing programs, such as those administered by the Department of Housing and Urban Development (HUD), and issues related to housing finance, among other things. Specific topics of interest may include ongoing issues such as interest in reforming the nation's housing finance system, how to prioritize appropriations for federal housing programs in a limited funding environment, oversight of the implementation of changes to certain housing programs that were enacted in prior Congresses, and the possibility of extending certain temporary housing-related tax provisions. Additional issues may emerge as the Congress progresses. This report provides a high-level overview of the most prominent housing-related issues that may be of interest during the 116 th . It is meant to provide a broad overview of major issues and is not intended to provide detailed information or analysis. However, it includes references to more in-depth CRS reports on these issues where possible. This section provides background on housing and mortgage market conditions to provide context for the housing policy issues discussed in the remainder of the report. This discussion of market conditions is at the national level. However, it is important to be aware that local housing market conditions can vary dramatically, and national housing market trends may not reflect the conditions in a specific area. Nevertheless, national housing market indicators can provide an overall sense of general trends in housing. In general, rising home prices, relatively low interest rates, and rising rental costs have been prominent features of housing and mortgage markets in recent years. Although interest rates have remained low, rising house prices and rental costs that in many cases have outpaced income growth have led to increased concerns about housing affordability for both prospective homebuyers and renters. Most homebuyers take out a mortgage to purchase a home. Therefore, owner-occupied housing markets and the mortgage market are closely linked, although they are not the same. The ability of prospective homebuyers to obtain mortgages, and the costs of those mortgages, impact housing demand and affordability. The following subsections show current trends in selected owner-occupied housing and mortgage market indicators. As shown in Figure 1 , nationally, nominal house prices have been increasing on a year-over-year basis in each quarter since the beginning of 2012, with year-over-year increases exceeding 5% for much of that time period and exceeding 6% for most quarters since mid-2016. These increases follow almost five years of house price declines in the years during and surrounding the economic recession of 2007-2009 and associated housing market turmoil. House price increases slowed somewhat during 2018, but year-over-year house prices still increased by nearly 6% during the fourth quarter of 2018. House prices, and changes in house prices, vary greatly across local housing markets. Some areas of the country are experiencing rapid increases in house prices, while other areas are experiencing slower or stagnating house price growth. Similarly, prices have fully regained or even exceeded their pre-recession levels in nominal terms in many parts of the country, but in other areas prices remain below those levels. House price increases affect participants in the housing market differently. Rising prices reduce affordability for prospective homebuyers, but they are generally beneficial for current homeowners due to the increased home equity that accompanies them (although rising house prices also have the potential to negatively impact affordability for current homeowners through increased property taxes). For several years, mortgage interest rates have been low by historical standards. Lower interest rates increase mortgage affordability and make it easier for some households to purchase homes or refinance their existing mortgages. As shown in Figure 2 , average mortgage interest rates have been consistently below 5% since May 2010 and have been below 4% for several stretches during that time. After starting to increase somewhat in late 2017 and much of 2018, mortgage interest rates showed declines at the end of 2018 into early 2019. The average mortgage interest rate for February 2019 was 4.37%, compared to 4.46% in the previous month and 4.33% a year earlier. House prices have been rising for several years on a national basis, and mortgage interest rates, while still low by historical standards, have also risen for certain stretches. While incomes have also been rising in recent years, helping to mitigate some affordability pressures, on the whole house price increases have outpaced income increases. These trends have led to increased concerns about the affordability of owner-occupied housing. Despite rising house prices, many metrics of housing affordability suggest that owner-occupied housing is currently relatively affordable. These metrics generally measure the share of income that a median-income family would need to qualify for a mortgage to purchase a median-priced home, subject to certain assumptions. Therefore, rising incomes and, especially, interest rates that are still low by historical standards contribute to monthly mortgage payments being considered affordable under these measures despite recent house price increases. However, some factors that affect housing affordability may not be captured by these metrics. For example, several of the metrics are based on certain assumptions (such as a borrower making a 20% down payment) that may not apply to many households. Furthermore, because they typically measure the affordability of monthly mortgage payments, they often do not take into account other affordability challenges that homebuyers may face, such as affording a down payment and other upfront costs of purchasing a home (costs that generally increase as home prices rise). Other factors—such as the ability to qualify for a mortgage, the availability of homes on the market, and regional differences in house prices and income—may also make homeownership less attainable for some households. Some of these factors may have a bigger impact on affordability for specific demographic groups, as income trends and housing preferences are not uniform across all segments of the population. Given that house price increases are showing some signs of slowing and interest rates have remained low, the affordability of owner-occupied homes may hold steady or improve. Such trends could potentially impact housing market activity, including home sales. In general, annual home sales have been increasing since 2014 and have improved from their levels during the housing market turmoil of the late 2000s, although in 2018 the overall number of home sales declined from the previous year. While home sales have been improving somewhat in recent years (prior to falling in 2018), the supply of homes on the market has generally not been keeping pace with the demand for homes, thereby limiting home sales activity and contributing to house price increases. Home sales include sales of both existing and newly built homes. Existing home sales generally number in the millions each year, while new home sales are usually in the hundreds of thousands. Figure 3 shows the annual number of existing and new home sales for each year from 1995 through 2018. Existing home sales numbered about 5.3 million in 2018, a decline from 5.5 million in 2017 (existing home sales in 2017 were the highest level since 2006). New home sales numbered about 622,000 in 2018, an increase from 614,000 in 2017 and the highest level since 2007. However, the number of new home sales remains appreciably lower than in the late 1990s and early 2000s, when they tended to be between 800,000 and 1 million per year. The number and types of homes on the market affect home sales and home prices. On a national basis, the supply of homes on the market has been relatively low in recent years, and in general new construction has not been creating enough new homes to meet demand. However, as noted previously, national housing market indicators are not necessarily indicative of local conditions. While many areas of the country are experiencing low levels of housing inventory that contribute to higher home prices, other areas, particularly those experiencing population declines, face a different set of housing challenges, including surplus housing inventory and higher levels of vacant homes. On a national basis, the inventory of homes on the market has been below historical averages in recent years, though the inventory, of new homes in particular, has begun to increase somewhat of late. Homes come onto the market through the construction of new homes and when current homeowners decide to sell their existing homes. Existing homeowners' decisions to sell their homes can be influenced by expectations about housing inventory and affordability. For example, current homeowners may choose not to sell if they are uncertain about finding new homes that meet their needs, or if their interest rates on new mortgages would be substantially higher than the interest rates on their current mortgages. New construction activity is influenced by a variety of factors including labor, materials, and other costs as well as the expected demand for new homes. One measure of the amount of new construction is housing starts. Housing starts are the number of new housing units on which construction is started in a given period and are typically reported monthly as a "seasonally adjusted annual rate." This means that the number of housing starts reported for a given month (1) has been adjusted to account for seasonal factors and (2) has been multiplied by 12 to reflect what the annual number of housing starts would be if the current month's pace continued for an entire year. Figure 4 shows the seasonally adjusted rate of starts on one-unit homes for each month from January 1995 through December 2018. Housing starts for single-family homes fell during the housing market turmoil, reflecting decreased home purchase demand. In recent years, levels of new construction have remained relatively low by historical standards, reflecting a variety of considerations including labor shortages and the cost of building. Housing starts have generally been increasing since about 2012, but remain well below their levels from the late 1990s through the mid-2000s. For 2018, the seasonally adjusted annual rate of housing starts averaged about 868,000. In comparison, the seasonally adjusted annual rate of housing starts exceeded 1 million from the late 1990s through the mid-2000s. Furthermore, high housing construction costs have led to a greater share of new housing being built at the more expensive end of the market. To the extent that new homes are concentrated at higher price points, supply and price pressures may be exacerbated for lower-priced homes. When a lender originates a mortgage, it can choose to hold that mortgage in its own portfolio, sell it to a private company, or sell it to Fannie Mae or Freddie Mac, two congressionally chartered government-sponsored enterprises (GSEs). Fannie Mae and Freddie Mac bundle mortgages into securities and guarantee investors' payments on those securities. Furthermore, a mortgage might be insured by a federal government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Most FHA-insured or VA-guaranteed mortgages are included in mortgage-backed securities that are guaranteed by Ginnie Mae, another government agency. The shares of mortgages that are provided through each of these channels may be relevant to policymakers because of their implications for mortgage access and affordability as well as the federal government's exposure to risk. As shown in Figure 5 , during the first three quarters of 2018, about two-thirds of the total dollar volume of mortgages originated was either backed by Fannie Mae or Freddie Mac (45%) or guaranteed by a federal agency such as FHA or VA (22%). Nearly one-third of the dollar volume of mortgages originated was held in bank portfolios, while close to 2% was included in a private-label security without government backing. The shares of mortgage originations backed by Fannie Mae and Freddie Mac and held in bank portfolios are roughly similar to their respective shares in the early 2000s. The share of private-label securitization has been, and continues to be, very small since the housing market turmoil of the late 2000s, while the FHA/VA share is higher than it was in the early and mid-2000s. The share of mortgages insured by FHA or guaranteed by VA was low by historical standards during that time period as many households opted for other types of mortgages, including subprime mortgages. As has been the case in owner-occupied housing markets, affordability has been a prominent concern in rental markets in recent years. In the years since the housing market turmoil of the late 2000s, the number and share of renter households has increased, leading to lower rental vacancy rates and higher rents in many markets. The housing and mortgage market turmoil of the late 2000s led to a substantial decrease in the homeownership rate and a corresponding increase in the share of households who rent their homes. As shown in Figure 6 , the share of renters increased from about 31% in 2005 and 2006 to a high of about 36.6% in 2016, before decreasing slightly to 36.1% in 2017 and continuing to decline to 35.6% in 2018. The homeownership rate correspondingly fell from a high of 69% in the mid-2000s to 63.4% in 2016, before rising to 63.9% in 2017 and continuing to rise to 64.4% in 2018. The overall number of occupied housing units also increased over this time period, from nearly 110 million in 2006 to 121 million in 2018; most of this increase has been in renter-occupied units. The number of renter-occupied units increased from about 34 million in 2006 to about 43 million in 2018. The number of owner-occupied housing units fell from about 75 million units in 2006 to about 74 million in 2014, but has since increased to about 78 million units in 2018. The higher number and share of renter households has had implications for rental vacancy rates and rental housing costs. More renter households increases competition for rental housing, which may in turn drive up rents if there is not enough new rental housing created (whether through new construction or conversion of owner-occupied units to rental units) to meet the increased demand. As shown in Figure 7 , the rental vacancy rate has generally declined in recent years and was under 7% at the end of 2018. Rental housing affordability is impacted by a variety of factors, including the supply of rental housing units available, the characteristics of those units (e.g., age and amenities), and the demand for available units. New housing units have been added to the rental stock in recent years through both construction of new rental units and conversions of existing owner-occupied units to rental housing. However, the supply of rental housing has not necessarily kept pace with the demand, particularly among lower-cost rental units, and low vacancy rates have been especially pronounced in less-expensive units. The increased demand for rental housing, as well as the concentration of new rental construction in higher-cost units, has led to increases in rents in recent years. Median renter incomes have also been increasing for the last several years, at times outpacing increases in rents. However, over the longer term, median rents have increased faster than renter incomes, reducing rental affordability. Rising rental costs and renter incomes that are not keeping up with rent increases over the long term can contribute to housing affordability problems, particularly for households with lower incomes. Under one common definition, housing is considered to be affordable if a household is paying no more than 30% of its income in housing costs. Under this definition, households that pay more than 30% are considered to be cost-burdened, and those that pay more than 50% are considered to be severely cost-burdened. The overall number of cost-burdened renter households has increased from 14.8 million in 2001 to 20.5 million in 2017, although the 20.5 million in 2017 represented a decrease from 20.8 million in 2016 and over 21 million in 2014 and 2015. (Over this time period, the overall number of renter households has increased as well.) While housing cost burdens can affect households of all income levels, they are most prevalent among the lowest-income households. In 2017, 83% of renter households with incomes below $15,000 experienced housing cost burdens, and 72% experienced severe cost burdens. A shortage of lower-cost rental units that are both available and affordable to extremely low-income renter households (households that earn no more than 30% of area median income), in particular, contributes to these cost burdens. A variety of housing-related issues may be of interest to the 116 th Congress, including housing finance, housing assistance programs, and housing-related tax provisions, among other things. Many of these are ongoing or perennial housing-related issues, though additional issues may emerge as the Congress progresses. Two major players in the U.S. housing finance system are Fannie Mae and Freddie Mac, government-sponsored enterprises (GSEs) that were created by Congress to provide liquidity to the mortgage market. By law, Fannie Mae and Freddie Mac cannot make mortgages; rather, they are restricted to purchasing mortgages that meet certain requirements from lenders. Once the GSEs purchase a mortgage, they either package it with others into a mortgage-backed security (MBS), which they guarantee and sell to institutional investors (which can be the mortgage originator), or retain it as a portfolio investment. Fannie Mae and Freddie Mac are involved in both single-family and multifamily housing, though their single-family businesses are much larger. In 2008, in the midst of housing and mortgage market turmoil, Fannie Mae and Freddie Mac experienced financial trouble and entered voluntary conservatorship overseen by their regulator, the Federal Housing Finance Agency (FHFA). As part of the legal arrangements of this conservatorship, the Department of the Treasury contracted to purchase a maximum of $200 billion of new senior preferred stock from each of the GSEs; in return for this support, Fannie Mae and Freddie Mac pay dividends on this stock to Treasury. These funds become general revenues. Several issues related to Fannie Mae and Freddie Mac could be of interest to the 116 th Congress. These include the potential for legislative housing finance reform, new leadership at FHFA and the potential for administrative changes to Fannie Mae and Freddie Mac, and certain issues that could affect Fannie Mae's and Freddie Mac's finances and mortgage standards, respectively. For more information on Fannie Mae and Freddie Mac, see CRS Report R44525, Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions . Since Fannie Mae and Freddie Mac entered conservatorship in 2008, policymakers have largely agreed on the need for comprehensive housing finance reform legislation that would resolve the conservatorships of these GSEs and address the underlying issues that are perceived to have led to their financial trouble and conservatorships. Such legislation could eliminate Fannie Mae and Freddie Mac, possibly replacing them with other entities; retain the companies but transform their role in the housing finance system; or return them to their previous status with certain changes. In addition to addressing the role of Fannie Mae and Freddie Mac, housing finance reform legislation could potentially involve changes to the Federal Housing Administration (FHA) or other federal programs that support the mortgage market. While there is generally broad agreement on certain principles of housing finance reform—such as increasing the private sector's role in the mortgage market, reducing government risk, and maintaining access to affordable mortgages for creditworthy households—there is disagreement over how best to achieve these objectives and over the technical details of how a restructured housing finance system should operate. Since 2008, a variety of housing finance reform proposals have been put forward by Members of Congress, think tanks, and industry groups. Proposals differ on structural questions as well as on specific implementation issues, such as whether, and how, certain affordable housing requirements that currently apply to Fannie Mae and Freddie Mac would be included in a new system. Previous Congresses have considered housing finance reform legislation in varying degrees. In the 113 th Congress, the House Committee on Financial Services and Senate Committee on Banking, Housing, and Urban Affairs considered different versions of comprehensive housing finance reform legislation, but none were ultimately enacted. The 114 th Congress considered a number of more-targeted reforms to Fannie Mae and Freddie Mac, but did not actively consider comprehensive housing finance reform legislation. At the end of the 115 th Congress, the House Committee on Financial Services held a hearing on a draft housing finance reform bill released by then-Chairman Jeb Hensarling and then-Representative John Delaney, but no further action was taken on it. In the 116 th Congress, Senate Committee on Banking, Housing, and Urban Affairs Chairman Mike Crapo has released an outline for potential housing finance reform legislation. The committee held hearings on March 26 and March 27, 2019 on the outline. FHFA, an independent agency, is the regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System as well as the conservator for Fannie Mae and Freddie Mac. The director of FHFA is appointed by the President, subject to Senate confirmation, for a five-year term. The term of FHFA Director Mel Watt expired in January 2019. President Trump nominated Mark Calabria to be the next FHFA director. The Senate confirmed the nomination on April 4, 2019, and Dr. Calabria was sworn in on April 15, 2019. FHFA has relatively wide latitude to make many changes to Fannie Mae's and Freddie Mac's operations without congressional approval, though it is subject to certain statutory constraints. In recent years, for example, FHFA has directed Fannie Mae and Freddie Mac to engage in risk-sharing transactions, develop a common securitization platform for issuing mortgage-backed securities, and undertake certain pilot programs. The prospect of new leadership at FHFA led many to speculate about possible administrative changes that FHFA could make to Fannie Mae and Freddie Mac going forward. Any such changes could potentially lead to congressional interest and oversight. FHFA could make many changes to Fannie Mae and Freddie Mac, including changes to the pricing of mortgages they purchase, to their underwriting standards, or to certain product offerings. It could also make changes to pilot programs, start laying the groundwork for a post-conservatorship housing finance system, or take a different implementation approach to certain affordable housing initiatives required by statute, such as Duty to Serve requirements. Because the new FHFA director has been critical of certain aspects of Fannie Mae and Freddie Mac in the past, some have expressed concerns that the new leadership could result in the agency taking steps to reduce Fannie Mae's and Freddie Mac's role in the mortgage market. In March 2019, nearly 30 industry groups sent a letter to Acting Director Otting urging that FHFA proceed cautiously with any administrative changes to ensure that they do not disrupt the mortgage market. That same month, President Trump issued a memorandum directing the Secretary of the Treasury to work with other executive branch agencies to develop a plan to end the GSEs' conservatorship, among other goals. Certain other issues related to Fannie Mae and Freddie Mac may be of interest during the 116 th Congress. A new accounting standard (current expected credit loss, or CECL) that could require the GSEs to increase their loan loss reserves goes into effect in 2020. CECL could result in Fannie Mae and Freddie Mac needing to draw on their support agreements with Treasury. The Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ) requires mortgage lenders to document and verify a borrower's ability to repay (ATR). If a mortgage lacks certain risky features and a lender complies with the ATR regulations, the mortgage is considered to be a qualified mortgage (QM), which provides the lender certain protections against lawsuits claiming that the ATR requirements were not met. Mortgages purchased by Fannie Mae or Freddie Mac currently have an exemption (known as the QM Patch) from the debt-to-income ratio ATR rule. This exemption expires in early 2021 (or earlier if Fannie Mae and Freddie Mac exit conservatorship before that date). For several years, concern in Congress about federal budget deficits has led to increased interest in reducing the amount of discretionary funding provided each year through the annual appropriations process. This interest manifested most prominently in the enactment of the Budget Control Act of 2011( P.L. 112-25 ), which set enforceable limits for both mandatory and discretionary spending. The limits on discretionary spending, which have been amended and adjusted since they were first enacted, have implications for HUD's budget, the largest source of funding for direct housing assistance, because it is made up almost entirely of discretionary appropriations. In FY2020, the discretionary spending limits are slated to decrease, after having been increased in FY2018 and FY2019 by the Bipartisan Budget Act of FY2018 (BBA; P.L. 115-123 ). The nondefense discretionary cap (the one relevant for housing programs and activities) will decline by more than 9% in FY2020, absent any additional legislative changes. More than three-quarters of HUD's appropriations are devoted to three rental assistance programs serving more than 4 million families: the Section 8 Housing Choice Voucher (HCV) program, Section 8 project-based rental assistance, and the public housing program. Funding for the HCV program and project-based rental assistance has been increasing in recent years, largely because of the increased costs of maintaining assistance for households that are currently served by the programs. Public housing has, arguably, been underfunded (based on studies undertaken by HUD of what it should cost to operate and maintain it) for many years. Despite the large share of total HUD funding these rental assistance programs command, their combined funding levels only permit them to serve an estimated one in four eligible families, which creates long waiting lists for assistance in most communities. A similar dynamic plays out in the U.S. Department of Agriculture's Rural Housing Service budget. Demand for housing assistance exceeds the supply of subsidies, yet the vast majority of the RHS budget is devoted to maintaining assistance for current residents. In a budget environment with limits on discretionary spending, the pressure to provide increased funding to maintain current services for existing rental assistance programs must be balanced against the pressure from states, localities, and advocates to maintain or increase funding for other popular programs, such as HUD's Community Development Block Grant (CDBG) program, grants for homelessness assistance, and funding for Native American housing. The Trump Administration's budget request for FY2020 proposes an 18% decrease in funding for HUD's programs and activities as compared to the prior year. It proposes to eliminate funding for several programs, including multiple HUD grant programs (CDBG, the HOME Investment Partnerships Program, and the Self-Help and Assisted Homeownership Opportunity Program (SHOP)), and to decrease funding for most other HUD programs. In proposing to eliminate the grant programs, the Administration cites budget constraints and proposes that state and local governments take on more of a role in the housing and community development activities funded by these programs. Additionally, the budget references policy changes designed to reduce the cost of federal rental assistance programs, including the Making Affordable Housing Work Act of 2018 (MAHWA) legislative proposal, released by HUD in April 2018. If enacted, the proposal would make a number of changes to the way tenant rents are calculated in HUD rental assistance programs, resulting in rent increases for assisted housing recipients, and corresponding decreases in the cost of federal subsidies. Further, it would permit local program administrators or property owners to institute work requirements for recipients. In announcing the proposal, HUD described it as setting the programs on "a more fiscally sustainable path," creating administrative efficiency, and promoting self-sufficiency. Low-income housing advocates have been critical of it, particularly the effect increased rent payments may have on families. Beyond HUD, the Administration's FY2020 budget request for USDA's Rural Housing Service would eliminate funding for most rural housing programs, except for several loan guarantee programs. It would continue to provide funding to renew existing rental assistance, but also proposes a new minimum rent policy for tenants designed to help reduce federal subsidy costs. For more on HUD appropriations trends in general, see CRS Report R42542, Department of Housing and Urban Development (HUD): Funding Trends Since FY2002 . For more on the FY2020 budget environment, including discretionary spending caps, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions . Several pieces of assisted housing legislation that were enacted in prior Congresses are expected to be implemented during the 116 th Congress. In the FY2016 HUD appropriations law, Congress mandated that HUD expand the Moving to Work (MTW) demonstration by 100 public housing authorities (PHAs). MTW is a waiver program that allows a limited number of participating PHAs to receive exceptions from HUD for most of the rules and regulations governing the public housing and voucher programs. MTW has been controversial for many years, with PHAs supporting the flexibility it provides (e.g., allowing PHAs to move funding between programs), and low-income housing advocates criticizing some of the policies being adopted by PHAs (e.g., work requirements and time limits). Most recently, GAO issued a report raising concerns about HUD's oversight of MTW, including the lack of monitoring of the effects of policy changes under MTW on tenants. HUD was required to phase in the FY2016 expansion and evaluate any new policies adopted by participating PHAs. Following a series of listening sessions and advisory committee meetings, and several solicitations for comment, HUD issued a solicitation of interest for the first two expansion cohorts in December 2018. As of the date of this report, no selections had yet been made for those cohorts. The Rental Assistance Demonstration (RAD) was an Obama Administration initiative initially designed to test the feasibility of addressing the estimated $25.6 billion backlog in unmet capital needs in the public housing program by allowing local PHAs to convert their public housing properties to either Section 8 Housing Choice Vouchers or Section 8 project-based rental assistance. PHAs are limited in their ability to mortgage, and thus raise private capital for, their public housing properties because of a federal deed restriction placed on the properties as a condition of federal assistance. When public housing properties are converted under RAD, that deed restriction is removed. As currently authorized, RAD conversions must be cost-neutral, meaning that the Section 8 rents the converted properties may receive must not result in higher subsidies than would have been received under the public housing program. Given this restriction, and without additional subsidy, not all public housing properties can use a conversion to raise private capital, potentially limiting the usefulness of a conversion for some properties. While RAD conversions have been popular with PHAs, and HUD's initial evaluations of the program have been favorable, a recent GAO study has raised questions about HUD's oversight of RAD, and about how much private funding is actually being raised for public housing through the conversions. RAD, as first authorized by Congress in the FY2012 HUD appropriations law, was originally limited to 60,000 units of public housing (out of roughly 1 million units). However, Congress has since expanded the demonstration. Most recently, in FY2018, Congress raised the cap so that up to 455,000 units of public housing will be permitted to convert to Section 8 under RAD, and it further expanded the program so that Section 202 Housing for the Elderly units can also convert. Not only is HUD currently implementing the FY2018 expansion, but the President's FY2020 budget request to Congress requests that the cap on public housing RAD conversions be eliminated completely. Several major disasters that have recently affected the United States have led to congressional activity related to disaster response and recovery programs. When such incidents occur, the President may authorize an emergency or major disaster declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act; P.L. 93-288 , as amended), making various housing assistance programs, including programs provided by the Federal Emergency Management Agency (FEMA) , available to disaster survivors. FEMA-provided housing assistance may include short-term, emergency sheltering accommodations under Section 403—Essential Assistance—of the Stafford Act (e.g., the Transitional Sheltering Assistance (TSA) program, which is intended to provide short-term hotel/motel accommodations). Interim housing needs may be met through the Individuals and Households Program (IHP) under Section 408—Federal Assistance to Individuals and Households—of the Stafford Act. IHP assistance may include financial (e.g., assistance to rent alternate housing accommodations ) and/or direct assistance (e.g., multi family lease and repair , Transportable Temporary Housing Units , or direct lease ) to eligible individuals and households who, as a result of an emergency or disaster, have uninsured or under-insured necessary expenses and serious needs that cannot be met through other means or forms of assistance. IHP assistance is intended to be temporary and is generally limited to a period of 18 months following the date of the declaration , but it may be extended by FEMA. The Disaster Recovery Reform Act of 2018 (DRRA, Division D of P.L. 115-254 ), which became law on October 5, 2018, is the most comprehensive reform of FEMA's disaster assistance programs since the passage of the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P.L. 113-2 ) and, prior to that, the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA, P.L. 109-295 ). The DRRA legislation focuses on improving pre-disaster planning and mitigation, response, and recovery, and increasing FEMA accountability. As such, it amends many sections of the Stafford Act. In addition to those amendments, DRRA includes new standalone authorities and requires reports to Congress, rulemaking, and other actions. The 116 th Congress has expressed interest in the oversight of DRRA's implementation, including sections that amend FEMA's temporary housing assistance programs under the Stafford Act. These sections include the following: DRRA Section 1211—State Administration of Assistance for Direct Temporary Housing and Permanent Housing Construction—amends Stafford Act Section 408(f)—Federal Assistance to Individuals and Households, State Role—to allow state, territorial, or tribal governments to administer Direct Temporary Housing Assistance and Permanent Housing Construction, in addition to Other Needs Assistance (ONA). It also provides a mechanism for state and local units of government to be reimbursed for locally implemented housing solutions. This provision may allow states to customize disaster housing solutions and expedite disaster recovery; however, FEMA may need to provide guidance to clarify the requirements of the application and approval process for the state, territorial, or tribal government that seeks to administer these programs. DRRA Section 1212—Assistance to Individuals and Households—amends Stafford Act Section 408(h)—Federal Assistance to Individuals and Households, Maximum Amount of Assistance—to separate the cap on the maximum amount of financial assistance eligible individuals and households may receive for housing assistance and ONA. The provision also removes financial assistance to rent alternate housing accommodations from the cap, and creates an exception for accessibility-related costs. This may better enable FEMA's disaster assistance programs to meet the recovery-related needs of individuals, including those with disabilities and others with access and functional needs, and households who experience significant damage to their primary residence and personal property as a result of an emergency or major disaster. However, there is also the potential that this change may disincentivize sufficient insurance coverage because of the new ability for eligible individuals and households to receive separate and increased housing and ONA awards that more comprehensively cover disaster-related real and personal property losses. DRRA Section 1213—Multifamily Lease and Repair Assistance—amends Stafford Act Section 408(c)(1)(B)—Federal Assistance to Individuals and Households, Direct Assistance—to expand the eligible areas for multifamily lease and repair, and remove the requirement that the value of the improvements or repairs not exceed the value of the lease agreement. This may increase housing options for disaster survivors. The Inspector General of the Department of Homeland Security must assess the use of FEMA's direct assistance authority to justify this alternative to other temporary housing options, and submit a report to Congress. For more information on DRRA, see CRS Insight IN11055, The Disaster Recovery Reform Act: Homeland Security Issues in the 116th Congress . Additionally, tables of deadlines associated with the implementation actions and requirements of DRRA are available upon request. Native Americans living in tribal areas experience a variety of housing challenges. Housing conditions in tribal areas are generally worse than those for the United States as a whole, and factors such as the legal status of trust lands present additional complications for housing. In light of these challenges, and the federal government's long-standing trust relationship with tribes, certain federal housing programs provide funding specifically for housing in tribal areas. The Tribal HUD-Veterans Affairs Supportive Housing (Tribal HUD-VASH) program provides rental assistance and supportive services to Native American veterans who are homeless or at risk of homelessness. Tribal HUD-VASH is modeled on the broader HUD-Veterans Affairs Supportive Housing (HUD-VASH) program, which provides rental assistance and supportive services for homeless veterans. Tribal HUD-VASH was initially created and funded through the FY2015 HUD appropriations act ( P.L. 113-235 ), and funds to renew rental assistance have been provided in subsequent appropriations acts. However, no separate authorizing legislation for Tribal HUD-VASH currently exists. In the 116 th Congress, a bill to codify the Tribal HUD-VASH program ( S. 257 ) was ordered to be reported favorably by the Senate Committee on Indian Affairs in February 2019. A substantively identical bill passed the Senate during the 115 th Congress ( S. 1333 ), but the House ultimately did not consider it. For more information on HUD-VASH and Tribal HUD-VASH, see CRS Report RL34024, Veterans and Homelessness . The main federal program that provides housing assistance to Native American tribes and Alaska Native villages is the Native American Housing Block Grant (NAHBG), which was authorized by the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA, P.L. 104-330 ). NAHASDA reorganized the federal system of housing assistance for tribes while recognizing the rights of tribal self-governance and self-determination. The NAHBG provides formula funding to tribes that can be used for a range of affordable housing activities that benefit primarily low-income Native Americans or Alaska Natives living in tribal areas. A separate block grant program authorized by NAHASDA, the Native Hawaiian Housing Block Grant (NHHBG), provides funding for affordable housing activities that benefit Native Hawaiians eligible to reside on the Hawaiian Home Lands. NAHASDA also authorizes a loan guarantee program, the Title VI Loan Guarantee, for tribes to carry out eligible affordable housing activities. The most recent authorization for most NAHASDA programs expired at the end of FY2013, although NAHASDA programs have generally continued to be funded in annual appropriations laws. (The NHHBG has not been reauthorized since its original authorization expired in FY2005, though it has continued to receive funding in most years. ) NAHASDA reauthorization legislation has been considered in varying degrees in the 113 th , 114 th , and 115 th Congresses but none was ultimately enacted. The 116 th Congress may again consider legislation to reauthorize NAHASDA. In general, tribes and Congress have been supportive of NAHASDA, though there has been some disagreement over specific provisions or policy proposals that have been included in reauthorization bills. Some of these disagreements involve debates over specific program changes that have been proposed. Others involve debate over broader issues, such as the appropriateness of providing federal funding for programs specifically for Native Hawaiians and whether such funding could be construed to provide benefits based on race. For more information on NAHASDA, see CRS Report R43307, The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA): Background and Funding . In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including certain provisions related to housing. This set of temporary provisions is commonly referred to as "tax extenders." Two housing-related provisions that have been included in tax extenders packages recently are (1) the exclusion for canceled mortgage debt, and (2) the deduction for mortgage insurance premiums, each of which is discussed further below. The most recently enacted tax extenders legislation was the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) in the 115 th Congress. That law extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums through the end of 2017 (each had previously expired at the end of 2016). As of the date of this report, these provisions had not been extended beyond 2017. In the 116 th Congress, S. 617 , the Tax Extender and Disaster Relief Act of 2019, would extend each of these provisions through calendar year 2019. For more information on tax extenders in general, see CRS Report R45347, Tax Provisions That Expired in 2017 ("Tax Extenders") . Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes. This income is typically referred to as canceled mortgage debt income. During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt. The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income associated with a primary residence from taxation. The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times. Rationales put forth when the provision was originally enacted included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts would be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy. Arguments against the exclusion at the time included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness given that the ability to realize the benefits depends on a variety of factors. More recently, because the economy, housing market, and foreclosure rates have improved significantly since the height of the housing and mortgage market turmoil, the exclusion may no longer be warranted. For more information on the exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income . Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions. Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ). Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly). Originally, the deduction was to be available only for 2007, but it was subsequently extended several times. Two possible rationales for allowing the deduction of mortgage insurance premiums are that it assisted in the recovery of the housing market, and that it promotes homeownership. The housing market, however, has largely recovered from the market turmoil of the late 2000s, and it is not clear that the deduction has an effect on the homeownership rate. Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of the resources that are directed toward the housing industry. In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including certain provisions related to housing. This set of temporary provisions is commonly referred to as "tax extenders." Two housing-related provisions that have been included in tax extenders packages recently are (1) the exclusion for canceled mortgage debt, and (2) the deduction for mortgage insurance premiums, each of which is discussed further below. The most recently enacted tax extenders legislation was the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) in the 115 th Congress. That law extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums through the end of 2017 (each had previously expired at the end of 2016). As of the date of this report, these provisions had not been extended beyond 2017. In the 116 th Congress, S. 617 , the Tax Extender and Disaster Relief Act of 2019, would extend each of these provisions through calendar year 2019. For more information on tax extenders in general, see CRS Report R45347, Tax Provisions That Expired in 2017 ("Tax Extenders") . Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes. This income is typically referred to as canceled mortgage debt income. During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt. The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income associated with a primary residence from taxation. The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times. Rationales put forth when the provision was originally enacted included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts would be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy. Arguments against the exclusion at the time included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness given that the ability to realize the benefits depends on a variety of factors. More recently, because the economy, housing market, and foreclosure rates have improved significantly since the height of the housing and mortgage market turmoil, the exclusion may no longer be warranted. For more information on the exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income . Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions. Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ). Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly). Originally, the deduction was to be available only for 2007, but it was subsequently extended several times. Two possible rationales for allowing the deduction of mortgage insurance premiums are that it assisted in the recovery of the housing market, and that it promotes homeownership. The housing market, however, has largely recovered from the market turmoil of the late 2000s, and it is not clear that the deduction has an effect on the homeownership rate. Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of the resources that are directed toward the housing industry.
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The 116th Congress may consider a variety of housing-related issues. These could include topics related to housing finance, federal housing assistance programs, and housing-related tax provisions, among other things. Particular issues that may be of interest during the Congress include the following: The status of Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) that have been in conservatorship since 2008. Congress might consider comprehensive housing finance reform legislation to resolve the status of Fannie Mae and Freddie Mac. Furthermore, a new director for the Federal Housing Finance Agency (FHFA), Fannie Mae's and Freddie Mac's regulator and conservator, was sworn in on April 15, 2019. Congress may take an interest in any administrative changes that FHFA might make to Fannie Mae and Freddie Mac under new leadership. Appropriations for federal housing programs, including programs at the Department of Housing and Urban Development (HUD) and rural housing programs administered by the U.S. Department of Agriculture (USDA), particularly in light of discretionary budget caps that are currently scheduled to decrease for FY2020. Oversight of the implementation of certain changes to federal assisted housing programs that were enacted in prior Congresses, such as expansions of HUD's Moving to Work (MTW) program and Rental Assistance Demonstration (RAD) program. Considerations related to housing and the federal response to major disasters, including oversight of the implementation of certain changes related to Federal Emergency Management Agency (FEMA) assistance that were enacted in the previous Congress. Consideration of legislation related to certain federal housing programs that provide assistance to Native Americans living in tribal areas. Consideration of legislation to extend certain temporary tax provisions that are currently expired, including housing-related provisions that provide a tax exclusion for canceled mortgage debt and allow for the deductibility of mortgage insurance premiums, respectively. Housing and mortgage market conditions provide context for these and other issues that Congress may consider, although housing markets are local in nature and national housing market indicators do not necessarily accurately reflect conditions in specific communities. On a national basis, some key characteristics of owner-occupied housing markets and the mortgage market in recent years include increasing housing prices, low mortgage interest rates, and home sales that have been increasing but constrained by a limited inventory of homes on the market. Key characteristics of rental housing markets include an increasing number of renters, low rental vacancy rates, and increasing rents. Rising home prices and rents that have outpaced income growth in recent years have led to policymakers and others increasingly raising concerns about the affordability of both owner-occupied and rental housing. Affordability challenges are most prominent among the lowest-income renter households, reflecting a shortage of rental housing units that are both affordable and available to this population.
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Disclosure provisions that require commercial actors to convey specified information to consumers occupy an uneasy and shifting space in First Amendment jurisprudence. The First Amendment's Free Speech Clause protects the right to speak as well as the right not to speak, and at least outside the context of commercial speech, courts generally disfavor any government action that compels speech. Indeed, the Supreme Court in 1943 described the First Amendment's protection against compelled speech as a "fixed star in our constitutional constellation." Accordingly, government actions mandating speech are generally subject to strict scrutiny by courts, and will be upheld "only if the government proves that they are narrowly tailored to serve compelling state interests." However, the Court has also long accepted a variety of laws that require commercial actors to make certain disclosures to consumers, confirming that Congress can compel certain disclosures, even those involving protected speech, without running afoul of the First Amendment. Commercial disclosure requirements have largely withstood constitutional scrutiny in part because, historically, commercial speech has received less protection under the First Amendment than other speech. The government's ability to more freely regulate commercial speech has been linked to its general authority "to regulate commercial transactions." Thus, notwithstanding the fact that commercial disclosure requirements compel speech, courts generally have not analyzed such provisions under the strict scrutiny standard. Instead, courts have often employed less rigorous standards to evaluate such provisions. The precise nature of a court's First Amendment analysis, however, will depend on the character of the disclosure requirement at issue. In a recent decision, the Supreme Court distilled and explained its prior cases on this subject. First, the Court said that it has upheld some commercial disclosure requirements that target conduct and only incidentally burden speech. This rubric likely only applies if the disclosure provision is part of a larger scheme regulating commercial conduct. If the disclosure provision instead regulates "speech as speech," it might be subject either to intermediate scrutiny, as a government regulation of commercial speech, or to something closer to rational basis review, if the disclosure provision qualifies for review under the Supreme Court's decision in Zauderer v. Office of Disciplinary Counsel . Some of the Court's recent cases, however, have suggested that in certain circumstances, disclosure requirements may be subject to heightened scrutiny. This report begins with a short background on how courts generally view commercial speech under the First Amendment, then reviews in more detail the possible legal frameworks for analyzing the constitutionality of commercial disclosure requirements. Supreme Court precedent explaining the application of the First Amendment to commercial disclosure requirements is relatively recent. The Court did not squarely hold that purely commercial speech was entitled to any protection under the First Amendment until 1976 in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council . The Court has defined commercial speech alternately as speech that "does 'no more than propose a commercial transaction'" and as "expression related solely to the economic interests of the speaker and its audience." In Virginia Board of Pharmacy , the Court said that commercial speech was protected, but it also emphasized that the First Amendment did not prohibit all regulations of such speech. In particular, the Court said that it foresaw "no obstacle" to government regulation of "false" speech, or even of commercial speech that is only "deceptive or misleading." In subsequent cases, the Court has explained why "regulation to assure truthfulness" is more readily allowed in the context of commercial speech, as compared with other types of speech. While the First Amendment usually protects even untruthful speech, in order to better encourage uninhibited and robust debate, the Court has recognized that regulating "for truthfulness" in the commercial arena is unlikely to "undesirably inhibit spontaneity" because commercial speech is generally less likely to be spontaneous. Instead, it is more calculated, motivated by a "commercial interest." In particular, if a particular advertisement concerns a subject in which "the public lacks sophistication" and cannot verify the claims, the Court has suggested that the government may have a freer hand to address such concerns. Four years after Virginia Board of Pharmacy , in 1980, the Supreme Court set out the standard that generally governs a court's analysis of government restrictions on commercial speech in Central Hudson Gas & Electric Corp. v. Public Service Commission . The Court first explained that commercial speech enjoys "lesser protection" than "other constitutionally guaranteed expression." After emphasizing that First Amendment protection for commercial speech "is based on the informational function of advertising," the Court said that "there can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity." Accordingly, the Court held that the government may prohibit "forms of communication more likely to deceive the public than to inform it" as well as "commercial speech related to illegal activity." But if the regulated "communication is neither misleading nor related to unlawful activity," the government's action is subject to intermediate scrutiny. Under Central Hudson 's intermediate standard, the government must prove that the government's interest is "substantial," and that the regulation "directly advances" that interest and is "not more extensive than is necessary to serve that interest." The Central Hudson test continues to govern the constitutional analysis of government acts that infringe on commercial speech. However, in certain circumstances, commercial speech may lose its commercial character if "it is inextricably intertwined with otherwise fully protected speech." And more generally, some members of the Supreme Court have questioned whether commercial speech should categorically receive less protection under the First Amendment, suggesting that in at least some circumstances, infringements on commercial speech should instead be subject to strict scrutiny. Commentators have pointed out that, as a practical matter, Supreme Court decisions have increasingly struck down, rather than upheld, restrictions on commercial speech. Also relevant to the discussion of disclosure requirements, judges and legal scholars have noted that the Court may be adjusting the role of the content neutrality doctrine with respect to commercial speech. As a general matter, if a law is "content-based," in the sense that it "target[s] speech based on its communicative content," it will be subject to strict scrutiny. The Supreme Court stated in Reed v. Town of Gilbert that a regulation is content-based if it "applies to particular speech because of the topic discussed or the idea or message expressed," if it "cannot be 'justified without reference to the content of the regulated speech,'" or if it was "adopted by the government 'because of disagreement with the message [the speech] conveys.'" Disclosure requirements are generally considered content-based, given that they require regulated parties to speak a certain message, and outside the commercial context, ordinarily trigger the application of strict scrutiny. In Central Hudson , however, the Supreme Court explained that in the context of commercial speech, "regulation of its content" is permissible. And, as commentators have pointed out, "the very category of commercial speech is a content-based category." Nonetheless, the Court has struck down certain regulations that prohibit commercial speech solely because its content is commercial, suggesting that content neutrality might be relevant in the commercial sphere. In its 2011 decision in Sorrell v. IMS Health, Inc. , the Supreme Court considered the constitutionality of a state law prohibiting pharmacies from disclosing certain pharmacy records for marketing purposes. After observing that the law included "content- and speaker-based restrictions on the sale, disclosure, and use of" covered information, the Court concluded that the law was "designed to impose a specific, content-based burden on protected expression" because it applied specifically to marketing, a particular type of speech. Consequently, the law was subject to "heightened judicial scrutiny," notwithstanding the fact that the "burdened speech result[ed] from an economic motive" and was therefore commercial. Ultimately, however, the Court declined to say definitively whether Central Hudson or "a stricter form of judicial scrutiny" should apply because, in the Court's view, the law failed to pass constitutional muster even under Central Hudson . As discussed in more detail below, the shifting role of content neutrality in commercial speech doctrine holds special significance for commercial disclosure requirements: these requirements are content-based because they "compel[] individuals to speak a particular message." At least one legal scholar has suggested that lower courts have read Sorrell as an expression of the Supreme Court's increasing skepticism toward restrictions on commercial speech and, since that decision, have been more likely to strike down commercial disclosure requirements. However, the Court did not expressly limit the reach of Central Hudson in Sorrell or in subsequent cases, suggesting that, at least for now, Central Hudson 's standard of review applies even when a challenged action would otherwise trigger strict scrutiny as a content-based regulation of speech. Indeed, lower courts analyzing commercial disclosure requirements usually ask whether Zauderer or Central Hudson supplies the appropriate standard of review, contemplating at most only intermediate scrutiny —even in cases decided after Sorrell . In its First Amendment jurisprudence, the Supreme Court has generally distinguished between laws that regulate conduct and laws that regulate speech. The Court has held that conduct-focused regulations will not violate the First Amendment by merely incidentally burdening speech. For instance, while the government may regulate prices, attempts to regulate "the communication of prices" implicate the First Amendment. To take another example, the Court has noted that pursuant to "a ban on race-based hiring," a regulation "directed at commerce or conduct," the government "may require employers to remove 'White Applicants Only' signs." To differentiate a regulation targeting conduct from one targeting speech, the Court generally looks to the purpose of the law, asking whether the law appears to target certain content or certain speakers. As part of this inquiry, the Court may also ask whether a regulation applies because of the communicative content of the regulated party's actions. This distinction between speech and conduct is especially significant in the context of commercial speech, given that such speech "occurs in an area traditionally subject to government regulation." Thus, in 1978, the Supreme Court said: "[I]t has never been deemed an abridgment of freedom of speech or press to make a course of conduct illegal merely because the conduct was in part initiated, evidenced, or carried out by means of language, either spoken, written, or printed." Numerous examples could be cited of communications that are regulated without offending the First Amendment, such as the exchange of information about securities, corporate proxy statements, the exchange of price and production information among competitors, and employers' threats of retaliation for the labor activities of employees. Each of these examples illustrates that the State does not lose its power to regulate commercial activity deemed harmful to the public whenever speech is a component of that activity. The Court has previously "upheld regulations of professional conduct that incidentally burden speech." For example, the Court upheld an informed consent requirement in Planned Parenthood of S outheastern Pennsylvania v. Casey . The Casey challengers argued that a law requiring doctors to inform patients seeking abortions about "the nature of the procedure, the health risks of the abortion and of childbirth, and the probable gestational age of the unborn child" compelled doctors to speak in violation of the First Amendment. The Court rejected that argument, concluding that while "the physician's First Amendment rights not to speak are implicated," this was "only as part of the practice of medicine, subject to reasonable licensing and regulation by the State." In National Institute of Family and Life Advocates (NIFLA) v. Becerra , the Supreme Court emphasized that the informed consent requirement upheld in Casey was part of the broader regulation of professional conduct: specifically, the practice of medicine. By contrast, the Court held that the disclosure requirement at issue in NIFLA , which required certain health facilities to provide clients with information about state-sponsored services, could not be upheld as "an informed-consent requirement or any other regulation of professional conduct" because it was not tied to any medical procedure. Instead, in the Court's view, the requirement "regulate[d] speech as speech," as opposed to regulating speech only incidentally. While the Court has made clear that the First Amendment does not prohibit such incidental regulation of commercial speech, it has not articulated one overarching standard for evaluating whether such provisions are constitutionally permissible. Its decisions in this area have considered a wide variety of government actions incidentally burdening speech, and it may be that the standard varies according to the nature of the particular speech restriction evaluated. In some cases, the Court has suggested that "the First Amendment is not implicated by the enforcement" of a broader regulatory scheme where the regulated conduct does not have "a significant expressive element" or the statute does not inevitably single out "those engaged in expressive activity." In other cases where the Court has upheld a regulation that it characterized as focused on conduct rather than speech, the Court investigated the strength of the government's interest and asked whether the regulation advances that interest, suggesting that the Court subjected the regulation to some First Amendment scrutiny—albeit using a relatively relaxed standard. The Court has never explicitly held that a commercial disclosure requirement qualifies as a constitutionally permissible incidental restriction on commercial speech. While Planned Parenthood of Southeastern Pennsylvania v. Casey did involve a disclosure requirement, the Court did not address whether the informed consent requirement involved commercial or noncommercial speech either in Casey or when discussing that requirement in NIFLA . In NIFLA , the Court held that a state law imposing disclosure requirements on clinics providing pregnancy-related services could not be characterized as a regulation that only incidentally burdened speech because the requirement was not tied to any specific medical procedures. However, the Court never expressly stated whether it considered the disclosures to consist of commercial or noncommercial speech. Similarly, in Expressions Hair Design v. Schneiderman , the Court rejected the application of this doctrine without expressly characterizing the government action as a commercial disclosure requirement. In that case, the Court considered the constitutionality of a state law prohibiting sellers from imposing surcharges on customers who use credit cards. The Supreme Court rejected the argument that this law primarily "regulated conduct, not speech," concluding that the law did not merely regulate pricing, but regulated the communication of prices by prohibiting merchants from posting a cash price and an additional credit card surcharge. The Court then remanded the case to the lower courts to consider the First Amendment challenges in the first instance, leaving open the question of whether the provision could be characterized as a requirement for sellers to disclose an item's credit card price, rather than as a prohibition of certain speech. As these cases suggest, the Court has seemed reluctant in recent years to uphold government actions as conduct-focused regulations that merely incidentally burden speech, especially in the context of compelled disclosure requirements. Instead, the Court has distinguished the few cases upholding government acts as incidental restrictions and subjected disclosure requirements to further scrutiny. Nonetheless, the Court has left open the possibility that commercial disclosure requirements might, in the future, qualify as permissible incidental speech regulation, if they are part of a broader regulatory scheme. If the government regulates "speech as speech," its actions will implicate the First Amendment's protections for freedom of speech and may trigger heightened standards of scrutiny. However, the First Amendment does not prescribe a single analysis for all government actions that potentially infringe on free speech protections. Instead, a court's review will depend on the nature of both the government action and the speech itself. This section first introduces the three possible levels of scrutiny a court might use to analyze a speech regulation and then explains their application to compelled commercial disclosures in more detail. In the context of commercial disclosure requirements, there are three primary categories of First Amendment analysis that may be relevant. First, as a general rule, government actions that compel speech are usually subject to strict scrutiny. To survive strict scrutiny, the government must show that the challenged action is "narrowly tailored to serve compelling state interests." Laws are unlikely to meet this "stringent standard." Second, as discussed above, government actions regulating commercial speech generally receive only intermediate scrutiny. The intermediate scrutiny standard, pursuant to Central Hudson , requires a "substantial" state interest and requires the government to prove that the law "directly advances" that interest and "is not more extensive than is necessary to serve that interest." This standard is less demanding than strict scrutiny, but laws may still be struck down under this test. The final and most lenient category—one specific to commercial disclosure requirements—comes from a 1985 case, Zauderer v. Office of Disciplinary Counsel . In that case, the Supreme Court considered the constitutionality of state disciplinary rules regulating attorney advertising. As relevant here, the rules required advertisements referring to contingent-fee rates to disclose how the fee would be calculated. An attorney who had been disciplined by the state for violating these provisions argued that this disclosure requirement was unconstitutional because the state failed to meet the standards set out in Central Hudson . The Court acknowledged that it had previously held that prohibitions on commercial speech were subject to heightened scrutiny under Central Hudson , and that it had "held that in some instances compulsion to speak may be as violative of the First Amendment as prohibitions on speech." "But," the Court said, "[t]he interests at stake in this case are not of the same order as those" implicated in cases involving the compulsion of noncommercial speech. Instead, the Court noted that the state's provision only involved "commercial advertising, and its prescription has taken the form of a requirement that appellant include in his advertising purely factual and uncontroversial information about the terms under which his services will be available." In this commercial context, the Court said that the attorney's "constitutionally protected interest in not providing any particular factual information in his advertising is minimal," noting that in previous cases it had stated that states might "appropriately require[]" warnings or disclaimers "in order to dissipate the possibility of consumer confusion or deception." Rather than applying heightened scrutiny, the Court held that under these circumstances, "an advertiser's rights are adequately protected as long as disclosure requirements are reasonably related to the State's interest in preventing deception of consumers." The Zauderer Court did warn, however, that commercial disclosure requirements raise First Amendment concerns, observing that "unjustified or unduly burdensome disclosure requirements might offend the First Amendment by chilling protected commercial speech." But the Court rejected the contention that the disclosure requirement before it was unduly burdensome. Instead, the Court concluded that "[t]he State's position that it is deceptive to employ advertising that refers to contingent-fee arrangements without mentioning the client's liability for costs is reasonable enough to support a requirement that information regarding the client's liability for costs be disclosed." Although the state had not submitted evidence that clients were in fact being misled, the Court stated that "the possibility of deception" was "self-evident," making the state's "assumption that substantial numbers of potential clients would be . . . misled" regarding the terms of payment reasonable. Zauderer sets out the most lenient of the three standards of review discussed above, and, as a result, a commercial disclosure requirement is most likely to be upheld if it is reviewed under the rubric of that case. However, the Zauderer standard of review has been interpreted to apply only to certain types of disclosure requirements. As described by the Court and discussed above, the state regulation upheld in Zauderer required "purely factual and uncontroversial information about the terms under which [attorneys'] services [would] be available," and the provision was "reasonably related to the State's interest in preventing deception of consumers." Subsequent cases in both the Supreme Court and the lower courts have tested the extent to which this reasonableness review applies outside of the specific factual circumstances presented in Zauderer . The Supreme Court has decided whether to apply Zauderer review to government acts compelling commercial speech in three significant cases. First, in United States v. United Foods , decided in 2001, the Court invalidated a federal statute that compelled "handlers of fresh mushrooms to fund advertising for the product." United Foods thus involved a compelled subsidy, rather than a compelled disclosure. The Court concluded that these statutorily compelled subsidies for government-favored speech implicated the First Amendment and that "mandat[ing] support" from objecting parties was "contrary to . . . First Amendment principles." The Court held that Zauderer was inapplicable, noting that in the case before it, there was "no suggestion . . . that the mandatory assessments . . . are somehow necessary to make voluntary advertisements nonmisleading for consumers." By contrast, the Court applied Zauderer in a 2010 decision, Milavetz, Gallop & Milavetz, P.A. v. United States , another case concerning attorney advertising. In that case, the Court considered an attorney's First Amendment challenges to a federal statute that required "debt relief agencies" to "make certain disclosures in their advertisements." "Debt relief agencies" was a statutorily defined term covering some attorneys who provided clients with bankruptcy assistance. Among other things, agencies advertising "bankruptcy assistance services or . . . the benefits of bankruptcy" were required to disclose that they were "a debt relief agency" that "help[ed] people file for bankruptcy relief under the Bankruptcy Code." Rejecting the challenger's contention that Central Hudson 's intermediate scrutiny governed the disclosure requirement, the Court held instead that "the less exacting scrutiny described in Zauderer " governed its review. The Court concluded that the provision "share[d] the essential features of the rule at issue in Zauderer ." The disclosure requirement was "intended to combat the problem of inherently misleading commercial advertisements—specifically, the promise of debt relief without any reference to the possibility of filing for bankruptcy, which has inherent costs." Further, the law required the covered entities to provide "only an accurate statement identifying the advertiser's legal status and the character of the assistance provided." As in Zauderer , where the "possibility of deception" was "self-evident," the Court was not troubled by the lack of evidence that current advertisements were misleading. Instead, "evidence in the congressional record demonstrating a pattern of advertisements that hold out the promise of debt relief without alerting consumers to its potential cost" was "adequate." The Court ultimately upheld the disclosure requirement as "reasonably related to the [Government's] interest in preventing deception of consumers." Most recently, in 2018, the Court considered the application of Zauderer in NIFLA . That case involved two distinct disclosure requirements imposed by California's Reproductive Freedom, Accountability, Comprehensive Care, and Transparency Act (FACT Act), which regulated crisis pregnancy centers. First, the FACT Act required any " licensed covered facility" to notify clients that "California has public programs that provide immediate free or low-cost access to comprehensive family planning services (including all FDA-approved methods of contraception), prenatal care, and abortion for eligible women," and give the telephone number of the local social services office. Second, any " unlicensed covered facility" had to provide notice that the "facility is not licensed as a medical facility by the State of California and has no licensed medical provider who provides or directly supervises the provision of services." The Court first held that Zauderer 's reasonableness review did not apply to the licensed notice. In the Court's view, the notice was "not limited to 'purely factual and uncontroversial information about the terms under which . . . services will be available.'" The Court explained that the disclosure requirement "in no way relate[d] to the services that licensed clinics provide." The Court said that instead, the law "require[d] these clinics to disclose information about state -sponsored services—including abortion, anything but an 'uncontroversial' topic." The Court ultimately held that the licensed notice could not "survive even intermediate scrutiny." Turning to the unlicensed notice, the Court determined that it did not need to "decide whether the Zauderer standard applies to the unlicensed notice" because the disclosure requirement failed scrutiny even under Zauderer . The Court said that "under Zauderer , a disclosure requirement cannot be 'unjustified or unduly burdensome.'" The Court interpreted this statement to require that the government prove it was seeking "to remedy a harm that is 'potentially real, not purely hypothetical.'" Based on the record on appeal, the Court found that California's stated interest in "ensuring that pregnant women in California know when they are getting medical care from licensed professionals" was "purely hypothetical." Further, the Court held in the alternative that "[e]ven if California had presented a nonhypothetical justification for the unlicensed notice, the FACT Act unduly burden[ed] protected speech" by requiring a government statement to be placed in all advertisements, regardless of an advertisement's length or content. The Court also expressed concern that the unlicensed notice "target[ed]" certain speakers in imposing those burdens by focusing on "facilities that primarily provide 'pregnancy-related' services." While the Supreme Court has emphasized that Zauderer 's reasonableness review is available only for certain types of compelled commercial disclosures, lower courts have disagreed on the precise circumstances required to apply Zauderer . A few requirements have emerged in the case law. First, courts agree that to qualify for review under Zauderer , a commercial disclosure requirement must compel speech that is "factual and uncontroversial." Next, the disclosure must be related to the goods or services the speaker provides. Finally, courts have disagreed on the type of government interest that may be asserted to justify a Zauderer -eligible regulation: while Zauderer itself approved of the challenged disclosure requirement after concluding that the state was permissibly seeking to "prevent[] deception of consumers," lower courts have sometimes applied Zauderer review even where the regulation is not specifically intended to prevent deception. Before discussing the particulars of these requirements, it is worth noting that these elements are related to the Court's overarching justifications for affording the government more leeway to regulate commercial speech. The seminal Supreme Court case establishing that commercial speech is protected by the First Amendment, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council , tied commercial speech's value to its ability to inform consumers. Critically, the Court said that governments could continue to ban false or misleading commercial speech , noting in another case that "the public and private benefits from commercial speech derive from confidence in its accuracy and reliability." It was against this background that the Court in Zauderer concluded that the provision requiring the disclosure of factual information about contingent fee arrangements did not involve First Amendment interests "of the same order as those" involved in other cases involving the compulsion of noncommercial speech. Accordingly, the state acted reasonably by prescribing that attorneys had to include in their advertising "purely factual and uncontroversial information about the terms under which [their] services [would] be available." The first element for a commercial disclosure requirement to be eligible for Zauderer review is that the government regulation must require the disclosure of "factual and uncontroversial" information. The two parts of Zauderer's initial requirement are often evaluated as one, although courts have sometimes pointed out that "factual" and "uncontroversial," logically, connote two different things. Viewing the two words together, some have characterized the "factual and uncontroversial" requirement as distinguishing regulations that compel the disclosure of facts from those that compel individuals to state opinions or ideologies. As discussed, the Supreme Court has said that the value of commercial speech largely lies in its ability to inform consumers. And in Zauderer , the Court emphasized that because protection for commercial speech is justified by its informational value, the attorney challenging the disclosure requirement had a "minimal" First Amendment interest "in not providing any particular factual information in his advertising." As the Second Circuit has explained: Commercial disclosure requirements are treated differently from restrictions on commercial speech because mandated disclosure of accurate, factual, commercial information does not offend the core First Amendment values of promoting efficient exchange of information or protecting individual liberty interests. Such disclosure furthers, rather than hinders, the First Amendment goal of the discovery of truth and contributes to the efficiency of the "marketplace of ideas." Protection of the robust and free flow of accurate information is the principal First Amendment justification for protecting commercial speech, and requiring disclosure of truthful information promotes that goal. In such a case, then, less exacting scrutiny is required than where truthful, nonmisleading commercial speech is restricted. In this vein, the Supreme Court upheld disclosure requirements regarding the nature of contingent fee arrangements in Zauderer and statements clarifying the nature of the bankruptcy-related assistance provided by debt relief agencies in Milavetz . Lower courts have approved as "factual and uncontroversial" within the meaning of Zauderer a variety of other commercial disclosure requirements, including regulations requiring the disclosure of: country-of-origin information for meat; calorie information at restaurants; the fact that products contain mercury; and textual and graphic warnings about the health risks of tobacco products. By contrast, in a 2015 opinion, the D.C. Circuit concluded that a federal regulation requiring firms to disclose whether their products used "conflict minerals" that originated "in the Democratic Republic of the Congo or an adjoining country" could not be characterized as factual and uncontroversial. The court said that "[t]he label '[not] conflict free' is a metaphor that conveys moral responsibility for the Congo war. . . . An issuer, including an issuer who condemns the atrocities of the Congo war in the strongest terms, may disagree with that assessment of its moral responsibility. . . . By compelling an issuer to confess blood on its hands, the statute interferes with that exercise of the freedom of speech under the First Amendment." Similarly, the Seventh Circuit, in a 2006 opinion, held that disclosure requirements in a state law regulating sexually explicit video games were not "factual and uncontroversial" as required for Zauderer to apply. In relevant part, the law required "video game retailers to place a four square-inch label with the numerals '18' on any 'sexually explicit' video game," and to post signs and provide brochures "explaining the video game rating system." The court held first that the sticker "ultimately communicates a subjective and highly controversial message—that the game's content is sexually explicit." Similarly, the panel concluded that "the message" communicated by the signs and brochures was "neither purely factual nor uncontroversial" because it was "intended to communicate that any video games in the store can be properly judged pursuant to the standards described in the . . . ratings." As mentioned above, some courts have treated "factual" and "uncontroversial" as two distinct requirements. But at times, courts have struggled to define "controversial," standing alone. The D.C. Circuit has suggested that controversial must mean that a disclosure "communicates a message that is controversial for some reason other than dispute about simple factual accuracy." One trial court interpreting a decision of the Second Circuit suggested that "it is the nature of the regulation of compelled speech that controls, not the nature of the legislative debate that gave rise to its enactment." That court then noted that other courts had equated controversial messages with disclosures that are "opinion-based." Courts have disagreed about whether a disclosure may be characterized as "controversial" because it is "inflammatory" or "evoke[s] an emotional response." In NIFLA , the Supreme Court struck down the licensed notice after noting that the required disclosures related to "abortion, anything but an 'uncontroversial' topic," although it did not further explain when a topic is "uncontroversial" for purposes of Zauderer. Second, to be eligible for review under Zauderer , a commercial disclosure requirement must be related to the services provided by the speaker. In Zauderer itself, the Court had noted that the disputed disclosure required the attorney to provide information in his advertising "about the terms under which his services will be available." By and large, lower courts, at least prior to NIFLA, had not treated this relationship to the speaker's services as a distinct requirement. The Court in NIFLA , however, said that this was a necessary prerequisite for Zauderer review and held in that case that the notice requirement for licensed clinics at issue was not "relate[d] to the services that licensed clinics provide" because it instead provided information "about state -sponsored services." Judges have disagreed on whether there exists a third requirement for Zauderer review. In Zauderer itself, the Supreme Court noted that the disclosure requirements at issue in that case were intended to "prevent[] deception of customers." Further, when applying Zauderer review to the bankruptcy-related disclosures at issue in Milavetz , the Court stated that the disclosures were "intended to combat the problem of inherently misleading commercial advertisements." Perhaps most notably, in United Foods , the Court explained its decision not to apply Zauderer by noting that there was "no suggestion" that the compelled subsidies at issue in that case were "somehow necessary to make voluntary advertisements nonmisleading for consumers." The Supreme Court's decisions applying Zauderer have thus suggested that one factor in deciding whether to apply this "reasonably related" review is whether the targeted commercial speech is misleading, or whether the state's interest in requiring the disclosure is to prevent "consumer confusion or deception." Nonetheless, the Court has not squarely held that this is a necessary condition for Zauderer review, and several lower courts have rejected this position. The D.C. Circuit concluded that Zauderer 's justification characterizing "the speaker's interest in opposing forced disclosure of such information as 'minimal' seems inherently applicable beyond" the state's "interest in remedying deception." The Second Circuit has also held that Zauderer review applies more broadly. In rejecting a litigant's argument that the Supreme Court's decision in United Foods limited Zauderer only to laws intended to prevent consumer deception, the Second Circuit said that United Foods "simply distinguishes Zauderer on the basis that the compelled speech in Zauderer was necessary to prevent deception of consumers; it does not provide that all other disclosure requirements are subject to heightened scrutiny." If a commercial disclosure requirement involves only "purely factual and uncontroversial information" about the goods or services being sold, and is therefore eligible for review under Zauderer , then it will be constitutional so long as the disclosure requirement is "reasonably related" to the government's interest. This reasonableness review is relatively lenient, especially as compared with the standards that would otherwise apply to compelled speech. But, as emphasized in NIFLA , even under Zauderer , "unjustified or unduly burdensome disclosure requirements might offend the First Amendment by chilling protected commercial speech." Lower courts had previously come to different conclusions regarding whether "unjustified or unduly burdensome" presented an additional inquiry, to be conducted separately from the reasonableness inquiry otherwise prescribed by Zauderer , or whether instead this inquiry was subsumed by the "reasonably related" inquiry. NIFLA did not entirely resolve this issue, although it did frame its analysis using the "unjustified or unduly burdensome" language rather than the language of rational basis review. In Zauderer , the Supreme Court upheld the contingent fee disclosure after concluding that the requirement was "reasonably related to the State's interest in preventing deception of consumers." But as noted above, lower courts have largely concluded that Zauderer 's reasonableness review may govern the analysis even when the government asserts an interest other than preventing consumer deception. The D.C. Circuit has, so far, largely declined to articulate a clear standard for "what type of interest might suffice." That court did conclude in one case that where the government's interest was "substantial under Central Hudson 's standard," that would qualify as a sufficient interest under Zauderer . Perhaps taking a different approach, in a case upholding a disclosure requirement under Zauderer , the Second Circuit described the state's interest as "legitimate and significant." Other than "the interest in correcting misleading or confusing commercial speech," the federal courts of appeals have upheld commercial disclosure requirements where the government asserted interests in food safety, preventing obesity, "protecting human health and the environment from mercury poisoning," and in protecting health benefit providers "from questionable . . . business practices." By contrast, the Second Circuit held in International Dairy Foods Association v. Amestoy that "consumer curiosity alone is not a strong enough state interest to sustain the compulsion of even an accurate, factual statement." In NIFLA , the Supreme Court indicated that under Zauderer , the government must assert an interest that is "more than 'purely hypothetical.'" As discussed above, the State of California's justification for the notice requiring unlicensed clinics to disclose that they were unlicensed was to "ensur[e] that pregnant women in California know when they are getting medical care from licensed professionals." The Court concluded that the state had "point[ed] to nothing suggesting that pregnant women do not already know that the covered facilities are staffed by unlicensed medical professionals." NIFLA 's requirement that the government provide evidence supporting an asserted interest differs from the Court's approach in Zauderer itself and in Milavetz . In both Zauderer and Milavetz , the Court rejected arguments that the government had failed to present sufficient evidence to support its interest in the disclosure requirement, concluding that in both of those cases, "the possibility of deception" in the regulated advertisements was "self-evident." Although the standard is not entirely clear, it is possible that in future cases the Court could conclude again that a particular advertisement is so obviously deceptive that the government does not need to submit significant evidence proving that the advertisements are misleading. If the government has asserted a sufficient interest, then under Zauderer , it needs to show only that the disputed disclosure requirement is "reasonably related" to that interest. Describing the Supreme Court's decision in Zauderer , the D.C. Circuit has said that the "evidentiary parsing" required by more rigorous First Amendment tests "is hardly necessary when the government uses a disclosure mandate to achieve a goal of informing consumers about a particular product trait, assuming of course that the reason for informing consumers qualifies as an adequate interest." That court further elaborated that "[t]he self-evident tendency of a disclosure mandate to assure that recipients get the mandated information may in part explain why, where that is the goal, many such mandates have persisted for decades without anyone questioning their constitutionality." Similarly, the Second Circuit has observed in one case that "while the First Amendment precludes the government from restricting commercial speech without showing that 'the harms it recites are real and that its restriction will in fact alleviate them to a material degree,'" the First Amendment "does not demand 'evidence or empirical data' to demonstrate the rationality of mandated disclosures in the commercial context." Notwithstanding the suggestion that little evidence is required to show that a disclosure requirement is reasonably related to an appropriate government interest, lower courts have often relied on the government's evidence supporting the disputed requirement when they uphold the provision. This showing may be easiest where the government asserts an interest in preventing misleading speech, given "the self-evident tendency of a disclosure mandate to assure that recipients get the mandated information." Additionally, courts have sometimes held that commercial disclosure requirements fail even this lenient test for rationality, particularly where the government has asserted an interest other than preventing consumer confusion. For example, in National Association of Manufacturers v. SEC , the D.C. Circuit held that a provision requiring companies to disclose whether their products were "conflict free" violated the First Amendment. In defending this rule, the government asserted an interest in "ameliorat[ing] the humanitarian crisis in the [Democratic Republic of the Congo (DRC)]." In the court's view, however, the government had failed to demonstrate that its measure would achieve this interest. The D.C. Circuit observed that the government had "offered little substance beyond" statements by political officials to support "the effectiveness of the measure." The court assumed that the government's theory "must be that the forced disclosure regime will [lead to boycotts that] decrease the revenue of armed groups in the DRC and their loss of revenue will end or at least diminish the humanitarian crisis there." But in the view of the court, this theory could not justify the regulation, as the idea was "entirely unproven and rest[ed] on pure speculation." To take another example, the Third Circuit struck down a commercial disclosure requirement concerning attorney advertising in Dwyer v. Cappell . In that case, an attorney challenged a state regulation that prohibited attorneys from using quotations from judicial opinions in their advertising unless they presented "the full text" of those opinions. The state argued that such quotations were "inherently misleading because laypersons . . . would understand them to be judicial endorsements." The court, however, said that even assuming "that excerpts of judicial opinions are potentially misleading to some persons," the state had failed "to explain how [an attorney's] providing a complete judicial opinion somehow dispels this assumed threat of deception." The court reasoned that "providing a full judicial opinion does not reveal to a potential client that an excerpt of the same opinion is not an endorsement." Additionally, the court held that the disputed requirement was "unduly burdensome," as it "effectively rules out the possibility that [an attorney] can advertise with even an accurately quoted excerpt of a judicial statement about his abilities." And in the view of the Third Circuit, "that type of restriction—an outright ban on advertising with judicial excerpts—would properly be analyzed under the heightened Central Hudson standard of scrutiny." As Dwyer suggests, courts may strike down disclosure requirements under Zauderer if the requirement is "unduly burdensome." In NIFLA , the Supreme Court held that the unlicensed notice was likely unconstitutional because it "unduly burden[ed] protected speech," noting that it applied to all advertisements for these licensed facilities, regardless of their content. In particular, the majority opinion highlighted one hypothetical discussed at oral argument, noting that "a billboard for an unlicensed facility that says 'Choose Life' would have to surround that two-word statement with a 29-word statement from the government, in as many as 13 different languages." In this instance, the Court said, the notice would "drown[] out the facility's own message," and therefore be unduly burdensome. If a commercial disclosure requirement is not a factual and uncontroversial disclosure related to the speaker's goods or services under Zauderer , courts will likely apply a heightened standard of review. Under prevailing Supreme Court precedent, if a provision does not qualify for Zauderer 's reasonableness review, a court may review the challenged regulation under Central Hudson . As discussed above, Central Hudson established the general standard of review for government restrictions on commercial speech. The Supreme Court described "a four-part analysis:" At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest. The Court has described the Central Hudson test as "intermediate" scrutiny. If a disclosure requirement affects commercial speech but does not qualify for Zauderer review, courts have generally held that Central Hudson 's intermediate scrutiny applies. However, courts have sometimes suggested that some higher standard of review, more stringent than Central Hudson 's intermediate scrutiny, should apply to commercial disclosure requirements that do not qualify for review under Zauderer . Some lower court judges have concluded that because such disclosures compel particular speech and are by definition not content-neutral, they should be evaluated under strict scrutiny. In contrast to Central Hudson review, which requires the government to show that a law is "not more extensive than is necessary to serve" a "substantial" interest, strict scrutiny "requires the Government to prove that the restriction furthers a compelling interest and is narrowly tailored to achieve that interest." The Supreme Court has suggested—but not squarely held—that at least some types of commercial disclosure requirements might be subject to some form of scrutiny more strict than Central Hudson . In NIFLA , the Supreme Court considered the constitutionality of state provisions requiring crisis pregnancy centers to make certain disclosures to clients and in their advertising. The Court suggested that the provision requiring licensed facilities to disseminate notices about state-provided services might be subject to strict scrutiny as a content-based regulation of speech, but concluded that it did not need to resolve that question because the notice could not "survive even intermediate scrutiny." Significantly, however, the NIFLA Court never described the licensed notice as involving commercial speech. In the decision below, the Ninth Circuit had held that the notice should not be subject to strict scrutiny because it regulated "professional speech." That court, like other federal courts of appeals, had recognized "speech that occurs between professionals and their clients in the context of their professional relationship" "as a separate category of speech that is subject to different rules." The Ninth Circuit had concluded that speech that was part of the practice of a profession could be regulated by the state, subject only to intermediate scrutiny. The Court rejected this idea, saying that the First Amendment does not encompass a tradition of lower scrutiny "for a category called 'professional speech.'" Ultimately, the Court said that it saw no "persuasive reason" to treat "professional speech as a unique category that is exempt from ordinary First Amendment principles." To the extent that "professional speech" could be seen to overlap with commercial speech, this sentence could be read to suggest that commercial speech should also be subject to "ordinary First Amendment principles." This suggestion would seem to conflict with prior cases saying that commercial speech occupies a "subordinate position in the scale of First Amendment values." Although the NIFLA Court implicitly suggested that disclosure requirements for professionals might constitute commercial speech by evaluating the FACT Act's requirements under Zauderer and Central Hudson , it never expressly clarified whether "professional speech" overlaps with commercial speech. Because the FACT Act's requirements applied outside of the advertising context, it may be open to some debate whether these licensed notices involved commercial speech. The unlicensed notice challenged in NIFLA was required to be included in advertising, and advertisements are "classic examples of commercial speech." But the unlicensed notice was also required to be posted on-site, and the state required licensed facilities to post disclosures on-site or to otherwise distribute the notice to clients directly. Further, in a similar context, at least one federal court of appeals concluded that a Baltimore ordinance requiring certain pregnancy centers to make specified disclosures regulated noncommercial speech. That court said the pregnancy centers were not motivated by economic interest or proposing a commercial transaction, but were instead "provid[ing] free information about pregnancy, abortion, and birth control as informed by a religious and political belief." If the licensed disclosures in NIFLA did not regulate commercial speech, then it would be unsurprising that the Court would consider applying strict scrutiny rather than Central Hudson . Others, however, have pointed out that crisis pregnancy centers, even if they do not charge fees, operate "in a marketplace where other providers generally charge fees," and argued that these centers "are engaged in commercial activity by providing physical and mental health services to pregnant women." And more generally, some have pointed out the similarities between "professional" and commercial speech. The fact that the NIFLA Court did not directly address the relationship between professional and commercial speech may suggest that heightened scrutiny may be necessary with respect to some commercial disclosure requirements. Specifically, the Court did not cite the commercial speech doctrine as "a persuasive reason for treating professional speech as a unique category that is exempt from ordinary First Amendment principles." At least one commentator has argued that the Court's failure to mention Central Hudson —"not even to dismiss it as . . . another inapposite exception to Reed 's general rule [of strict scrutiny]"—may suggest that the Court is seeking to limit Central Hudson 's holding that commercial speech may be more freely regulated than other speech under the First Amendment. Although NIFLA may not have expressly altered the framework used to evaluate commercial disclosure requirements, it may nonetheless signal that the Supreme Court will view them with more skepticism in the future. The majority opinion, authored by Justice Thomas, emphasized that "[t]he dangers associated with content-based regulations of speech are also present in the context of professional speech." Even if "professional speech" is not coterminous with "commercial speech," this statement does seem to suggest that the Court believes content neutrality principles are relevant in the commercial sphere. In dissent, Justice Breyer, viewing the majority opinion as adopting such a view, argued that the majority's approach, "if taken literally, could radically change prior law, perhaps placing much securities law or consumer protection law at constitutional risk." He pointed out that "[v]irtually every disclosure law could be considered 'content based,' for virtually every disclosure law requires individuals 'to speak a particular message.'" In response to Justice Breyer, the NIFLA majority stated that it did not "question the legality of health and safety warnings long considered permissible, or purely factual and uncontroversial disclosures about commercial products." This view echoed the Court's prior statement that "[p]urely commercial speech is more susceptible to compelled disclosure requirements." Following the Court's 2010 decision in Reed , in which the Court articulated a more "precise test to determine whether speech regulations are content based," many lower courts had rejected the idea that content-based requirements affecting only commercial speech should be subject to strict scrutiny, even if they otherwise discriminated based on content under Reed . But because NIFLA appeared to suggest that content neutrality is relevant in the commercial sphere, it seems reasonable to think that lower courts may now be more likely to conclude that strict scrutiny could apply to content-based commercial disclosure requirements. This would be consistent with what some commentators have described as the Court's increasingly heightened scrutiny of restrictions on commercial speech. For now, though, Central Hudson generally continues to govern the analysis of government actions affecting lawful, non-misleading commercial speech, including commercial disclosure requirements that do not qualify for Zauderer review. As discussed, Central Hudson requires that the government prove that its interest is "substantial," and that the regulation "directly advances" that interest and is "not more extensive than is necessary to serve that interest." Government regulations are more likely to fail this more rigorous standard than the Zauderer reasonableness standard, often because a court believes there is some less restrictive means available for the government to achieve its goals. Courts will require more "evidence of a measure's effectiveness" under Central Hudson , as compared to Zauderer . However, Central Hudson is more forgiving than strict scrutiny, and courts do uphold government actions infringing on commercial speech under Central Hudson . For example, in Spirit Airlines v. Department of Transportation , the D.C. Circuit concluded that a federal regulation governing the way that airlines must display flight prices "satisfie[d] . . . the Central Hudson test." In the court's view, "[t]he government interest—ensuring the accuracy of commercial information in the marketplace—[was] clearly and directly advanced by a regulation requiring that the total, final price be the most prominent" price displayed. And the regulation was "reasonably tailored to accomplish that end" because the rule "simply regulate[d] the manner of disclosure." Government actions are unlikely to be upheld if a court applies strict scrutiny. Nonetheless, some scholars have argued that many disclosure requirements might survive strict scrutiny, and the Supreme Court has, in rare instances, said that the government may "directly regulate speech to address extraordinary problems, where its regulations are appropriately tailored to resolve those problems without imposing an unnecessarily great restriction on speech." It is possible that a court could hold that the government has a compelling interest in protecting consumers, for example, and that particular disclosures are narrowly tailored to meet that interest. The Supreme Court has long emphasized that the government can regulate commercial activity "deemed harmful to the public." But a court would likely require more proof from the government under strict scrutiny and likely would not simply accept the government's allegations as "self-evident" under such review. Congress has enacted a wide variety of disclosure requirements, many of which arguably compel commercial speech. For example, the Securities and Exchange Act of 1934 sets out disclosure requirements for registering securities. Federal law, among a host of other food labeling requirements, requires "bioengineered food" to bear a label disclosing that the food is bioengineered. Direct-to-consumer advertisements for prescription drugs must contain a series of disclosures, including the drug's name and side effects. Certain appliances must contain labels disclosing information about their energy efficiency. Bills in the 115 th and 116 th Congresses have proposed additional disclosure requirements, including a bill that would require large online platforms to disclose any studies conducted on users for the purposes of promoting engagement, and a bill that would require public companies to disclose climate-related risks. Recent Supreme Court precedent suggests that the Court is more closely reviewing commercial disclosure requirements, perhaps moving away from a more deferential treatment of such provisions. In NIFLA , the Court held that a disclosure requirement was likely unconstitutional under Zauderer because the government had not presented sufficient evidence to justify the measure —even though in other cases, the Court had rejected similar challenges to commercial disclosure requirements, saying that the government did not need to present more evidence because the harm it sought to remedy was "self-evident." Further, the Court has recently suggested that if a law regulating commercial speech discriminates on the basis of content—as all disclosure requirements seemingly do —then this content discrimination might subject the law to heightened scrutiny. If the Court further embraces this view, it could be a marked departure from its opinions holding that commercial speech could be regulated on the basis of its content, so long as the government's justification for the content discrimination were sufficiently related to its legitimate interests in regulating the speech. In concurring and dissenting opinions that have been joined by other Justices, Justice Breyer has argued that insofar as the Court's recent decisions suggest that commercial disclosure requirements should be subject to heightened scrutiny, they are inconsistent with prior case law and are not a proper application of the First Amendment. The Supreme Court said in NIFLA that it was "not question[ing] the legality of health and safety warnings long considered permissible, or purely factual and uncontroversial disclosures about commercial products." And lower courts have frequently upheld commercial disclosure requirements, perhaps suggesting that disclosures of the kind cited by Justice Breyer are not in danger of wholesale invalidation under the First Amendment. However, the majority opinion in NIFLA did not clarify what kind of disclosures it would consider permissible, and its opinion made clear that disclosure requirements should be scrutinized in light of the speakers they cover and the burdens they pose. Moreover, although the NIFLA Court said that it was not questioning these disclosures' "legality," it left open the possibility that these disclosure should nonetheless be subject to heightened scrutiny. This statement may mean only that the Court believes that many commercial disclosure requirements would meet a higher standard of scrutiny. At least one federal appellate court seems to have taken NIFLA as a signal that lower courts should more closely scrutinize commercial disclosure requirements. In American Beverage Association v. City & County of San Francisco , the Ninth Circuit, sitting en banc , relied on NIFLA to reverse a prior decision that had upheld an ordinance requiring "health warnings on advertisements for certain sugar-sweetened beverages." While a panel of judges had previously concluded that the disclosure requirement was constitutional under Zauderer , the full Ninth Circuit, reviewing that decision, said: " NIFLA requires us to reexamine how we approach a First Amendment claim concerning compelled speech." Namely, the court held that, in light of NIFLA , the health warnings were likely unjustified and unduly burdensome under Zauderer , noting that the regulation required the warnings to "occupy at least 20% of those products' labels or advertisements"—but that the record showed that "a smaller warning—half the size—would accomplish [the government's] stated goals." As such, the court held that the warnings violated the First Amendment "by chilling protected speech." Accordingly, when Congress and federal agencies consider adopting new commercial disclosure requirements, or reauthorizing old ones, it may be wise to develop a record with more evidence demonstrating a need for the regulation. Under any level of scrutiny, courts will examine the government's asserted purpose for the legislation, as well as how closely tailored the disclosure requirement is to achieve that purpose. Under Zauderer , particularly in light of NIFLA , courts may ask for evidence to support the government's claim that the regulated speech is misleading or that the government has some other interest in regulating that speech, and will likely scrutinize the disclosure requirement to make sure it is not unduly burdensome. Under intermediate scrutiny or strict scrutiny, a court may also ask whether the government considered alternative policies that would be less restrictive of speech, examining more closely the government's justifications for choosing a disclosure requirement.
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Federal law contains a wide variety of disclosure requirements, including food labels, securities registrations, and disclosures about prescription drugs in direct-to-consumer advertising. These disclosure provisions require commercial actors to make statements that they otherwise might not, compelling speech and implicating the Free Speech Clause of the First Amendment. Nonetheless, while commercial disclosure requirements may regulate protected speech, that fact in and of itself does not render such provisions unconstitutional. The Supreme Court has historically allowed greater regulation of commercial speech than of other types of speech. Since at least the mid-1970s, however, the Supreme Court has been increasingly protective of commercial speech. This trend, along with other developments in First Amendment law, has led some commentators to question whether the Supreme Court might apply a stricter test in assessing commercial disclosure requirements in the near future. Nonetheless, governing Supreme Court precedent provides that disclosure requirements generally receive lesser judicial scrutiny when they compel only commercial speech, as opposed to noncommercial speech. In National Institute of Family and Life Advocates v. Becerra, a decision released in June 2018, the Supreme Court explained that it has applied a lower level of scrutiny to compelled disclosures under two circumstances. First, the Supreme Court has sometimes upheld laws that regulate commercial speech if the speech regulation is part of a larger regulatory scheme that is focused on conduct and only incidentally burdens speech. If a law is properly characterized as a regulation of conduct, rather than speech, then it may be subject to rational basis review, a deferential standard that asks only whether the regulation is a rational way to address the problem. However, it can be difficult to distinguish speech from conduct, and the Supreme Court has not frequently invoked this doctrine to uphold laws against First Amendment challenges. Second, the Supreme Court has sometimes applied a lower level of scrutiny to certain commercial disclosure requirements under the authority of a 1985 case, Zauderer v. Office of Disciplinary Counsel. In Zauderer, the Court upheld a disclosure requirement after noting that the challenged provision compelled only "factual and uncontroversial information about the terms under which . . . services will be available." The Court said that under the circumstances, the service provider's First Amendment rights were sufficiently protected because the disclosure requirement was "reasonably related" to the government's interest "in preventing deception of consumers." Lower courts have generally interpreted Zauderer to mean that if a commercial disclosure provision requires only "factual and uncontroversial information" about the goods or services being offered, it should be analyzed under rational basis review. If a commercial disclosure requirement does not qualify for review under Zauderer, then it will most likely be analyzed under the intermediate standard that generally applies to government actions that regulate commercial speech. Some legal scholars have argued that recent Supreme Court case law suggests the Court may subject commercial disclosure provisions to stricter scrutiny in the future, either by limiting the factual circumstances under which these two doctrines apply or by creating express exceptions to these doctrines. If a court applies a heightened level of scrutiny, it may require the government to present more evidence of the problem it is seeking to remedy and stronger justifications for choosing a disclosure requirement to achieve its purposes.
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After over 15 years characterized by conflict, violence, and zero-sum political competition, Iraqis are working to open a new chapter in their country's development and are debating the future of their relationship with the United States. The Iraqi government declared military victory against the Islamic State organization in December 2017, but insurgent attacks by remaining IS fighters continue to threaten Iraqis in some areas. Iraq's security forces are rebuilding after years of intense fighting. Notwithstanding significant U.S. and international assistance, Iraq's security forces still lack some operational, intelligence, logistical, and management capabilities needed to protect their country. More than 4 million internally displaced Iraqis have returned home, but extensive stabilization and reconstruction are needed in liberated areas. An estimated 1.7 million Iraqis remain as internally displaced persons (IDPs), and Iraqi authorities have identified $88 billion in reconstruction needs over the next decade. U.S. and other foreign troops remain in Iraq at the invitation of the Iraqi government and provide advisory and training support to the Iraqi Security Forces (ISF), including peshmerga forces associated with the Kurdistan Regional Government (KRG). However, some Iraqi political groups—including some with ties to Iran—are pushing for U.S. and other foreign troops to depart; they may force formal consideration of a resolution to that effect in the Iraqi parliament. Such a resolution would likely be nonbinding (if adopted), but nevertheless could create significant political and diplomatic complications for U.S. and Iraqi leaders, and might prompt more fundamental policy reconsiderations on both sides. The Iranian government has viewed instability in neighboring Iraq as a threat and an opportunity since 2003, and works to influence the security sector decisions of Iraqi leaders. It also maintains ties to some armed groups in Iraq, including some units of the Popular Mobilization Forces (PMF)—volunteer militias recruited to fight the Islamic State. The PMF have been recognized as an enduring component of Iraq's national security establishment pursuant to a 2016 law that calls for their integration under existing command structures and administration. U.S. officials have recognized the contributions that PMF volunteers have made to Iraq's fight against the Islamic State; they also remain wary of the potential for Iran-linked elements of the PMF to evolve into permanent proxy forces, whether they remain tied to the Iraqi state or work outside formal Iraqi government and military control. U.S. policy seeks to support the long-term development of Iraq's military, counterterrorism, and police services as alternatives to the continued use of PMF units to secure Iraq's borders, communities, and territory recaptured from the Islamic State. U.S. concerns about Iranian government policies have intensified in recent years, and Iraq has become a venue for U.S.-Iranian competition. Iran's government supported insurgent attacks on U.S. forces during the U.S. presence from 2003 to 2011. Since then, U.S.-Iranian competition has remained contained and nonviolent, but there is no certainty it will remain so, as demonstrated by indirect fire attacks in 2018 on U.S. diplomatic facilities, attacks attributed by U.S. officials to Iranian proxy groups. Iraqi leaders are trying to prevent their country from being used as a battleground for regional and international rivalries and seek to build positive, nonexclusive ties to their neighbors and global powers. Broad U.S. efforts to put pressure on Iran extend to the Iraqi energy sector, where years of sanctions, conflict, neglect, and mismanagement have left Iraq dependent on purchases of natural gas and electricity from its Iranian neighbors. Since 2018, Iraqi leaders have sought relief from U.S. sanctions on related transactions with Iran. The Trump Administration has granted temporary permissions, and current U.S. initiatives encourage Iraq to diversify its energy relationships with its neighbors and develop more independence for its energy sector. U.S. officials promote U.S. companies as potential partners for Iraq through the expansion of domestic electricity generation capacity and the introduction of technology to capture the large amounts of natural gas that are currently flared (burned at wellheads). Oil production and exports are the lifeblood of Iraq's public finances and economy and have reached all-time highs. Oil export revenues provide Iraq's government with significant financial resources, but oil proceeds also have contributed to the creation of a state-centric economic model in which public sector employment and contracting have crowded out private sector activity. Public investment and reconstruction spending is financed through deficit spending, borrowing, and international aid, and Iraq's finances remain vulnerable to price changes in global oil markets. While Iraq's young, growing population and geographic location ( Table 1 ) make it an attractive market for foreign investment, bureaucratic constraints, service interruptions, corruption, and security and political concerns continue to deter some investors. The U.S. government supports Iraq's compliance with reform targets pursuant to IMF agreements and promotes an expansion of U.S.-Iraqi trade and investment ties. However, future U.S. investment prospects in Iraq may be contingent on the broader political and security relationship. Overall, the United States faces complicated choices in Iraq. The 2003 invasion unseated an adversarial regime, but unleashed more than a decade of violent insurgency and terrorism that divided Iraqis, while creating opportunities for Iran to strengthen its influence in Iraq and across the region. Since 2003, the United States has invested both militarily and financially in stabilizing Iraq. Since 2014, U.S. policy toward Iraq has focused on ensuring the defeat of the Islamic State as a transnational insurgent and terrorist threat. The Islamic State threat has been reduced, but Iraqi security needs remain considerable and both countries are examining the impetus and terms for continued U.S. investment in Iraq. Successive U.S. Administrations have sought to keep U.S. involvement and investment minimal relative to the 2003-2011 era, pursuing U.S. interests through partnership with various entities in Iraq and the development of those partners' capabilities, rather than through extensive U.S. military deployments. U.S. economic assistance bolsters Iraq's ability to attract lending support and is aimed at improving the government's effectiveness and public financial management. The United States is the leading provider of humanitarian assistance to Iraq and also supports post-IS stabilization activities across the country through grants to United Nations agencies and other entities. The Trump Administration has sustained a cooperative relationship with the Iraqi government and has requested funding for FY2020 to support Iraq's stabilization and continue security training for Iraqi security forces. The size and mission of the U.S. military presence in Iraq have evolved as conditions on the ground have changed since 2017; they could change further if Iraqi officials revise their current requests for continued U.S. and international security assistance. The 116 th Congress has appropriated funds to provide security assistance, humanitarian relief, and foreign aid for Iraq ( P.L. 116-6 ), and is considering appropriations and authorization requests for FY2020 that would largely continue U.S. policies and programs on current terms. It remains to be seen whether Iraq and the United States will be able to pursue opportunities to build a bilateral relationship that is less defined by conflict and its aftermath. To do so, leaders on both sides will likely have to continue creatively managing unusually complex political and security challenges. Since the U.S.-led ouster of Saddam Hussein in 2003, Iraq's Shia Arab majority has exercised greater national power both in concert and in competition with the country's Sunni Arab and Kurdish minorities. While intercommunal identities and rivalries remain politically relevant, competition among Shia movements and coalition building across communal groups are now major factors in Iraqi politics. Notwithstanding their ethnic and religious diversity and political differences, many Iraqis advance similar demands for improved security, government effectiveness, and economic opportunity. Some Iraqi politicians have broadened their political and economic narratives in an attempt to appeal to disaffected citizens across the country. Years of conflict, poor service delivery, corruption, and sacrifice have strained the population's patience with the status quo, adding to the pressures that leaders face from the country's uncertain domestic and regional security environment. Although the Islamic State's exclusive control over distinct territories in Iraq has now ended, the U.S. intelligence community assessed in 2018 that the Islamic State "has started—and probably will maintain—a robust insurgency in Iraq and Syria as part of a long-term strategy to ultimately enable the reemergence of its so-called caliphate." In January 2019, Director of National Intelligence Dan Coats told Congress that the Islamic State "remains a terrorist and insurgent threat and will seek to exploit Sunni grievances with Baghdad and societal instability to eventually regain Iraqi territory against Iraqi security forces that are stretched thin." The legacy of the war with the Islamic State strains security in Iraq in two other important ways. First, the Popular Mobilization Committee (PMC) and its militias—the mostly Shia Popular Mobilization Forces (PMF) recruited to fight the Islamic State—have been recognized as enduring components of Iraq's national security establishment. This is the case even as many PMF units continue to operate outside the bounds of their authorizing legislation and the control of the Prime Minister. The U.S. intelligence community considers Iran-linked Shia elements of the PMF to be the "the primary threat to U.S. personnel" in Iraq. Second, national and KRG forces remain deployed across from each other along contested lines of control while their respective leaders are engaged in negotiations over a host of sensitive issues. Following a Kurdish referendum on independence in 2017, the Iraqi government expelled Kurdish peshmerga from some disputed territories they had secured from the Islamic State, and IS fighters now appear to be exploiting gaps in ISF and Kurdish security to survive. PMF units remain active throughout the territories in dispute between the Iraqi national government and the federally recognized Kurdistan Region of northern Iraq, with local populations in some areas opposed to the PMF presence. Amid unrest in southern Iraq during late summer 2018, the State Department directed the temporary evacuation of U.S. personnel and temporary closure of the U.S. Consulate in Basra after indirect fire attacks on the consulate and the U.S. Embassy compound in Baghdad. U.S. officials attributed the attacks to Iran-backed forces and said that the United States would hold Iran accountable and would respond directly to attacks on U.S. facilities or personnel by Iran-backed entities. The incidents highlight the potential for U.S.-Iran tensions to escalate in Iraq. Iraqis held national legislative elections in May 2018, electing members for four-year terms in the 329 seat Council of Representatives (COR), Iraq's unicameral legislature. Turnout was lower in the 2018 COR election than in past national elections, and reported irregularities led to a months-long recount effort that delayed certification of the results until August. Political factions spent the summer months negotiating in a bid to identify the largest bloc within the COR—the parliamentary bloc charged with proposing a prime minister and new Iraqi cabinet ( Figure 2 ). The distribution of seats and alignment of actors precluded the emergence of a dominant coalition. The Sa'irun (On the March) coalition led by populist Shia cleric and longtime U.S. antagonist Muqtada al Sadr's Istiqama (Integrity) list placed first in the election (54 seats), followed by the predominantly Shia Fatah (Conquest) coalition led by Hadi al Ameri of the Badr Organization (48 seats). Fatah includes several individuals formerly associated with the Popular Mobilization Committee (PMC) and its militias—the mostly Shia Popular Mobilization Forces (PMF), which were recruited to fight the Islamic State. Those elected include some figures with ties to Iran (see " The Future of the Popular Mobilization Forces " and Figure 5 below). Former Prime Minister Haider al Abadi's Nasr (Victory) coalition underperformed expectations to place third (42 seats), while former Prime Minister Nouri al Maliki's State of Law coalition, Ammar al Hakim's Hikma (Wisdom) list, and Iyad Allawi's Wataniya (National) list also won significant blocs of seats. Among Kurdish parties, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) won the most seats, and smaller Kurdish opposition lists protested alleged irregularities. As negotiations continued, Nasr and Sa'irun members joined with others to form the Islah (Reform) bloc in the COR, while Fatah and State of Law formed the core of a rival Bin'a (Reconstruction) bloc. Under an informal agreement developed through the formation of successive governments, Iraq's Prime Minister has been a Shia Arab, the President has been a Kurd, and the COR Speaker has been a Sunni Arab. In September, the first session of the newly elected COR was held, and members elected Mohammed al Halbousi, the Sunni Arab governor of Anbar, as COR Speaker. Hassan al Kaabi of the Sa'irun list and Bashir Hajji Haddad of the KDP were elected as First and Second Deputy Speaker, respectively. In October, the COR met to elect Iraq's President, with rival Kurdish parties nominating competing candidates. COR members chose the PUK candidate–former KRG Prime Minister and former Iraqi Deputy Prime Minister Barham Salih—in the second round of voting. Salih, in turn, named former Oil Minister Adel Abd al Mahdi as Prime Minister-designate and directed him to assemble a slate of cabinet officials for COR approval. Abd al Mahdi is a consensus Shia Arab leader acceptable to the rival Shia groups in the Islah and Bina blocs, but he does not lead a party or parliamentary group of his own. Some observers of Iraqi politics assess Abd al Mahdi as generally pliable and unable to assert himself relative to others who have large followings or command armed factions. COR members have confirmed most of Abd al Mahdi's cabinet nominees, but the main political blocs remain at an impasse over the Ministries of Interior, Defense, and Justice. As government formation talks proceeded during the summer of 2018, large protests and violence in southern Iraq highlighted some citizens' outrage with electricity and water shortages, lack of economic opportunity, and corruption. Unrest appeared to be amplified in some instances by citizens' anger about heavy-handed responses by security forces and militia groups. Dissatisfaction exploded in the southern province of Basra during August and September, culminating in several days and nights of mass demonstrations and the burning by protestors of the Iranian consulate in Basra and the offices of many leading political groups and militia movements. Arguably, the Abd al Mahdi government's success or failure in demonstrating progress on the issues that sparked the protests will be an important factor in determining its viability and longevity. As of March 2019, Iraqi security operations against IS fighters are ongoing in governorates in which the group formerly controlled territory or operated—Anbar, Ninewa, Salah al Din, Kirkuk, and Diyala. These operations are intended to disrupt IS fighters' efforts to reestablish themselves as an organized threat and keep them separated from population centers. Press accounts and U.S. government reports describe continuing IS attacks on Iraqi Security Forces and Popular Mobilization Forces, particularly in rural areas. Independent analysts describe dynamics in parts of these governorates in which IS fighters threaten, intimidate, and kill citizens in areas at night or where Iraq's national security forces are absent. In some areas, new displacement has occurred as civilians have fled IS attacks. Overall, however violence against civilians has dropped considerably from its 2014 highs ( Figure 3 ). In cities like Mosul and Baghdad residents and visitors have enjoyed increased freedom of movement and security, although IS activity is reported in Mosul and fatal security incidents have occurred in areas near Baghdad and several other locations since January 2019 ( Figure 4 ). Iraq's Popular Mobilization Committee (PMC) and its associated militias—the Popular Mobilization Forces (PMF)—were founded in 2014 and have contributed to Iraq's fight against the Islamic State, but they have come to present an implicit challenge to the authority of the state. The PMF are largely but not solely drawn from Iraq's Shia Arab majority: Sunni, Turkmen, and Christian PMF militia also remain active. Despite expressing appreciation for PMF contributions to the fight against IS, some Iraqis and outsiders have raised concerns about the future of the PMC/PMF and some of its members' ties to Iran. At issue has been the unwillingness of some PMC/PMF entities to subordinate themselves to the command of Iraq's elected government and the ongoing participation in PMC/PMF operations of groups reported to receive direct Iranian support. As noted above, the U.S. intelligence community has described Iran-linked Shia militia—whether PMF or not—as the "primary threat" to U.S. personnel in Iraq, and has suggested that the threat posed by Iran-linked groups will grow as they press for the United States to withdraw its forces from Iraq. Many PMF-associated groups and figures participated in the May 2018 national elections under the auspices of the Fatah coalition headed by Badr Organization leader Hadi al Ameri. Ameri and other prominent PMF-linked figures such as Asa'ib Ahl al Haq (League of the Righteous) leader Qa'is al Khazali nominally disassociated themselves from the PMC/PMF in late 2017, in line with legal prohibitions on the participation of PMC/PMF officials in politics. Nevertheless, their movements' supporters and associated units remain integral to some ongoing PMF operations, and the Fatah coalition's campaign arguably benefited from its PMF association. During the election and in its aftermath, the key unresolved issue with regard to the PMC/PMF has remained the incomplete implementation of a 2016 law calling for the PMF to be incorporated as a permanent part of Iraq's national security establishment. In addition to outlining salary and benefit arrangements important to individual PMF volunteers, the law calls for all PMF units to be placed fully under the authority of the commander-in-chief (Prime Minister) and to be subject to military discipline and organization. Through early 2019, U.S. government reporting states that while some PMF units are being administered in accordance with the law, most remain outside the law's prescribed structure. This includes some units associated with Shia groups identified by U.S. government reports as receiving or as having received Iranian support. In January 2019, the U.S. intelligence community assessed that the PMC/PMF "plan to use newfound political power gained through positions in the new government to reduce or remove the U.S. military presence while competing with the Iraqi security forces for state resources." In general, the popularity of the PMF and broadly expressed popular respect for the sacrifices made by individual volunteers in the fight against the Islamic State create complicated political questions for Iraqi leaders. Iraqi law does not call for or foresee the dismantling of the PMC/PMF structure, and proposals to the contrary appear to be politically untenable at present. Given the ongoing role PMF units are playing in security operations against remnants of the Islamic State in some areas, rapid, wholesale redeployments of PMF units might create new opportunities for IS fighters to exploit in areas where replacement forces are not immediately available. That said, U.S. military officials report that "competition over areas to operate and influence between the PMF and the ISF will likely result in violence, abuse, and tension in areas where both entities operate." The Kurdistan Region of northern Iraq (KRI) enjoys considerable administrative autonomy under the terms of Iraq's 2005 federal constitution, but issues concerning territory, security, energy, and revenue sharing continue to strain ties between the Kurdistan Regional Government (KRG) and the national government in Baghdad. In September 2017, the KRG held a controversial advisory referendum on independence, amplifying political tensions with the national government (see textbox below). The referendum was followed by a security crisis as Iraqi Security Forces and PMF fighters reentered some disputed territories that had been held by KRG peshmerga forces. P eshmerga fighters also withdrew from the city of Kirkuk and much of the governorate. Baghdad and the KRG have since agreed on a number of issues, including border and customs controls, the export of oil from some KRG-controlled fields, and the transfer of funds to pay the salaries of some KRG civil servants. As talks continue, the ISF and peshmerga remain deployed across from each other at various fronts throughout the disputed territories ( Figure 6 ). The KRG delayed overdue legislative elections for the Kurdistan National Assembly in the wake of the referendum crisis and held them on September 30, 2018. Kurdish leaders have since been engaged in regional government formation talks while also participating in cabinet formation and budget negotiations at the national level. The KDP won a plurality (45) of the 111 KNA seats in the September 2018 election, with the Patriotic Union of Kurdistan (PUK) and smaller opposition and Islamist parties splitting the balance. With longtime KDP leader Masoud Barzani's term as president having expired in 2015, his nephew, KRG Prime Minister Nechirvan Barzani, appears set to succeed him. Masoud Barzani's son, security official Masrour Barzani, seems set to assume the KRG prime ministership. Since the election, factions within the PUK have appeared to have differences of opinion over KRG cabinet formation, while KDP and PUK differences have been apparent at the national level. During government formation talks in Baghdad, the KDP sought to name the Kurdish candidate for the Iraqi national presidency, but a majority of COR members instead chose Barham Salih, a PUK member. In March 2019, KDP and PUK leaders announced a four-year political agreement that reportedly includes joint commitments on the formation of the new KRG government and candidates for the Iraqi national Minister of Justice position and governorship of Kirkuk. U.S. officials have encouraged Kurds and other Iraqis to engage on issues of dispute and to avoid unilateral military actions. U.S. officials encourage improved security cooperation between the KRG and Baghdad, especially since IS remnants appear to be exploiting gaps created by the standoff in the disputed territories. KRG officials continue to express concern about the potential for an IS resurgence and chafe at operations by some PMF units in areas adjacent to the KRI. U.N. officials report several issues of ongoing humanitarian and protection concerns for displaced and returning populations and the host communities assisting them. With a range of needs and vulnerabilities, these populations require different forms of support, from immediate humanitarian assistance to resources for early recovery. Protection is a key priority in areas of displacement, where for example, harassment of displaced persons by armed actors and threats of forced return have occurred, as well as in areas of return. By December 2017, more Iraqis had returned to their home areas than those who had remained as internally displaced persons (IDPs) or who were becoming newly displaced. Nevertheless, humanitarian conditions remain difficult in many conflict-affected areas of Iraq. As of February 28, 2019, more than 4.2 million Iraqis displaced after 2014 had returned to their districts, while more than 1.7 million individuals remained as displaced persons (IDPs). Ninewa governorate hosts the most IDPs of any single governorate (nearly one-third of the total), reflecting the lingering effects of the intense military operations against the Islamic State in Mosul and other areas during 2017 ( Table 2 ). Estimates suggest thousands of civilians were killed or wounded during the Mosul battle, which displaced more than 1 million people. The Kurdistan Region of Iraq (KRI) hosts nearly 700,000 IDPs (approximately 40% of the 1.7 million remaining IDPs nationwide). IDP numbers in the KRI have declined since 2017, though not as rapidly as in some other governorates. According to IOM, conditions for IDPs in Dohuk governorate remain the most challenging in the KRI, where most IDPs live in camps or critical shelters (makeshift tents/abandoned buildings/informal settlements), according to International Organization for Migration surveys. The U.N. Office for the Coordination of Humanitarian Affairs (UNOCHA) 2019 funding appeal, the Iraq Humanitarian Response Plan (HRP), anticipates that as many as 6.7 million Iraqis will require some form of humanitarian assistance in 2019 and seeks $701 million for 1.75 million of the most vulnerable Iraqis. As of March 2019, the appeal had received $6.5 million (1%). The United States was the top donor to the 2018 Iraq HRP. Since 2014, the United States has contributed nearly $2.5 billion to humanitarian relief efforts in Iraq, including more than $498 million in humanitarian support in FY2018. U.S. stabilization assistance to areas of Iraq that have been liberated from the Islamic State is directed through the United Nations Development Program (UNDP)-administered Funding Facility for Stabilization (FFS) and through other channels. According to UNDP data, the FFS has received more than $830 million in resources since its inception in mid-2015, with 1,388 projects reported completed and a further 978 projects underway or planned with the support of UNDP-managed funding. In January 2019, UNDP identified $426 million in stabilization program funding shortfalls in five priority areas in Ninewa, Anbar, and Salah al Din governorates "deemed to be the most at risk to future conflict" and "integral for the broader stabilization of Iraq." The UNDP points to unexploded ordnance, customs clearance delays, and the growth in volume and scope of FFS projects as challenges to its ongoing work. At a February 2018 reconstruction conference in Kuwait, Iraqi authorities described more than $88 billion in short- and medium-term reconstruction needs, spanning various sectors and different areas of the country. Countries participating in the conference offered approximately $30 billion worth of loans, investment pledges, export credit arrangements, and grants in response. The Trump Administration actively supported the participation of U.S. companies in the conference and announced its intent to pursue $3 billion in Export-Import Bank support for Iraq. Iraqi leaders hope to attract considerable private sector investment to help finance Iraq's reconstruction needs and underwrite a new economic chapter for the country. The size of Iraq's internal market and its advantages as a low-cost energy producer with identified infrastructure investment needs help make it attractive to investors. Overcoming persistent concerns about security, service reliability, and corruption, however, may prove challenging. The formation of the new Iraqi government and its success or failure in pursuing reforms may provide key signals to parties exploring investment opportunities. The public finances of the national government and the KRG remain strained, amplifying the pressure on leaders working to address the country's security and service-provision challenges. The combined effects of lower global oil prices from 2014 through mid-2017, expansive public-sector liabilities, and the costs of the military campaign against the Islamic State have exacerbated national budget deficits. The IMF estimated Iraq's 2017-2018 financing needs at 19% of GDP. Oil exports provide nearly 90% of public-sector revenue in Iraq, while non-oil sector growth has been hindered over time by insecurity, weak service delivery, and corruption. The 2019 budget expands public salaries and investments. Iraq's oil production and exports have increased since 2016, but fluctuations in oil prices undermined revenue gains until the latter half of 2017. Revenues have since improved, and Iraq has agreed to manage its overall oil production in line with mutually agreed Organization of the Petroleum Exporting Countries (OPEC) output limits. In February 2019, Iraq exported an average of nearly 4 million barrels per day (mbd, including KRG-administered oil exports), above the March 2019 budget's 3.9 mbd export assumption and at prices above the budget's $56 per barrel benchmark. The IMF projects modest GDP growth over the next five years and expects growth to be stronger in the non-oil sector if Iraq's implementation of agreed measures continues as oil output and exports plateau. Fiscal pressures are more acute in the Kurdistan region, where the fallout from the national government's response to the September 2017 referendum further strained the KRG's already weakened ability to pay salaries to its public-sector employees and security forces. The KRG's loss of control over significant oil resources in Kirkuk governorate, coupled with changes implemented by national government authorities over shipments of oil from those fields via the KRG-controlled export pipeline to Turkey, contributed to a sharp decline in revenue for the KRG during 2018. The resumption of exports from Kirkuk in late 2018, and an agreement between the KRG and Baghdad providing for the payment of some public sector salaries in exchange for KRG oil export proceed deposits in national accounts, has improved the situation as of March 2019. Related issues shaped consideration of the 2018 and 2019 budgets in the COR, with Kurdish representatives criticizing the government's budget proposals to allocate the KRG a smaller percentage of funds to the KRI than the 17% benchmark reflected in previous budgets. National government officials argue that KRG resources should be based on a revised population estimate, and agreements reached for the national government to pay KRG civil service and peshmerga salaries in the 2019 budget are linked to the KRG placing 250,000 barrels per day of oil exports under federal control in exchange for financial all ocations for verified expenses. KRG oil contracts may limit the region's ability to meet this target, but the transfer of national funds to the KRG appears likely to ease fiscal pressures that had required payment limits that fueled protests. Iraqi military and counterterrorism operations against remnants of the Islamic State group are ongoing, and the United States military and its coalition partners continue to provide support to those efforts at the request of the Iraqi government. U.S. and coalition training efforts for various Iraqi security forces are ongoing at different locations, including in the Kurdistan region, with U.S. activities carried out pursuant to the authorities granted by Congress for the Iraq Train and Equip Program and the Office of Security Cooperation at the U.S. Embassy in Baghdad (OSC-I). From FY2015 through FY2019, Congress authorized and appropriated more than $5.8 billion for train and equip assistance in Iraq ( Table 3 ). The Trump Administration is requesting an additional $745 million in FY2020 defense funding for Iraq programs under the Counter-ISIS Train and Equip Fund. The request proposes continued support to the Iraqi Counterterrorism Service (CTS), Army, Federal Police, Border Guards, Emergency Response Battalions, Energy Police, Special Forces ( Qwat Khasah ), and KRG Ministry of Peshmerga forces (see below). The request seeks $45 million for OSC-I. The Trump Administration, like the Obama Administration, has cited the 2001 Authorization for Use of Military Force (AUMF, P.L. 107-40 ) as the domestic legal authorization for U.S. military operations against the Islamic State in Iraq and has notified Congress of operations against the Islamic State in periodic reports on the 2002 Iraq AUMF ( P.L. 107-243 ). The U.S. government has referred to both collective and individual self-defense provisions of the U.N. Charter as the relevant international legal justifications for ongoing U.S. operations in Iraq and Syria. The U.S. military presence in Iraq is governed by an exchange of diplomatic notes that reference the security provisions of the 2008 bilateral Strategic Framework Agreement. To date, this arrangement has not required the approval of a separate security agreement by Iraq's Council of Representatives. U.S. military officials stopped officially reporting the size of the U.S. force in Iraq in 2017, but have confirmed that there has been a reduction in the number of U.S. military personnel and changes in U.S. capabilities in Iraq since that time. U.S. military sources have stated that the "continued coalition presence in Iraq will be conditions-based, proportional to the need, and in coordination with the government of Iraq." As of March 2019, 71 U.S. troops have been killed or have died as part of Operation Inherent Resolve (OIR), and 77 have been wounded. Through September 2018, OIR operations since August 2014 had cost $28.5 billion. As of March 2019, U.S. and coalition forces have trained more than 190,000 Iraqi security personnel since 2014, including more than 30,000 Kurdish peshmerga . Notwithstanding these results, in September 2018, Department of Defense (DOD) officials told the DOD Inspector General that there remains "a significant shortfall in Coalition trainers" and confirmed that coalition forces are working to develop more capable and numerous Iraqi trainers to meet identified needs. In 2018, NATO leaders agreed to launch NATO Mission Iraq (NMI) to support Iraqi security sector reform and military professional development. Overall, DOD reports indicate that Iraq's security forces continue to exhibit "systemic weaknesses" including poor intelligence gathering and fusion, operational insecurity, ongoing corruption, reliance on coalition aircraft for air support, and overly centralized leadership, among other problems. U.S. and coalition plans for 2019 include a more intense focus on developing the capacity of various Iraqi police, border, and energy forces to hold recaptured territory. Through 2018, coalition advisers prioritized assistance to Iraqi forces conducting offensive operations against the Islamic State. In November 2018, the Lead Inspector General for Overseas Contingency Operations (LIG-OCO) questioned whether the coalition "has sufficient advisors to support both ongoing offensive operations and to help hold forces secure areas cleared." U.S. arms transfers and security assistance to Iraq are provided with the understanding that U.S. equipment will be responsibly used by its intended recipients, and the 115 th Congress was informed about the unintended or inappropriate use of U.S.-origin defense equipment, including a now-resolved case involving the possession and use of U.S.-origin tanks by elements of the Popular Mobilization Forces. Since 2014, the U.S. government has provided Iraq with State Department- and USAID-administered assistance to support a range of security and economic objectives (in addition to the humanitarian assistance mentioned above). U.S. Foreign Military Financing (FMF) funds have supported the costs of continued loan-funded purchases of U.S. defense equipment and have helped fund Iraqi defense institution-building efforts. U.S. loan guarantees also have supported well-subscribed Iraqi bond issues to help Baghdad cover its fiscal deficits. Since 2014, the United States also has contributed nearly $2.5 billion to humanitarian relief efforts in Iraq, including more than $498 million in humanitarian support in FY2018. The Trump Administration also has directed additional support since 2017 to persecuted religious minority groups in Iraq, negotiating with UNDP to direct U.S. contributions to the UNDP Funding Facility for Stabilization (FFS) to the Ninewa Plains and other minority populated areas of northern Iraq (see " Stabilization and Issues Affecting Religious and Ethnic Minorities " below). The FY2019 foreign operations appropriations act ( H.J.Res. 31 , P.L. 116-6 ) appropriates $150 million in Economic Support Fund (ESF) aid, along with $250 million in FMF and other security assistance funds. Of the ESF funds, $50 million is to be made available for stabilization purposes, according to the act's explanatory statement. The act also directs funds to support transitional justice programs and accountability for genocide, crimes against humanity, and war crimes in Iraq. The Administration's FY2020 request for bilateral assistance seeks more than $165 million to continue stabilization and other nonmilitary assistance programs in Iraq ( Table 4 ). The United States also contributes to Iraqi programs to stabilize the Mosul Dam on the Tigris River, which remains at risk of collapse due to structural flaws, overlooked maintenance, and its compromised underlying geology. Collapse of the dam could cause deadly, catastrophic damage downstream. In September 2018, the State Department noted that Iraq is working to stabilize the dam, but judged that "it is impossible to accurately predict the likelihood of the dam's failing." State Department reports on human rights conditions and religious freedom in Iraq have documented the difficulties faced by religious and ethnic minorities in the country for years. In some cases, these difficulties and security risks have driven members of minority groups to flee Iraq or to take shelter in different areas of the country, whether with fellow group members or in new communities. Minority groups that live in areas subject to long-running territorial disputes between Iraq's national government and the KRG face additional interference and exploitation by larger groups for political, economic, or security reasons. Members of diverse minority communities express a variety of territorial claims and administrative preferences, both among and within their own groups. While much attention is focused on potential intimidation or coercion of minorities by majority groups, disputes within and among minority communities also have the potential to generate tension and violence. In October 2017, Vice President Mike Pence said in a speech that the U.S. government would direct more support to persecuted religious minority groups in the Middle East, including in Iraq. As part of this initiative, the Trump Administration has negotiated with UNDP to direct U.S. contributions to the UNDP Funding Facility for Stabilization (FFS) to the Ninewa Plains and other minority-populated areas of northern Iraq. In October 2017, USAID solicited proposals in a Broad Agency Announcement for cooperative programs "to facilitate the safe and voluntary return of Internally Displaced Persons (IDPs) to their homes in the Ninewa plains and western Ninewa of Iraq and to encourage those who already are in their communities to remain there." In parallel, USAID notified Congress of its intent to obligate $14 million in FY2017 ESF-OCO for stabilization programs. In January 2018, USAID officials released to UNDP a $75 million first tranche of stabilization assistance from an overall pledge of $150 million that had been announced in July 2017 and notified for planned obligation to Congress in April 2017. According to the January 2018 announcement, USAID "renegotiated" the contribution agreement with UNDP so that $55 million of the $75 million payment "will address the needs of vulnerable religious and ethnic minority communities in Ninewa Province, especially those who have been victims of atrocities by ISIS" with a focus on "restoring services such as water, electricity, sewage, health, and education." USAID Administrator Mark Green visited Iraq in June 2018 and engaged with ethnic and religious minority groups in Ninewa. He also announced $10 million in awards under USAID's October 2017 proposal solicitation. At the end of the third quarter of 2018, UNDP reported that 259 projects in minority communities were complete out of 486 overall projects completed, planned, or under way in the Ninewa Plains. Inclusive of the January announcement, the United States has provided $216.8 million to support the FFS—which remains the main international conduit for post-IS stabilization assistance in liberated areas of Iraq. According to UNDP, overall stabilization priorities for the FFS program are set by a steering committee chaired by the government of Iraq, with governorate-level Iraqi authorities directly responsible for implementation. UNDP officials report that earmarking of funding by donors "can result in funding being directed away from areas highlighted by the Iraqi authorities as being in great need." In January 2019, UNDP identified $426 million in stabilization program funding shortfalls in five priority areas "deemed to be the most at risk to future conflict" and "integral for the broader stabilization of Iraq." Trump Administration requests to Congress for FY2018-FY2020 monies for Iraq programs included proposals to fund continued U.S. contributions to post-IS stabilization. Additional funds notified to Congress for U.N.-managed stabilization programs in Iraq were obligated during 2018. U.S. officials are currently seeking greater Iraqi and international contributions to stabilization efforts in Iraq and Syria. The Trump Administration seeks more proactively to challenge, contain, and roll back Iran's regional influence, while it attempts to solidify a long-term partnership with the government of Iraq and to support Iraq's sovereignty, unity, security, and economic stability. These parallel (and sometimes competing) goals may raise several policy questions for U.S. officials and Members of Congress, including the makeup and viability of the Iraqi government; Iraqi leaders' approaches to Iran-backed groups and the future of militia forces mobilized to fight the Islamic State; Iraq's compliance with U.S. sanctions on Iran; the future extent and roles of the U.S. military presence in Iraq; the terms and conditions associated with U.S. security assistance to Iraqi forces; U.S. relations with Iraqi constituent groups such as the Kurds; and potential responses to U.S. efforts to contain or confront Iran-aligned entities in Iraq or elsewhere in the region. Iran-linked groups in Iraq have directly targeted U.S. forces in the past; some of them may be able and willing to do so again under certain circumstances. U.S. officials blamed these groups for apparent indirect attacks on U.S. diplomatic facilities in Basra and Baghdad in 2018. These attacks followed reports that Iran had transferred short-range ballistic missiles to Iran-backed militias in Iraq, reportedly including Kata'ib Hezbollah. The 115 th Congress considered proposals directing the Administration to impose U.S. sanctions on some Iran-aligned Iraqi groups, and enacted legislation containing reporting requirements focused on Iranian support to nonstate actors in Iraq and other countries. Iran has sometimes intervened in Iraq directly, including by conducting air strikes against Islamic State forces advancing on the border with Iran in 2014 and by launching missiles against Iranian Kurdish groups encamped in parts of northern Iraq in 2018. New or existing efforts to sideline Iran-backed groups, via sanctions or other means, might challenge Iran's influence in Iraq in ways that could serve stated U.S. government goals. The United States government has placed sanctions on some Iran-linked groups and individuals for threatening Iraq's stability and for involvement in terrorism. Some analysts have argued "the timing and sequencing" of sanctions "is critical to maximizing desired effects and minimizing Tehran's ability to exploit Iraqi blowback." U.S. efforts to counter Iranian activities in Iraq and elsewhere in the region also have the potential to complicate the pursuit of other U.S. interests in Iraq, including U.S. counter-IS operations and training. When President Trump in a February 2019 interview referred to the U.S. presence in Iraq as a tool to monitor Iranian activity, several Iraqi leaders raised concerns. Iran-aligned Iraqi groups since have referred to President Trump's statements in their political campaign to force a U.S. withdrawal. More broadly, U.S. confrontation with Iran and its allies in Iraq could disrupt relations among parties to the consensus government in Baghdad, or even precipitate civil conflict, undermining the U.S. goal of ensuring the stability and authority of the Iraqi government. While a wide range of Iraqi actors have ties to Iran, the nature of those ties differs, and treating these diverse groups uniformly risks ostracizing potential U.S. partners or neglecting opportunities to create divisions between these groups and Iran. Just as the Administration has used sanctions to curb Iranian influence in Iraq, it also has used U.S. foreign assistance as leverage to limit Iranian involvement in Iraqi governance. As Iraqis debated government formation in 2018, the Trump Administration signaled that decisions about future U.S. assistance efforts would be shaped by the outcome of Iraqi negotiations. Specifically, the Administration stated that the assumption of authority in the new government by Iraqis perceived to be close to or controlled by Iran would prompt the United States to reconsider U.S. support. In the end, Iraqis excluded figures with close ties to Iran from cabinet positions. U.S. officials have argued that the United States does not seek to sever Iraq's relationships with neighboring Iran, but striking a balance in competing with Iran-linked groups and respecting Iraq's independence may continue to pose challenges. Iraq's relations with the Arab Gulf states also may shape the balance of Iranian and U.S. interests. U.S. officials have praised Saudi efforts since 2015 to reengage with the Iraqi government and support normalization of ties between the countries. In December 2015, Saudi officials reopened the kingdom's diplomatic offices in Iraq after a 25-year absence, and border crossings between the two countries have been reopened. Saudi Arabia and the other GCC states have not offered major new economic or security assistance or new debt relief initiatives to help stabilize Iraq, but actively engaged in and supported the February 2018 reconstruction conference held by Iraq in Kuwait. Saudi and other GCC state officials generally view the empowerment of Iran-linked Shia militia groups in Iraq with suspicion and, like the United States, seek to limit Iran's ability to influence political and security developments in Iraq. Negotiations among Iraqi factions following the May 2018 election have not fully resolved all questions about Iraq's future approach to U.S.-Iraqi relations. Former Prime Minister Abadi, with whom the U.S. government worked closely, could not translate his list's third-place finish into a mandate for a second term. His successor, Prime Minister Adel Abd al Mahdi, served in Abadi's government; U.S. officials have worked positively with him in the past. Nevertheless, the nature and durability of the political coalition arrangements supporting his leadership are unclear, and he lacks a strong personal electoral mandate. Similarly, Iraqi President Barham Salih is familiar to U.S. officials as a leading and friendly figure among Iraqi Kurds, but he serves at a time of significant political differences among Kurds, and amid strained relations between Kurds and the national government. Salih has supported continued U.S.-Iraqi cooperation but also has rebuked some statements by U.S. officials. While Baghdad-KRG ties have improved relative to their post-2017 referendum low point, it remains possible that the national government could more strictly assert its sovereign prerogatives with regard to foreign assistance to substate entities, and/or that KRG representatives could seek expanded aid or more direct foreign support. As negotiations over cabinet positions conclude in Baghdad, Iraq's government is expected to debate the implementation of the national budget, reform of the water and electricity sectors, employment and anticorruption initiatives, and various national security issues. Among the latter may be proposals from some factions calling for the reduction or expulsion of U.S. and other foreign military forces from Iraq. Some Iraqi groups remain vocally critical of the remaining U.S. and coalition military presence in the country and argue that the defeat of the Islamic State's main forces means that U.S. and other foreign forces should depart. These groups also accuse the United States of seeking to undermine the Popular Mobilization Forces or to otherwise subordinate Iraq to U.S. preferences. Most mainstream Iraqi political movements or leaders did not use the U.S. military presence as a major wedge issue in the run-up to or aftermath of the May 2018 election, and U.S. officials express confidence that many Iraqi military leaders and key political figures do not want to end Iraq's security partnership with the United States. Nevertheless, Members of Congress and U.S. officials face difficulties in developing policy options that can secure U.S. interests on specific issues without provoking major opposition from Iraqi constituencies. At the same time, Iraqi leaders may wonder whether the 2019 U.S. drawdown from Syria might augur a similar U.S. drawdown in Iraq. If Iraqi leaders seek to develop alternative sources of support should the United States decide to leave Iraq, then such sources could include Iran. Debates over U.S. military support to Iraqi national forces and substate actors in the fight against the Islamic State illustrated this dynamic, with some U.S. proposals for the provision of aid to all capable Iraqi forces facing criticism from Iraqi groups that may harbor suspicions of U.S. intentions or fear that U.S. assistance could empower their domestic rivals. To date, U.S. aid to the Kurds has been provided with the approval of the Baghdad government, though some Members of Congress have advocated for assistance to be provided directly to the KRG. U.S. concern about the unwillingness of some PMF units and armed groups to subordinate themselves to the national command authority of Iraq's elected government is another example. The strained relationship between national government and Kurdish forces along the disputed territories and the future of the Popular Mobilization Forces are issues that will doubtless recur in debates over the continuation of prevailing patterns of U.S. assistance. Oversight reporting to Congress suggests that DOD estimates the Iraq Security Forces are "years, if not decades" away from ending their "reliance on Coalition assistance," and DOD expects "a generation of Iraqi officers with continuous exposure to Coalition advisers" would be required to establish a self-reliant Iraqi fighting force. According to the Lead Inspector General for Overseas Contingency Operations (LIG-OCO), these conditions raise "questions about the duration of the OIR mission since the goal of that mission is defined as the 'enduring defeat' of ISIS." To achieve that goal, DOD may seek the continuation of U.S. and coalition training and advisory relationships with Iraq over a long, but as yet unspecified, period of time and on a consistent if as yet undefined scale. This may present questions to Congress about whether or how best to authorize and fund future U.S. security assistance to Iraq, and whether current bilateral agreements with the government of Iraq are sufficient and viable. The financial structure of U.S. security support efforts also could evolve. In the past, some in Congress have called for U.S. military training or other aid to Iraq to be provided on a reimbursement or loan basis, while with other major oil exporters like Saudi Arabia, long-term training activities have been funded by the recipient country through Foreign Military Sales. Iraq is already a significant FMS customer. It seems reasonable to expect that Iraqis will continue to assess and respond to U.S. initiatives (and those of other outsiders) primarily through the lenses of their own domestic political rivalries, anxieties, hopes, and agendas. Reconciling U.S. preferences and interests with Iraq's evolving politics and security conditions may thus require continued creativity, flexibility, and patience. H.R. 571 . A bill to impose sanctions with respect to Iranian persons that threaten the peace or stability of Iraq or the Government of Iraq. Subject to national security waiver, the bill would direct the President to impose sanctions on "any foreign person that the President determines knowingly commits a significant act of violence that has the direct purpose or effect of—(1) threatening the peace or stability of Iraq or the Government of Iraq; (2) undermining the democratic process in Iraq; or (3) undermining significantly efforts to promote economic reconstruction and political reform in Iraq or to provide humanitarian assistance to the Iraqi people." The bill would further require the Secretary of State to submit a determination as to whether Asa'ib Ahl al Haq, Harakat Hizballah al Nujaba, or affiliated persons and entities meet terrorist designation criteria or the sanctions criteria of the bill. The bill also would direct the Secretary of State to prepare, maintain, and publish a "a list of armed groups, militias, or proxy forces in Iraq receiving logistical, military, or financial assistance from Iran's Revolutionary Guard Corps or over which Iran's Revolutionary Guard Corps exerts any form of control or influence." The U.S. government designated Harakat Hizballah al Nujaba pursuant to Executive Order 13224 on terrorism in March 2019. A similar bill would direct the President to impose sanctions on select groups without a national security waiver ( H.R. 361 ). The bill reflects amendments reported to Congress by the House Foreign Affairs Committee and endorsed by the House during the 115 th Congress ( H.R. 4591 ). S.J.Res. 13 . A joint resolution to repeal the authorizations for use of military force against Iraq, and for other purposes. The joint resolution would repeal the Authorization for Use of Military Force against Iraq Resolution ( P.L. 102-1 ; 105 Stat. 3; 50 U.S.C. 1541 note) of January 14, 1991, and the Authorization for Use of Military Force against Iraq Resolution of 2002 ( P.L. 107-243 ; 116 Stat. 1498; 50 U.S.C. 1541 note) of October 16, 2002.
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Iraq's government declared military victory against the Islamic State organization (IS, also ISIS/ISIL) in December 2017, but insurgent attacks by remaining IS fighters continue to threaten Iraqis as they shift their attention toward recovery and the country's political future. Approximately 5,000 U.S. troops remain in Iraq at the invitation of the Iraqi government and provide advisory and training support to Iraqi security forces. However, some Iraqi political groups are calling for U.S. and other foreign troops to depart, and they may seek to force Iraqi government action on this question during 2019. Elections and Politics. Iraqis held national elections in May 2018, electing members to Iraq's unicameral legislature, the 329-seat Council of Representatives (COR). Political factions spent months negotiating in a bid to identify a majority bloc of legislators to form the next government, but the distribution of seats and alignment of actors precluded the emergence of a dominant coalition. Meanwhile, protests and violence in southern Iraq highlighted some citizens' outrage with poor service delivery, lack of economic opportunity, and corruption. In October, the COR chose former Kurdistan Regional Government (KRG) Prime Minister and former Iraqi Deputy Prime Minister Barham Salih as Iraq's President. Salih, in turn, named former Oil Minister Adel Abd al Mahdi as Prime Minister-designate and directed him to assemble a slate of cabinet officials for COR approval. Abd al Mahdi is a consensus figure acceptable to rival factions, but he does not lead a party or parliamentary group of his own. COR members have confirmed most of Abd al Mahdi's cabinet nominees, but key political groups are at an impasse over certain ministries, including the Ministry of Interior and the Ministry of Defense. Iraqi politicians have increasingly reached across sectarian political and economic lines in recent years in an attempt to appeal to disaffected citizens, but ethnic and religious politics remain relevant and Iraqi citizens remain frustrated with government performance. Iraq's neighbors and other outsiders, including the United States, are pursuing their respective interests in Iraq, and their competition creates additional challenges for Iraqi leaders. Paramilitary forces have grown stronger and more numerous in Iraq since 2014, and have yet to be fully integrated into national security institutions. Some figures associated with the volunteer Popular Mobilization Forces (PMF) that were organized to fight the Islamic State participated in the 2018 election and won COR seats, including critics of U.S. policy who have ties to Iran and are demanding the United States withdraw its military forces. The Kurdistan Region. The Kurdistan Region of northern Iraq (KRI) enjoys considerable administrative autonomy under the terms of Iraq's 2005 constitution, and the KRG held legislative elections on September 30, 2018. The KRG had held a controversial advisory referendum on independence in September 2017, amplifying political tensions with the national government, which then moved to reassert security control of disputed areas that had been secured by Kurdish forces after the Islamic State's mid-2014 advance. National government security forces and Kurdish peshmerga are deployed along contested lines of control, as leaders negotiate a host of sensitive issues. Stabilization and Reconstruction. Daunting resettlement, stabilization, and reconstruction needs face Iraqi citizens and leaders as they look to the future. More than 4 million Iraqis uprooted during the war with the Islamic State group have returned to their home communities, but many of the estimated 1.7 million Iraqis who remain internally displaced face significant political, economic, and security barriers to safe and voluntary return. Stabilization efforts in areas recaptured from the Islamic State are underway with United Nations and other international support, but many immediate post-IS stabilization priorities and projects are underfunded. Iraqi authorities have identified $88 billion in broader reconstruction needs to be met over the next decade. U.S. Policy and Issues for Congress. In general, U.S. engagement in Iraq since 2011 has sought to reinforce unifying trends and avoid divisive outcomes. The Trump Administration seeks to continue to train and support Iraqi security forces, while hoping to limit negative Iranian influence. The 116th Congress is considering Administration requests for funding to provide security assistance, humanitarian relief, and foreign aid in Iraq and may debate authorities for and provide oversight of the U.S. military presence in Iraq and security cooperation and aid programs. For background, see CRS Report R45025, Iraq: Background and U.S. Policy.
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Science and technology (S&T) play an important role in our society. Advances in science and technology can help drive economic growth and meet national priorities in public health, environmental protection, agricultural productivity, defense, and many other areas. Federal policies affect scientific and technological advancement on several levels. The federal government directly funds research and development (R&D) activities to achieve national goals or support national priorities, such as funding basic life science research through the National Institutes of Health (NIH) or developing new weapons systems in the Department of Defense (DOD). The federal government also establishes and maintains the legal and regulatory framework that affects S&T activities in the private sector. In addition, federal tax, trade, and education policies can have effects on private sector S&T activity. This report serves as a brief introduction to many of the science and technology policy issues that may come before the 116 th Congress. Each issue section provides background information and outlines selected policy issues that may be considered. Each issue includes a heading entitled "For Further Information" that provides the author's name and the titles of relevant CRS reports containing more detailed policy analysis and information. Cited reports are current as of their individual publication dates, but may not reflect developments that have occurred since their publication. Several issues of potential congressional interest apply to federal science and technology policy in general. This section begins with a brief introduction to the roles each branch of the federal government plays in S&T policymaking, then discusses overall federal funding of research and development. Additional sections address issues related to the emergence of disruptive technologies; the America COMPETES Act; oversight of federally supported academic research; technology transfer; the adequacy of the science and engineering workforce; science, technology, engineering, and mathematics (STEM) education; and innovation-related tax policy. The federal S&T policymaking enterprise is composed of an extensive and diverse array of stakeholders in the executive, legislative, and judicial branches. The enterprise fosters, among other things, the advancement of scientific and technical knowledge; STEM education; the application of S&T to achieve economic, national security, and other societal benefits; and the use of S&T to improve federal decisionmaking. Federal responsibilities for S&T policymaking are highly decentralized. In addition to appropriating funding for S&T programs, Congress enacts laws to establish, refine, and eliminate programs, policies, regulations, regulatory agencies, and regulatory processes that rely on S&T data and analysis. However, congressional authorities related to S&T policymaking are diffuse. Many House and Senate committees have jurisdiction over important elements of S&T policy. In addition, there are dozens of informal congressional caucuses in areas of S&T policy such as research and development, specific S&T disciplines, and STEM education. The President formulates annual budgets, policies, and programs for consideration by Congress; issues executive orders and directives; and directs the executive branch departments and agencies responsible for implementing S&T policies and programs. The Office of Science and Technology Policy, in the Executive Office of the President, advises the President and other Administration officials on S&T issues. Executive agency responsibilities for S&T policymaking are also diffuse. Some agencies have broad S&T responsibilities (e.g., the National Science Foundation). Others use S&T to meet a specific federal mission (e.g., defense, energy, health, space). Regulatory agencies have S&T responsibilities in areas such as nuclear energy, food and drug safety, and environmental protection. Federal court cases and decisions often affect U.S. S&T policy. Decisions can have an impact on the development of S&T (e.g., decisions regarding the U.S. patent system); S&T-intensive industries (e.g., the break-up of AT&T in the 1980s); and the admissibility of S&T-related evidence (e.g., DNA samples). For Further Information John F. Sargent Jr., Specialist in Science and Technology Policy CRS Report R43935, Office of Science and Technology Policy (OSTP): History and Overview , by John F. Sargent Jr. and Dana A. Shea The federal government has long supported the advancement of scientific knowledge and technological development through investments in R&D. Federal R&D funding seeks to address a broad range of national interests, including national defense, health, safety, the environment, and energy security; advance knowledge generally; develop the scientific and engineering workforce; and strengthen U.S. innovation and competitiveness. The federal government has played an important role in supporting R&D efforts which have led to scientific breakthroughs and new technologies, from jet aircraft and the internet to communications satellites and defenses against disease. Between FY2008 and FY2013, federal R&D funding fell from $140.1 billion to $130.9 billion, a reduction of $9.3 billion (6.6% in current dollars, 13.4% in constant dollars). The decline was a reversal of sustained growth in federal R&D funding for more than half a century, and stirred debate about the potential long-term effects on U.S. technological leadership, innovation, competitiveness, economic growth, and job creation. From FY2013 to FY2017, federal funding grew, rising to an all-time current dollar high of $155.0 billion in FY2017, the most recent annual aggregate number available. However, in constant dollars, the FY2017 level was $9.6 billion (5.6%) below its high of $169.7 billion in 2010. Concerns by some about reductions in federal R&D funding have been exacerbated by increases in the R&D investments of other nations (China, in particular); globalization of R&D and manufacturing activities; and trade deficits in advanced technology products, an area in which the United States previously ran trade surpluses (most recently in 2001). At the same time, some Members of Congress express concerns about the level of federal funding in light of the current federal fiscal condition. In addition, R&D funding decisions may be affected by differing perspectives on the appropriate role of the federal government in advancing science and technology. As the 116 th Congress undertakes the appropriations process it faces two overarching issues: (1) the direction in which the federal R&D investment will move in the context of increased pressure to limit discretionary spending and (2) how available funding will be prioritized and allocated. Low or negative growth in the federal government's overall R&D investment may require movement of resources across disciplines, programs, or agencies to address priorities. Congress continues to play a central role in defining the nation's R&D priorities as it makes decisions with respect to the size and distribution of aggregate, agency, and programmatic R&D funding. For Further Information John F. Sargent Jr., Specialist in Science and Technology Policy CRS Report R45150, Federal Research and Development (R&D) Funding: FY2019 , coordinated by John F. Sargent Jr. CRS Report R44888, Federal Research and Development Funding: FY2018 , coordinated by John F. Sargent Jr. The rapid pace of technology innovation and application is substantially affecting both the global economy and human behavior. A disruptive technology can be thought of as a rapidly evolving set of innovations in any technology space that has potentially broad economic and social impacts. Two or more different technologies may be integrated to create a new, convergent technology that may also be disruptive. Consider the smartphone, perhaps the best-known example of a technology that is both disruptive and convergent. It combines a telephone, a computer, a camera, and a geolocation application into a single device. It has become so popular over the last decade that, according to some estimates, more than half of the world's population uses one. Those users average more than four hours daily on the device, predominantly for activities other than voice phone calls. The emergence of such technologies has the potential to create large-scale economic and social disruptions. Smartphones and other forms of mobile computing, for example, have had large economic effects on the telecommunications sector, as well as large social impacts. Among other technologies associated with major disruptions are social media, cloud computing, and data analytics ("big data"). Additional examples include artificial intelligence (AI), autonomous vehicles, blockchain, energy storage, gene editing, and the internet of things. The economic and social impacts of such technologies are difficult to predict and present complex facets to Congress as it responds to the opportunities and challenges those technologies pose. Not only are the paths of their development and implementation uncertain, but systematic data collection on them is sparse. The complexity and pace of advancement of such technologies create policy issues and challenges of potential interest to the 116 th Congress. Questions disruptive technologies may raise include the following: If Congress seeks to facilitate the growth of such technologies, what options might it consider? For example, how might Congress decide which technologies to prioritize for investment? How would congressional support for research and development affect growth? What kinds of incentives might Congress consider providing? What issues do such technologies raise for international economic competition, and what are the options for congressional response? For example, if other countries are investing heavily in some potentially disruptive technologies, how might Congress balance the benefits and disadvantages to the nation of investing in the same technologies or different ones? What are the potential negative impacts of such technologies on societal goals and values, and what steps might Congress consider for prevention and mitigation? For example, how might Congress respond to public concerns about privacy and security? How might such technologies affect the U.S. workforce and economic opportunity, and what are the potential responses? For Further Information Eric A. Fischer, Senior Specialist in Science and Technology The America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science (COMPETES) Act ( P.L. 110-69 ) was enacted in 2007. The act, a response to concerns about U.S. competitiveness, authorized certain federal research, education, and innovation-related activities. In 2010, Congress passed the America COMPETES Reauthorization Act of 2010 ( P.L. 111-358 ), extending and modifying certain provisions of the 2007 law, as well as establishing new provisions. Congressional appropriations have generally been below authorized levels, and the specific authorizations of appropriations in the 2010 act have expired. Following previous reauthorization efforts that inspired debate about such topics as the scientific peer review process, certain provisions of these acts were reauthorized and modified as part of the American Innovation and Competitiveness Act (AICA, P.L. 114-329 ), enacted at the end of the 114 th Congress. The 116 th Congress may consider additional provisions from the COMPETES acts that were not addressed through the AICA, such as expired authorizations of appropriations for the National Science Foundation (NSF) and the National Institute of Standards and Technology (NIST). The COMPETES acts were originally enacted to address concerns that the United States could lose its advantage in scientific and technological innovation. Economists have asserted that economic, security, and social benefits accrue preferentially to nations that lead in scientific and technological advancement and commercialization. Some analysts have suggested that historical U.S. leadership in these areas is slipping. In particular, some stakeholders have questioned the adequacy of federal funding for physical sciences and engineering research and the domestic production of scientists and engineers. The COMPETES acts were designed to respond, in part, to these challenges by authorizing increased funding for the NIST, NSF, and Department of Energy's Office of Science. Together, the acts also authorized certain federal STEM education activities, the Advanced Research Projects Agency-Energy (ARPA-E), and prize competitions at federal agencies, among other provisions. Those who have expressed opposition to aspects of the COMPETES acts have done so from several perspectives. Some critics question the existence of a STEM labor shortage and thus the need for programs aimed at increasing the number of STEM workers. Other critics agree with the assertion of a shortage, but question whether the federal government should address it, believing that the market will make the necessary corrections to meet the demand. With respect to U.S. competitiveness, some analysts prefer alternative approaches to those proposed in the COMPETES acts, such as research tax credits or reducing regulatory costs. Other analysts object to the financial cost associated with the COMPETES acts, given concern about the federal budget deficit and debt. For Further Information Laurie A. Harris, Analyst in Science and Technology Policy John F. Sargent Jr., Specialist in Science and Technology Policy CRS Insight IN11001, Revisiting the Doubling Effort: Trends in Federal Funding for Basic Research in the Physical Sciences and Engineering , by John F. Sargent Jr. CRS Report R44345, Efforts to Reauthorize the America COMPETES Act: In Brief , by John F. Sargent Jr. Every year, approximately one-third of the federal government's research and development spending is obligated to federal laboratories, including federally funded research and development centers, in support of agency mission requirements. The technology and expertise generated by federal laboratories may have applications beyond the immediate goals or intent of the original R&D. Over the years, Congress has established various mechanisms—primarily through the Stevenson-Wydler Technology Innovation Act of 1980 ( P.L. 96-480 ) and subsequent legislation—to facilitate the transfer of technology and research generated from federal laboratories to the private sector where it can be further developed and commercialized. Congressional interest in promoting the transfer of technology from federal laboratories is largely based on meeting social needs and promoting economic growth to enhance the nation's welfare and security. Technology transfer from federal laboratories can occur in many forms. In some instances, it can occur through formal partnerships and joint research activities between federal laboratories and private firms, including through cooperative research and development agreements or CRADAs. In other cases, it can occur when the legal rights to government-owned patents are licensed to a private firm. Despite previous efforts to increase the effectiveness of technology transfer from federal laboratories to the private sector, the transfer of federal technologies remains restrained. Critics of current mechanisms argue that working with federal laboratories continues to be difficult and time-consuming. Proponents assert that federal laboratories are open and receptive to partnering with private firms, but it remains up to them to take advantage of federal laboratory technologies and capabilities. At issue is whether additional legislative initiatives and federal incentives are needed to encourage increased technology transfer from federal laboratories, or if the available resources are sufficient. In December 2018, the National Institute of Standards and Technology released "Return on Investment Initiative for Unleashing American Innovation," a draft paper proposing various strategies and actions to accelerate and improve the transfer of technology to the private sector, including building a more entrepreneurial R&D workforce and increasing engagement with private sector technology development experts and investors. Several of the proposed actions may require congressional approval and additional legislative authority to implement. Further Information Marcy E. Gallo, Analyst in Science and Technology Policy CRS Report R44629, Federally Funded Research and Development Centers (FFRDCs): Background and Issues for Congress , by Marcy E. Gallo The adequacy of the U.S. science and engineering (S&E) workforce has been an ongoing concern of Congress for more than 60 years. Scientists and engineers are widely believed to be essential to U.S. technological leadership, innovation, manufacturing, and services, and thus vital to U.S. economic strength, national defense, and other societal needs. Congress has enacted many programs to support the education and development of scientists and engineers. Congress has also undertaken broad efforts to improve science, technology, engineering, and math skills to prepare a greater number of students to pursue S&E degrees. In addition, some policymakers have sought to increase the number of foreign scientists and engineers working in the United States through changes in visa and immigration policies. Most experts agree that there is no authoritative definition of which occupations comprise the S&E workforce. Rather, the selection of occupations included in any particular analysis of the S&E workforce may vary depending on the objective of the analysis. The policy debate about the adequacy of the U.S. S&E workforce has focused largely on professional-level computer occupations, mathematical occupations, engineers, and physical scientists. Accordingly, much of the analytical focus has been on these occupations. However, some analyses may use a definition that includes some or all of these occupations, as well as life scientists, S&E managers, S&E technicians, social scientists, and related occupations. Many policymakers, business leaders, academicians, S&E professional society analysts, economists, and others hold differing views with respect to the adequacy of the S&E workforce and related policy issues. These issues include the question of the existence of a shortage of scientists and engineers in the United States, what the nature of any such shortage might be (e.g., too few people with S&E degrees, mismatches between skills and needs), and whether the federal government should undertake policy interventions or rely upon market forces to resolve any shortages in this labor market. Among the key indicators used by labor economists to assess the existence of occupational labor shortages are employment growth, wage growth, and unemployment rates. For Further Information John F. Sargent Jr., Specialist in Science and Technology Policy CRS Report R43061, The U.S. Science and Engineering Workforce: Recent, Current, and Projected Employment, Wages, and Unemployment , by John F. Sargent Jr. The term "STEM education" refers to teaching and learning in the fields of science, technology, engineering, and mathematics. Policymakers have had an enduring interest in STEM education. Popular opinion generally holds that U.S. students perform poorly in STEM subjects—especially when compared to students in certain foreign education systems—but the data paint a complicated picture. Over time, U.S. students appear to have made gains in some areas but may be perceived as falling behind in others. Various attempts to assess the federal STEM education effort have produced different estimates of its scope and scale. These efforts have identified between 105 and 254 STEM education programs and activities across 13 to 15 federal agencies. Annual federal appropriations for STEM education are typically estimated to be in the range of $2.8 billion to $3.4 billion. The national conversation about STEM education frequently develops from concerns about the U.S. science and engineering workforce. As discussed in the previous section, some observers assert that the United States faces a shortage of STEM workers; others dispute this claim. Many proponents argue that a general increase in STEM abilities among the U.S. workforce could benefit the nation in any case. On the other hand, some scholars oppose the use of education policy to increase the supply of STEM workers, either because they perceive such policies as overemphasizing the economic outcomes of education at the expense of other values (e.g., personal development or citizenship) or because they perceive the labor market as the more efficient mechanism for dealing with these issues. Opinions differ as well on the appropriate scope, scale, and emphasis of federal STEM education policy. Some observers prefer policies aimed at lifting the STEM achievement of all students—such as teacher or faculty professional development; or changes in curriculum, standards, or pedagogy. Others emphasize policies designed to meet specific needs—such as scholarships for the "best and brightest," federal workforce training in areas of high demand (e.g., information technology and cybersecurity), efforts to close academic achievement gaps between various demographic groups, or programs to increase the participation of traditionally underrepresented groups in STEM fields. For Further I nformation Boris Granovskiy, Analyst in Education Policy CRS Report R45223, Science, Technology, Engineering, and Mathematics (STEM) Education: An Overview , by Boris Granovskiy CRS In Focus IF10654, Challenges in Cybersecurity Education and Workforce Development , by Boris Granovskiy The 116 th Congress may consider new federal policies to promote technological innovation, which involves the creation, development, and use of new technologies. Among the concerns fueling such an interest is what many view as inadequate growth in domestic high-paying jobs in a range of industries in recent years. Among the pathways to accelerating growth in these jobs are (1) faster rates of entrepreneurial business formation, (2) increased business investment in domestic research and development (R&D), (3) greater domestic production of products and services derived from that research, and (4) increased employer spending on training workers to acquire the skills needed to earn higher-paying jobs. The technical skills required to perform such jobs can be thought of as a critical component of the domestic climate for investment in innovation. Congress can directly influence the rate of high-wage job creation through adopting tax incentives for investment in R&D, worker training, and higher education. Under current federal tax law, three provisions directly affect entrepreneurial business formation and business investment in R&D: (1) an expensing allowance for research expenditures under Section 174 of the tax code (which is scheduled to switch to a five-year amortization period for that spending starting in 2022), (2) a nonrefundable tax credit for increases in research expenditures above a base amount under Section 41, and (3) a full exclusion for capital gains from the sale or exchange of qualified small business stock held by the original investor for five or more years under Section 1202. There is no federal tax incentive under current law for employer investment in worker training. The 2017 tax revision ( P.L. 115-97 ) substantially cut income tax rates for corporate and noncorporate business income, beginning in 2018. The new law also modified or repealed a number of tax provisions affecting business after-tax profits. Some argue that the tax cuts alone should be sufficient to increase the number of high-paying domestic jobs in a range of industries. Others are skeptical that many large U.S. employers will invest the windfall gains from the tax cuts in expanding domestic production and boosting worker wages, training, and education. In their view, many such companies (including U.S. multinational corporations) are more likely to use much of their tax savings to buy back stock, raise dividends, or acquire competing firms. One previously proposed option for increasing the number of high-paying domestic jobs that the 116 th Congress may examine is the creation of a tax incentive known as a patent or innovation box. Such an incentive lowers the tax burden on income earned from the commercial use of qualified intellectual property, such as trademarks or patents. Depending on its design, a patent box could give U.S. and foreign companies investing in innovation a stronger incentive to expand their investment in U.S. R&D and production activities. Potential drawbacks to such a subsidy include its budgetary cost and the lack of a sound economic justification for a tax subsidy that benefits only companies that develop or purchase successful patented innovations, not companies that develop profitable new technologies that never are patented. A second option for spurring faster growth in domestic high-paying jobs is a tax incentive for employers to invest in worker training and education. Several bills were introduced in the 115 th Congress to promote employer investment in training programs such as apprenticeships and collaboration with community colleges to design courses of study targeted at the skill needs of employers. The U.S. economy benefits from an expansion in high-paying jobs only if there are enough workers to fill them. Potential drawbacks to such a tax subsidy include the likelihood it would reward employers for doing what they would do without a tax subsidy and a lack of evidence that employers systematically underinvest in worker training and education. For Further Information Gary Guenther, Analyst in Public Finance CRS Report RL31181, Research Tax Credit: Current Law and Policy Issues for the 114th Congress , by Gary Guenther CRS Report R44829, Patent Boxes: A Primer , by Gary Guenther The federal government supports billions of dollars of agricultural research annually. The 116 th Congress is likely to face issues related to funding this research, a proposed relocation of the Department of Agriculture's science and economic analysis agencies, and issues arising from advances in agricultural biotechnology, including the development of cell-cultured meat. The U.S. Department of Agriculture's (USDA's) Research, Education, and Economics (REE) mission area has the primary federal responsibility of advancing scientific knowledge for agriculture. USDA-funded research spans the biological, physical, and social sciences related broadly to agriculture, food, and natural resources. USDA conducts its own research and administers federal funding to states and local partners primarily through formula funds and competitive grants. The outcomes are delivered through academic and applied research findings, statistical publications, cooperative extension, and higher education. USDA's research program is funded with nearly $2.9 billion per year of discretionary funding and about $120 million of mandatory funding. The most recent farm bill (P.L. 115-661, Agriculture Improvement Act of 2018), enacted in December 2018, governs agricultural research programs through FY2023. In keeping with past farm bills, this farm bill reauthorizes a wide range of existing research and education provisions (e.g., funding of land grant university research) and also authorizes several new research provisions. One provision that is likely to be closely watched is the Agriculture Advanced Research and Development Authority (AGARDA) pilot program. Modeled on the Defense Advanced Research Projects Agency, AGARDA will operate under the Office of Chief Scientist to address long-term and high-risk research challenges in the agriculture and food sectors. For Further Information Tadlock Cowan, Analyst in Natural Resources and Rural Development CRS Report R40819, Agricultural Research: Background and Issues , by Jim Monke CRS Report R45197, The House Agriculture Committee's 2018 Farm Bill (H.R. 2): A Side-by-Side Comparison with Current Law , coordinated by Mark A. McMinimy CRS In Focus IF10187, Farm Bill Primer: What Is the Farm Bill? , by Renée Johnson and Jim Monke In August 2018, the Secretary of Agriculture announced a reorganization of the department that included relocating the National Institute of Food and Agriculture (NIFA) and Economic Research Service (ERS) outside the National Capital Region. The Secretary has stated that he would like to complete the relocation in 2019. As two of the department's science and agricultural economic analysis agencies, such a move has prompted significant commentary within Congress and by other Washington-based scientific organizations. While nearly 135 cities have announced their interest in hosting the relocated agencies, an ongoing USDA Inspector General (IG) study is examining the department's legal and budgetary authority to execute the moves. As this IG study is completed, Congress may choose to exercise its authority to ensure that the proposed move is in accordance with federal laws and regulations. For Further Information Tadlock Cowan, Analyst in Natural Resources and Rural Development The 116 th Congress may provide oversight of issues regarding bioengineered foods labeling, or foods containing bioengineered ingredients, proposed regulatory changes governing the introduction of genetically engineered (GE) plants and animals into the environment, and recent technical innovations in gene editing that could raise new regulatory issues for agricultural biotechnology. The 114 th Congress passed a bill signed into law in July 2016 ( P.L. 114-216 ) to establish a "national bioengineered food disclosure standard." The final rule was published in late December 2018. Food manufacturers can adopt either text, a symbol, or an electronic/digital link for identifying bioengineered foods. The disclosure act is to cover foods made through conventional genetic engineering technology, and as well as newer techniques in the definition of bioengineered foods. P.L. 114-216 also required USDA to conduct a study that identifies potential technological factors that could affect consumer access to bioengineered food disclosure through electronic or digital methods such as codes on food products read by smart phones. Observers are concerned that such digital methods of disclosure could have differential impacts on those without cell phones (e.g., the elderly, low-income families) and those without access to high-speed broadband. The congressionally required study, completed in July 2017, specifically addresses the availability of wireless or cellular networks, availability of landline telephones in stores, and particular factors that might affect small retailers and rural retailers as well as consumers. With the final rule now published, the disclosure law is to be implemented by USDA's Agricultural Marketing Service. The 116 th Congress may begin to address various public issues that arise from implementing the new disclosure rule. The development over the past several years of new technologies to genetically engineer plants, in particular through novel gene-editing technologies such as CRISPR-Cas9, has raised new regulatory issues. USDA currently regulates GE plants under the Plant Protection Act (PPA; 7 U.S.C. §770). However, USDA has stated that newer technologies may fall outside the purview of the PPA, and thus the department might have no regulatory jurisdiction over plants genetically engineered using these new technologies. For example, USDA's Animal and Plant Health Inspection Service (APHIS) asserted in April 2016 that the agency had no regulatory authority under the PPA and, by default, approved a mushroom variety and a waxy corn variety created through the CRISPR-Cas9 gene editing technology. The Department of Agriculture then announced in March 2018 that they had no plans to regulate plants that could otherwise have been developed through traditional breeding techniques, which characterizes some gene editing techniques. This decision raises important questions about how such genetically engineered plants are to be regulated as they are introduced. As genetically engineered plant varieties created by these newer techniques become more common, and as the public becomes more aware that these varieties are not regulated under the PPA, Congress could revisit the 1986 framework that governs U.S. biotechnology regulation. For Further Information Tadlock Cowan, Analyst in Natural Resources and Rural Development CRS In Focus IF10376, Labeling Genetically Engineered Foods: Current Legislation , by Tadlock Cowan CRS Report R43518, Genetically Engineered Salmon , by Harold F. Upton and Tadlock Cowan CRS Report RL32809, Agricultural Biotechnology: Background, Regulation, and Policy Issues , by Tadlock Cowan CRS Report RL33334, Biotechnology in Animal Agriculture: Status and Current Issues , by Tadlock Cowan CRS Report R43100, Unapproved Genetically Modified Wheat Discovered in Oregon and Montana: Status and Implications , by Tadlock Cowan Cell-cultured meat (also referred to as cell-based meat, lab-grown meat, and clean meat) is grown in laboratories from animal cell-cultures. First developed in the early 2000s, improved technological efficiencies and reduced production costs have allowed cell-cultured meat companies, including cell-cultures from cattle, hogs, poultry, and fish, to scale up and, in some instances, move closer to commercial viability. Some cell-cultured meat innovators believe their products could be sold within a few years in certain markets and become widely available in 10 years. A debate about which federal agency—the Department of Health and Human Services' (HHS) Food and Drug Administration (FDA) or the U.S. Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS)—has regulatory jurisdiction over cell-cultured meat surfaced in early 2018. Currently, FSIS regulates meat and poultry, catfish, and egg products. FDA regulates game-meat, fish and seafood, processed meat products (containing 2%-3% meat), and shell eggs. FDA and FSIS often share overlapping responsibilities for some food products and have developed "memoranda of understanding" (MOU) to facilitate communication and division of responsibilities between the two agencies. In February 2018, the U.S. Cattlemen's Association petitioned USDA to have FSIS establish meat labeling requirements that exclude cell-cultured products. The petition requested that only meat derived directly from animals raised and slaughtered be labeled "beef" and "meat." Congress took up cell-cultured meat in April 2018 when USDA Secretary Perdue testified before the House Committee on Appropriations, stating that meat grown in laboratories would be under the sole purview of USDA, and any product labeled as meat would be under USDA jurisdiction. In May 2018, the House-reported agricultural appropriations bill ( H.R. 5961 ) included a general provision that would have required USDA "for fiscal year 2018 and hereafter" to regulate cell-cultured products made from cells of amenable species of livestock and poultry, as defined in the Federal Meat Inspection Act and Poultry Products Inspection Act. In June 2018, FDA stated that under the Federal Food, Drug, and Cosmetic Act, FDA has jurisdiction over "food," which includes "articles used for food" and "articles used for components of any such article." Thus, according to FDA, both of the substances used in the manufacture of cell-cultured products, and the final products that will be used for food, are subject to the FDA's jurisdiction. Any substance that is intentionally added to food is considered a food additive and is subject to premarket review and approval by FDA. An exception to this requirement is when there is a consensus, among qualified experts that the substance is "generally recognized as safe" (GRAS) for its intended use. In November 2018, a joint statement from USDA and FDA announced that both agencies "should jointly oversee the production of cell-cultured food products derived from livestock and poultry." The statement further clarified that FDA would oversee cell collection, cell banks, cell growth, and the process of differentiation. USDA is to oversee the production and labeling of food products derived from the cells. This statement initiates the process of developing the regulatory framework for cell-culture meat and poultry; however, other key aspects of the regulations have yet to be announced. For example, fish, for which cell-cultured technology is being developed, is regulated by FDA, but was not mentioned in the statement. In addition, there are still questions on how to obtain premarket approval and how inspection of cell-cultured meat facilities will be conducted. Finally, the statement did not resolve the contentious issue of cell-cultured meat labeling terminology. Cell-cultured meat regulation decisions may be further clarified in the near future—perhaps through a MOU between FDA and USDA. For Further Information Sahar Angadjivand, Analyst in Agricultural Policy Joel L. Greene, Analyst in Agricultural Policy CRS In Focus IF10947, Regulation of Cell-Cultured Meat , by Joel L. Greene and Sahar Angadjivand Advances in science and technology related to biomedical research and development underpin improvements in medications and treatments. Some of the biomedical R&D issues that the 116 th Congress may face include those related to the budget and oversight of the National Institutes of Health, the role the Food and Drug Administration in approving new medicines and laboratory tests, and issues related to stem cell-based medicine and genomic editing. The National Institutes of Health is the lead federal agency conducting and supporting biomedical research. Congress provided the agency with $39 billion in funding for FY2019 for basic, clinical, and translational research in NIH's laboratories as well as in research institutions nationwide. The extramural research program (more than 80% of the NIH budget) provides grants, contracts, and training awards to support over 30,000 individuals at more than 2,500 universities, academic health centers, and research facilities across the nation. NIH represents about one fifth of total federal research and development spending, and half of non-Department of Defense research and development funding. NIH is a large and complex organization made up of 27 institutes and centers (ICs). Each IC sets its own research priorities and manages its research programs in coordination with the Office of the Director (OD). The individual ICs may focus on particular diseases (e.g., The National Cancer Institute), areas of human health and development (e.g., The National Institute on Aging), scientific fields (e.g., National Institute for Environmental Health Sciences), or biomedical professions and technology (e.g., National Institute of Biomedical Imaging and Bioengineering). Congress provides separate appropriations to 24 of the 27 ICs, to OD, and to a buildings and facilities account. The 21 st Century Cures Act ( P.L. 114-255 ) authorized four major Innovation Projects at NIH, some conducted in partnership with other federal agencies such as the Food and Drug Administration (FDA) or Department of Defense (DOD) the Precision Medicine Initiative (PMI; $1.5 billion for FY2017 through FY2026), the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative ($1.5 billion for FY2017 through FY2026), cancer research ($1.8 billion for FY2017 through FY2023), and regenerative medicine ($30 million for FY2017 through FY2020). The 116 th Congress may continue previous congressional interest and oversight of the implementation and progress of the Innovation Projects authorized by the 21 st Century Cures Act. For Further Information Kavya Sekar, Analyst in Health Policy Judith A. Johnson, Specialist in Biomedical Policy CRS Report R41705, The National Institutes of Health (NIH): Background and Congressional Issues , by Judith A. Johnson CRS Report R43341, NIH Funding: FY1994-FY2019 , by Judith A. Johnson and Kavya Sekar CRS Report R44720, The 21st Century Cures Act (Division A of P.L. 114-255) , coordinated by Amanda K. Sarata CRS Report R44916, Public Health Service Agencies: Overview and Funding (FY2016-FY2018) , coordinated by C. Stephen Redhead and Agata Dabrowska The Food and Drug Administration (FDA) regulates the safety of foods, cosmetics, and radiation-emitting products; the safety and effectiveness of drugs, biologics, and medical devices; as well as public health aspects of tobacco products. To keep pace with changes in science and emerging safety and security issues, FDA's regulations have been subject to various modifications through legislation and administrative action. The 21 st Century Cures Act ( P.L. 114-255 ), for example, modified FDA drug and device regulatory pathways to support innovation. Administratively, FDA has issued a series of gene therapy draft guidance documents, concomitant with NIH stepping down oversight of gene therapy human clinical trials. Innovation in this area includes gene editing-based products (e.g., CRISPR) as well as cell-based gene therapies (e.g., CAR-T therapies). Pursuant to the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act ( P.L. 115-271 ), FDA must meet with stakeholders and issue guidance to address the challenges of developing nonaddictive medical products for treatment of pain or addiction through regulatory mechanisms established in the 21 st Century Cures Act (e.g., application of novel clinical trial designs). Additionally, the agency launched an Innovation Challenge to incentivize the development of medical devices to detect, treat and prevent addiction and pain. Medical devices are increasingly connected to the internet, hospital networks, and other medical devices, which can increase the risk of cybersecurity threats. Currently, FDA does not have explicit statutory authority pertaining to medical device cybersecurity. However, manufacturers are required to comply with Quality Systems Regulations (QSRs), which are good manufacturing practices for medical devices. QSRs may address, among other things, risk analysis, including cybersecurity risk. In October 2018, FDA entered into a Memorandum of Agreement with the Department of Homeland Security, to implement a framework for greater coordination and information sharing between the two agencies about medical device cybersecurity threats and vulnerabilities. For Further Information Agata Dabrowska, Analyst in Health Policy Victoria Green, Analyst in Health Policy Amanda Sarata, Specialist in Health Policy CRS Report R44576, The Food and Drug Administration (FDA) Budget: Fact Sheet , by Agata Dabrowska and Victoria R. Green CRS Report R44720, The 21st Century Cures Act (Division A of P.L. 114-255) , coordinated by Amanda K. Sarata CRS Report R45405, The SUPPORT for Patients and Communities Act (P.L. 115-271): Food and Drug Administration and Controlled Substance Provisions , coordinated by Agata Dabrowska CRS Report R44824, Advanced Gene Editing: CRISPR-Cas9 , by Marcy E. Gallo et al. In vitro diagnostics (IVD) are devices that provide information used by clinicians and patients to make health care decisions. IVDs are used in laboratory analysis of human samples and include commercial test products and instruments used in testing, among other things. Laboratory-developed tests (LDTs) are a class of IVD that is manufactured and offered within a single laboratory. Genetic tests are a type of diagnostic test that analyzes various aspects of an individual's genetic material (DNA, RNA, chromosomes, and genes). Most genetic tests are LDTs. The regulation of LDTs has been the subject of debate over the past 15 years. The FDA has exercised enforcement discretion over LDT regulation, meaning that most LDTs and genetic tests have not undergone FDA premarket review nor received FDA clearance or approval for marketing. Given the growing use and complexity of LDTs and genetic tests, the FDA has revisited how LDTs should be regulated. In October 2014, FDA published draft guidance on the regulation of LDTs in the Federal Register . The agency summarized the public comments it received on the guidance documents in its January 2017 discussion paper on LDTs. This discussion draft included an outline of a possible approach to LDT oversight. The agency also noted in this discussion paper that it would not issue final guidance to allow for further discussion and to "give our congressional authorizing committees the opportunity to develop a legislative solution." Recently, various legislative approaches have been under discussion. A discussion draft bill circulated in early 2017, the "Diagnostic Accuracy and Innovation Act (DAIA)," was crafted with industry and other stakeholder input. It outlined a regulatory approach for IVD tests that was risk-based and flexible. FDA responded to this draft in August 2018 with a novel regulatory approach for these tests, including a mechanism for pre-certifying certain related tests to streamline premarket requirements, among other things. In December 2018, a new draft bill based on DAIA and incorporating FDA's feedback was released entitled the "Verifying Accurate, Leading-edge, IVCT Development (VALID) Act." For Further Information Amanda Sarata, Specialist in Health Policy Judith Johnson, Specialist in Biomedical Policy CRS Report R43438, Regulation of Clinical Tests: In Vitro Diagnostic (IVD) Devices, Laboratory Developed Tests (LDTs), and Genetic Tests , by Amanda K. Sarata and Judith A. Johnson CRS Report RL33832, Genetic Testing: Background and Policy Issues , by Amanda K. Sarata Stem cells have the unique ability to become many types of cells in the body. Scientists are exploring ways of using stem cells to create regenerative medicine therapies that repair damaged or diseased organs and restore them to normal functioning. Stem cells may either be pluripotent or multipotent. Pluripotent stem cells include embryonic stem cells or reprogrammed adult cells that have the ability to become any of the more than 200 cell types in the adult body. Multipotent stem cells have the capacity to become multiple (but not all) types of cells, usually within a particular organ system such as the blood or nervous system. Most adult stem cells are multipotent stem cells. Recently, Congress has taken action to boost research and development of clinical applications for stem cells, both pluripotent and multipotent. For instance, the 21 st Century Cures Act ( P.L. 114-255 ) authorized to be appropriated $30 million for FY2017 through FY2020 for regenerative medicine research and a new designation at FDA for certain regenerative medicine therapies, eligible for expedited review. The term "regenerative medicine therapy" includes cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or product. Clinical trials are underway for stem cell therapies to treat eye diseases, amyotrophic lateral sclerosis (ALS), Parkinson's disease, traumatic brain injury, and others. However, some therapies have shown safety concerns, including potential cancer risks. There has also been a rise in the number of stem cell clinics offering unapproved and potentially unsafe treatments to consumers. In response, FDA has issued guidance on the regulation of therapies using human cells. FDA has also issued warning letters and taken enforcement actions against certain stem cell clinics offering unapproved treatments. Similarly, the Federal Trade Commission has filed complaints against marketing claims made by stem cell clinics. The 116 th Congress may consider actions to boost research and clinical development of stem cell therapies, while ensuring the safety of such treatments. Policymakers may also consider addressing the rising use of unapproved stem cell treatments. For Further Information Kavya Sekar, Analyst in Health Policy Agata Dabrowska, Analyst in Health Policy Judith A. Johnson, Specialist in Biomedical Policy Amanda Sarata, Specialist in Health Policy CRS Report R44720, The 21st Century Cures Act (Division A of P.L. 114-255) , coordinated by Amanda K. Sarata CRS Report RL33540, Stem Cell Research: Science, Federal Research Funding, and Regulatory Oversight , by Judith A. Johnson and Edward C. Liu Researchers have long been searching for a reliable and simple way to make targeted changes to the genetic material of humans, animals, plants, and microorganisms. Scientists have developed a gene editing tool known as CRISPR—clustered regularly interspaced short palindromic repeated DNA sequences—that offers the potential for substantial improvement over previous technologies. The characteristics of CRISPR—easier to use, more precise, and less costly—have led many in the scientific and business communities to assert that CRISPR could lead to significant advances across a broad range of areas—from medicine and public health to agriculture and the environment. Over the next 5 to 10 years, the National Academy of Sciences (NAS) projects a rapid increase in the number and type of biotechnology products, many enabled by CRISPR. CRISPR has increased both the pace of development and the variety of crops being genetically modified. Scientists are also beginning to use CRISPR in human clinical trials for a variety of cancers, among other conditions. While CRISPR offers a number of potential benefits it may also pose new risks and raise ethical concerns. For example, in 2018 a Chinese scientist claimed that he used CRISPR to modify human embryos creating twin girls who may be more resistant to HIV. These claims have not been published in the scientific literature and therefore have not been verified. The announcement, however, has renewed debate regarding the ethics of genetic engineering. It has also prompted discussion about how existing law and regulation in the United States apply to the conduct of this type of research, its clinical testing in humans, and specifically its potential applications in human embryos. Currently, federal funds cannot be used for research involving human embryos. Additionally, the FDA is prohibited from using federal funds to review clinical research involving the gene editing of human embryos. CRISPR-related approaches are also being considered by some researchers to reduce or eliminate mosquito populations that serve as the primary vector for the transmission of malaria—potentially saving lives and substantially reducing medical costs. A 2016 report from NAS indicates that existing mechanisms may be inadequate to assess the potential immediate and long-term environmental and public health consequences associated with this use of the technology. In the 116 th Congress, policymakers might examine the potential benefits and risks associated with the use of CRISPR gene editing, including the ethical and social implications of CRISPR-related biotechnology products. Congress might also consider whether and how to address CRISPR gene editing and future biotechnology products with respect to regulation, research and development, and economic competitiveness, including ways to harmonize CRISPR-related policies of the United States with those of other countries. For Further Information Marcy E. Gallo, Analyst in Science and Technology Policy John F. Sargent Jr., Specialist in Science and Technology Policy Amanda K. Sarata, Specialist in Health Policy Tadlock Cowan, Analyst in Natural Resources and Rural Development CRS Report R44824, Advanced Gene Editing: CRISPR-Cas9 , by Marcy E. Gallo et al. The 116 th Congress may consider whether and how the federal government might address climate change and issues related to water resources. Science and technology considerations permeate these deliberations and may be grouped into six interrelated topics: federal expenditures; climate change science; greenhouse gas (GHG)-related technology development and deployment; investment in infrastructure; anticipating, adapting to, and increasing resilience to the impacts of climate changes; and carbon sequestration technology. Additionally, Congress may face several issues related to ensuring reliable water quality and quantity. Federal funding and tax incentives for climate-related S&T reached almost $17 billion in FY2016, the last year reported to Congress by the Office of Management and Budget in response to annual appropriations directives. The funding was spread across 16 reporting agencies, though some related expenditures may not be included. Of the S&T total, approximately $6.7 billion, about 42%, were tax incentives for technology deployment. Another 45% funded "clean energy technology," the large majority at the Department of Energy for R&D and deployment programs. Approximately 15% funded climate change-related science, most of which supported satellites and computing infrastructure. Congress has not thus far reduced appropriations for most climate change-related S&T programs as proposed by the President's budgets for FY2018 and FY2019. The 116 th Congress will again consider appropriations for climate change-related programs and incentives. For Further Information Jane A. Leggett, Specialist in Energy and Environmental Policy CRS Report R43227, Federal Climate Change Funding from FY2008 to FY2014 , by Jane A. Leggett, Richard K. Lattanzio, and Emily Bruner CRS Report R45258, Energy and Water Development: FY2019 Appropriations , by Mark Holt and Corrie E. Clark CRS Report RS22858, Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, Energy Efficiency, and Electric Systems R&D , by Corrie E. Clark CRS In Focus IF10589, FY2019 Funding for CCS and Other DOE Fossil Energy R&D , by Peter Folger CRS In Focus IF10225, Coastal Flood Resilience: Policy, Roles, and Funds , by Nicole T. Carter, Harold F. Upton, and Francis X. McCarthy Congress may scrutinize several recent scientific assessments—domestic and international—that strengthened previous assessments: Human-related emissions of greenhouse gases (GHG) are accumulating in the atmosphere, intensifying the natural greenhouse gas effect, and increasing acidity of the oceans. The latest major U.S. assessment, the Climate Science Special Report (CSSR), released in October 2017 by the U.S. Global Change Research Program (USGCRP), concluded that the increase in GHG is driving global land and ocean warming and other climate changes that are now unprecedented in the history of modern civilization. It also stated, [B]ased on extensive evidence, that it is extremely likely [>95% likelihood] that human activities, especially emissions of greenhouse gases [GHG] , are the dominant cause of the observed warming since the mid-20 th century . For the warming over the last century, there is no convincing alternative explanation supported by the extent of the observational evidence. The USGCRP's November 2018 Fourth National Climate Assessment (NCA4) concluded, inter alia , that human-induced climate change is affecting U.S. communities across the country through extreme weather events and generally warmer temperatures, more variable precipitation, and other observed trends. The NCA4 anticipates continued and increasing disruption to infrastructure, economic, and social systems, including economic disparities. Such impacts would not be distributed evenly across the United States and globally. According to its assessment, projected climate change impacts are affecting, and are virtually certain to increasingly affect, the U.S. economy, trade, and other essential U.S. interests. Some stakeholders, including some Members of Congress, consider that the resulting impacts of climate change in the United States and abroad are and would be modest and manageable. The assessments above, and much of the observations and research on which they are founded, have resulted from decades of federal (and nonfederal) investment, amounting to tens of billions of dollars, in global change science. The USGCRP is an interagency mechanism, required by the Global Change Research Act of 1990 ( P.L. 101-606 ), that coordinates and integrates global change research across 13 government agencies. The 116 th Congress may seek to understand the scientific foundations for recent U.S. and international assessments, including the data and methods that increasingly support attribution of many observed changes and extreme weather events to human-related GHG emissions. Congress may also express priorities for further scientific research. In light of the state of climate science, Congress may consider the level of appropriations for its priorities and the distribution among federal climate-related science programs. For example, deliberations may concern the balance between observations and analysis, between science to increase knowledge and to support private and public decisionmaking, and between physical and social sciences, as well as public accessibility to federally supported information. For Further Information Jane A. Leggett, Specialist in Energy and Environmental Policy CRS Report R45086, Evolving Assessments of Human and Natural Contributions to Climate Change , by Jane A. Leggett A large majority of federal climate change-related expenditures is aimed at advancing "clean energy." Most human-related GHG emissions come from production, distribution, and combustion of fossil fuels, particularly for electricity generation and transportation, and are primarily emitted as carbon dioxide (CO 2 ) and methane (CH 4 ). Scientists agree that halting GHG-induced climate change would require eventually reducing net GHG emissions to near zero; the total amount of change would depend in large part on the cumulative emissions on that pathway. Many analysts see a decades-long path to stabilizing climate change as involving greater advance and deployment of efficiency improvements, decarbonization, and electrification of the world's economies, along with additional options in multiple sectors. Many options could potentially provide additional security and health benefits, while their costs may depend on public and private investments in research, development, demonstration, and deployment (RDD&D), as well as efforts to facilitate transitions in businesses, employment, and communities. Some see potential carbon capture, utilization, and sequestration (CCUS) technologies as key to preventing CO 2 emissions while preserving a large place for coal and other fossil fuels in the energy economy. Still others advocate for developing CO 2 removal or geoengineering technologies, along with international governance regimes, to intentionally and directly modify the climate, particularly should the climate change rapidly and adversely. The capacity to reduce GHG emissions to near zero at affordable costs, while maintaining U.S. economic growth and security, would depend on deployment of existing and demonstrated technologies supplemented by technological breakthroughs. Members may deliberate on the appropriate degree and means of federal support for advancing and deploying new technologies. Choices the 116 th Congress may address include: whether any policies should be neutral or favor selected technologies (or fuels); where federal intervention in the technology pipeline, through RDD&D, can be most cost efficient; whether policies are most effective when aimed at pushing the supply of selected technologies or incentivizing demand for low- or no-GHG technologies, or in combination; and how best to engage with the private sector and research institutions in partnerships on RDD&D. RDD&D funding has not been evenly distributed across technology types. Research has been intended to advance fossil fuel combustion, renewable energy (including biofuels), efficiency, storage, vehicles and their fuels, nuclear energy, and the electricity grid. Some incentives focus on "supply-push" of technologies (e.g., R&D funding), while others emphasize "demand-pull" (e.g., tax incentives for purchasers), with numerous examples suggesting that coordinated use of both could be most effective. Cleaner energy technologies can produce public health benefits in addition to climate benefits, while shifts in the energy economy can pose transitional challenges to workers and communities. The magnitude of federal expenditures for climate change technologies, the performance of federally supported programs, and priorities for policy tools and technologies may be topics for Congress, particularly in light of budget objectives. For Further Information Jane A. Leggett, Specialist in Energy and Environmental Policy CRS Report RS22858, Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, Energy Efficiency, and Electric Systems R&D , by Corrie E. Clark CRS Report R45204, Vehicle Fuel Economy and Greenhouse Gas Standards: Frequently Asked Questions , by Richard K. Lattanzio, Linda Tsang, and Bill Canis CRS Report R42566, Alternative Fuel and Advanced Vehicle Technology Incentives: A Summary of Federal Programs , by Lynn J. Cunningham et al. CRS Report R45010, Public-Private Partnerships (P3s) in Transportation , by William J. Mallett CRS In Focus IF10979, Greenhouse Gas Emissions and Sinks in U.S. Agriculture , by Renée Johnson Leaders in both chambers of Congress, as well as President Trump, are interested in federal investment in the nation's infrastructure. In evaluating options for infrastructure, two types of linkages with climate change may be important to consider simultaneously (along with numerous other factors) to optimize investments: infrastructure effects on long-term GHG emissions and potential effects of climate change on long-term infrastructure-related costs and public health and safety. For example, decisions regarding modernization of the electric grid may take account both of possible future policies to reduce GHG emissions and effects on electricity reliability in the context of more extreme weather events and an average increase in summer cooling demand. The first linkage between climate change and infrastructure investment arises from the foundation that infrastructure sets for certain technological choices, and consequently, levels of future U.S. GHG emissions (and the costs of reducing them). Long-lived infrastructure may exert influence on emissions for decades into the future; Infrastructure can "lock in" or support flexibility for certain technological options. Infrastructure choices could make adaption to new science, technological advances, and policy priorities more or less expensive. Infrastructure influence on GHG emissions is particularly strong for energy supply, transportation, industry, buildings, and communities. For example, pipeline infrastructure would be critical for deployment of CCUS technologies, particularly for industrial applications. In transportation, choices among transportation modes, and choices between energy types (e.g., gasoline or biofuels or electricity) would depend in part on the availability of the refueling or charging infrastructure. Similarly, land use decisions—generally made by local governments and maybe influenced by federal funding—affect transportation options, which can have long-term impacts on fossil fuel consumption. For example, land use development patterns designed for private automobiles are often not readily adaptable for installation of mass transit. A second linkage between climate change and infrastructure investment is the ability of infrastructure to avoid damages and offer resilience to climate changes, including extreme weather events that scientists expect to increase in frequency and strength. Because much infrastructure is intended to last for decades, projected climate changes in 2030 or 2050 that seem far off for current decisionmaking may have importance for future adequacy, safety, operating costs, and maintenance of investments. Some federal (including military) infrastructure has been severely damaged in recent extreme weather events, while nonfederal water, energy, transportation, urban, and other systems have been disrupted or experienced sustained damage. Congress may consider the merits of technical specifications or incentives to harden or increase the resiliency of long-lived infrastructure funded by the federal government, potentially providing model code or demonstrations to other decisionmakers. Policy choices could, on the one hand, increase near-term costs of building infrastructure; on the other hand, climate-related benefits could include avoiding future losses to life, damages to human health (including mental health), and higher federal outlays that could occur with projected climate change. For Further Information Jane A. Leggett, Specialist in Energy and Environmental Policy CRS Report R45156, The Smart Grid: Status and Outlook , by Richard J. Campbell CRS Report R45105, Potential Options for Electric Power Resiliency in the U.S. Virgin Islands , by Corrie E. Clark, Richard J. Campbell, and D. Andrew Austin CRS Report R44911, The Energy Savings and Industrial Competitiveness Act: S. 385 and H.R. 1443 , by Corrie E. Clark CRS Report R45350, Funding and Financing Highways and Public Transportation , by Robert S. Kirk and William J. Mallett CRS In Focus IF10702, Drought Response and Preparedness: Policy and Legislation , by Nicole T. Carter and Charles V. Stern CRS Report R40147, Infrastructure: Green Building Overview and Issues , by Eric A. Fischer and Danielle A. Arostegui CRS Report R43415, Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement , by Richard K. Lattanzio In light of recent scientific assessments and federal outlays for relief and recovery following extreme weather events, some of which have been statistically linked to GHG-induced climate change, Congress may review federal programs for S&T to support adaptation or resilience to projected climate change. Some issues related to infrastructure technology are discussed above, and there are additional science and technology issues associated with adaptation and resilience. For example, technological R&D needs may include new crop seed varieties suited to emerging climate conditions, better means to manage floodwaters, advanced air conditioning technologies for buildings, wildfire management techniques, and others. Further advances in climate forecasting, particularly at the local scale, could assist assessment of vulnerabilities and preparation for opportunities and risks. Improved understanding of human behavior could assist adaptation and resilience. Congress may address the federal role in supporting S&T that can facilitate effective state, local, and private decisionmaking on adaptation and resilience to climate change. Federal roles may include easing access to scientific research, climate and seasonal projections, impact assessments, and adaptation decision tools. One question would be the degree to which federal financial support encourages or discourages consideration of vulnerabilities and adaptation in private, state, and local decisionmaking, as regarding flood risk mitigation or agricultural risks. Congress may also review efforts already begun to incorporate climate change projections into federal agency management of federal personnel, infrastructure, and operations. Effective agency decisions would all depend on the adequacy and appropriate use of scientific information and available technologies. For Further Information Jane A. Leggett, Specialist in Energy and Environmental Policy CRS Report R43915, Climate Change Adaptation by Federal Agencies: An Analysis of Plans and Issues for Congress , coordinated by Jane A. Leggett CRS Report R45017, Flood Resilience and Risk Reduction: Federal Assistance and Programs , by Nicole T. Carter et al. CRS Report R43407, Drought in the United States: Causes and Current Understanding , by Peter Folger CRS Report R43199, Energy-Water Nexus: The Energy Sector's Water Use , by Nicole T. Carter CRS Report R44632, Sea-Level Rise and U.S. Coasts: Science and Policy Considerations , by Peter Folger and Nicole T. Carter CRS In Focus IF10728, After the Storm: Highway Reconstruction and Resilience , by Robert S. Kirk Carbon capture and sequestration (or storage)—known as CCS—involves capturing carbon dioxide (CO 2 ) at its source, storing it underground, or utilizing it for another purpose or product. (As noted earlier, CCS is sometimes referred to as CCUS—carbon capture, utilization , and storage.) CCS could reduce the amount of CO 2 emitted from the burning of fossil fuels at large stationary sources. Carbon utilization recently has gained interest within Congress as a means for capturing CO 2 and converting it into potentially commercially viable products, such as chemicals, fuels, cements, and plastics. Direct air capture (DAC) is also an emerging technology. DAC would remove atmospheric CO 2 directly from the atmosphere. CCS includes three main steps: (1) capturing CO 2 ; (2) transporting CO 2 ; and (3) injecting it into the subsurface. Following injection, the CO 2 would be monitored to verify that it remains underground. Capturing CO 2 is the most costly and energy-intensive step in the process (this is sometimes referred to as the energy penalty or the parasitic load ). Emerging technologies for carbon utilization and DAC have energized some CCS advocates. A challenge for utilization is whether the market for products and uses is large enough so that the amount of carbon captured or removed has a measurable effect mitigating climate change. The challenge for DAC is fairly straightforward—how to reduce the cost per ton of CO 2 removed. Since FY2010, Congress has provided more than $5 billion total in annual appropriations for CCS activities at DOE, primarily for research and development within DOE's Office of Fossil Energy (FE). Congress provided nearly $727 million to FE R&D in FY2018 and $740 million for FY2019. The Trump Administration's FY2019 budget request would have shifted away from CCS R&D to fund other priorities. Globally, two fossil-fueled power plants currently generate electricity and capture CO 2 in large quantities: the Boundary Dam plant in Canada and the Petra Nova plant in Texas. Both plants offset some of the capture costs by selling the captured CO 2 for purposes of enhanced oil recovery. The 115 th Congress enacted a tax provision (Title II, Section 41119 of P.L. 115-123 , which amended Internal Revenue Code, Section 45Q). The amendment increases the tax credit for CCS. Some stakeholders suggest that the changes to Section 45Q could be a "game changer" for CCS development in the United States. The 116 th Congress may explore how the 45Q tax credit is being implemented, and whether further legislative changes to the provision might be needed to accelerate deployment of CCS. For Further Information Peter Folger, Specialist in Energy and Natural Resources Policy CRS Report R44902, Carbon Capture and Sequestration (CCS) in the United States , by Peter Folger CRS Report R41325, Carbon Capture: A Technology Assessment , by Peter Folger Reliable water quantity and quality supports the U.S. population and economy, including public and ecosystem health, agriculture, and industry (e.g., energy production, fisheries, navigation, and manufacturing). Research related to developing, using, and protecting water supplies and aquatic ecosystems is diverse. Because of this diversity, federal research activities and facilities span numerous departments, agencies, and laboratories. The federal government also funds water research through grants to universities and other researchers. In recent years, federal agencies have sponsored various prize competitions for water data, science, and technologies and developed cooperative arrangement with various entities. Drinking water contamination and recent droughts, floods, and storms also have increased interest in innovative technologies and practices (including approaches that mimic nature, often referred to as green infrastructure or nature-based infrastructure). The 116 th Congress may consider water research and technology topics which can be broadly divided into water and aquatic ecosystem information, water infrastructure and use, and water quality. Information on water and aquatic ecosystem information includes observations, forecasts, and associated modeling. Science and research agencies collect data remotely and in situ ; they use a wide variety of traditional and new technologies and techniques that inform water-related decisions for infrastructure, agriculture, and drinking water and wastewater services. Some of the water and ecosystem information research topics that may be before the 116 th Congress include the following: water monitoring infrastructure and science programs, including, water quality monitoring, stream gauges, buoys, and groundwater assessments; water-related weather, climate, and earth system science including storm surge, hurricane, rainfall, and drought forecasts and associated remote sensing investments (see " Earth-Observing Satellites "); water conditions in rivers and along coasts (e.g., relative sea-level rise rates); altering the operation of existing reservoirs (e.g., using seasonal forecasts for forecast-informed operations); monitoring and management of invasive species and harmful algal blooms; access to and use of water data (e.g., the Open Water Data Initiative); and coordination of the federal water science and research portfolio, including partnerships with academic and private entities. Water infrastructure research encompasses how to prolong and improve the performance of existing coastal and inland water infrastructure as well as the development of next-generation infrastructure technologies. Some infrastructure and water use research topics include: water augmentation technologies and science to support their adoption, including stormwater capture, water reuse, brackish and seawater desalination, as well as groundwater recharge, storage, and recovery; technologies and materials for monitoring and rehabilitating aging infrastructure, such as materials selection, construction and repair techniques, and detection technologies (e.g., structural health monitors and leak detection); water efficiency technologies and practices; and technologies to enhance infrastructure resilience to droughts, floods, hurricanes, and other natural hazards. The quality of drinking water, surface water, and groundwater is important for public health, environmental protection, food security, and other purposes. Technologies for preventing contamination and for identifying and treating existing contamination is an ongoing research topic for the federal government. Some research topics include: analytical methods and treatment technologies to detect and manage emerging contaminants (e.g., cyanotoxins associated with harmful algal blooms and perfluoroalkyl substances [PFASs]); technologies to prevent and manage contamination at drinking water treatment plants and in distribution systems (e.g., real-time monitoring, treatment to minimize disinfection byproducts, and lead pipe corrosion control); and innovative technologies and practices to protect water quality, including methods for increasing resilience of drinking water systems against natural disasters, protecting drinking water sources for public water system from contamination (e.g., nature-based stormwater management, watershed management approaches, and nonpoint source pollution management). For Further Information Nicole T. Carter, Specialist in Natural Resources Policy Peter Folger, Specialist in Energy and Natural Resources Policy Elena H. Humphreys, Analyst in Environmental Policy Eva Lipiec, Analyst in Natural Resources Policy Anna E. Normand, Analyst in Natural Resources Policy Pervaze A. Sheikh, Specialist in Natural Resources Policy CRS Report R43777, U.S. Geological Survey: Background, Appropriations, and Issues for Congress , by Pervaze A. Sheikh and Peter Folger CRS Report R43407, Drought in the United States: Causes and Current Understanding , by Peter Folger CRS Report R44632, Sea-Level Rise and U.S. Coasts: Science and Policy Considerations , by Peter Folger and Nicole T. Carter CRS Report R44871, Freshwater Harmful Algal Blooms: Causes, Challenges, and Policy Considerations , by Laura Gatz CRS Report R45259, The Federal Role in Groundwater Supply: Overview and Legislation in the 115th Congress , by Peter Folger et al. CRS In Focus IF10719, Forecasting Hurricanes: Role of the National Hurricane Center , by Peter Folger Science and technology play an important role in national defense. The Department of Defense (DOD) relies on a robust research and development effort to develop new military systems and improve existing systems. Issues that may come before the 116 th Congress regarding the DOD's S&T activities include budgetary concerns and the effectiveness of programs to transition R&D results into fielded products. The Department of Defense spends more than $90 billion per year on research, development, testing, and evaluation (RDT&E). Roughly 80%-85% of this is spent on the design, development, and testing of specific military systems. Examples of such systems include large integrated combat platforms such as aircraft carriers, fighter jets, and tanks, among others. They also include much smaller systems such as blast gauge sensors worn by individual soldiers. The other 15%-20% of the RDT&E funding is spent on what is referred to as DOD's Science and Technology Program. The S&T Program includes activities ranging from basic science to demonstrations of new technologies in the field. The goal of DOD's RDT&E spending is to provide the knowledge and technological advances necessary to maintain U.S. military superiority. DOD's RDT&E budget contains hundreds of individual line items. Congress provides oversight of the program, making adjustments to the amount of funding requested for any number of line items. These changes are based on considerations such as whether the department has adequately justified the expenditure or the need to accommodate larger budgetary adjustments. RDT&E priorities and focus, including those of the S&T portion, do not change radically from year to year, though a few fundamental policy-related issues regularly attract congressional attention. These include ensuring that S&T, particularly basic research, receives sufficient funding to support next generation capabilities; seeking ways to speed the transition of technology from the laboratory to the field; and ensuring an adequate supply of S&T personnel. Additionally, the impact of budgetary constraints, including continuing resolutions, on RDT&E may be of interest to the 116 th Congress. Specifically, senior DOD officials have been describing the need to develop and implement a strategy aimed at identifying new and innovative ways to maintain the dominance of U.S. military capabilities into the future, which may require increased investment in RDT&E. In addition, as federal defense-related R&D funding's share of global R&D funding has fallen from about 36% in 1960 to about 4% in 2016, some have become concerned about the ability of DOD to direct the development of leading technologies and to control which countries have access to it. Today, commercial companies in the United States and elsewhere in the world are leading development of groundbreaking technologies in fields such as artificial intelligence, autonomous vehicles and systems, and advanced robotics. DOD has sought to build institutional mechanisms (e.g., the Defense Innovation Unit) and a culture for accessing technologies from nontraditional defense contractors. DOD's ability to maintain a technology edge for U.S. forces may depend increasingly upon these external sources of innovation for its weapons and other systems. For Further Information John F. Sargent Jr., Specialist in Science and Technology Policy Marcy E. Gallo, Analyst in Science and Technology Policy CRS Report R45403, The Global Research and Development Landscape and Implications for the Department of Defense , by John F. Sargent Jr., Marcy E. Gallo, and Moshe Schwartz CRS Report R44711, Department of Defense Research, Development, Test, and Evaluation (RDT&E): Appropriations Structure , by John F. Sargent Jr. CRS Report R45110, Defense Science and Technology Funding , by John F. Sargent Jr. CRS Report R45150, Federal Research and Development (R&D) Funding: FY2019 , coordinated by John F. Sargent Jr. Energy-related science and technology issues that may come before the 116 th Congress include those related to reprocessing spent nuclear fuel, advances in nuclear energy technology, the development of biofuels and ocean energy technology, and international fusion research. Spent fuel from commercial nuclear reactors contains most of the original uranium that was used to make the fuel, along with plutonium and highly radioactive lighter isotopes produced during reactor operations. A fundamental issue in nuclear policy is whether spent fuel should be "reprocessed" or "recycled" to extract plutonium and uranium for new reactor fuel, or directly disposed of without reprocessing. Proponents of nuclear power point out that spent fuel still contains substantial energy that reprocessing could recover, and that reprocessing could reduce the long-term hazard of radioactive waste. However, reprocessed plutonium can also be used in nuclear weapons, so critics of reprocessing contend that federal support for the technology could undermine U.S. nuclear weapons nonproliferation policies. The potential commercial viability of reprocessing or recycling is also an issue. In the 1950s and 1960s, the federal government expected that all commercial spent fuel would be reprocessed to make fuel for "breeder reactors" that would convert uranium into enough plutonium to fuel additional commercial breeder reactors. Increased concern about weapons proliferation in the 1970s and the slower-than-projected growth of nuclear power prompted President Carter to halt commercial reprocessing efforts in 1977, along with a federal demonstration breeder project. During the Reagan Administration, Congress provided funding to restart the breeder demonstration project, but then halted project funding in 1983 while continuing to fund breeder-related research and development by the Department of Energy (DOE). During the Clinton Administration, research on producing nuclear energy through reprocessing was largely halted, although some work on the technology continued for waste management purposes. During the George W. Bush Administration, there was renewed federal support for reprocessing, with a proposal to complete a pilot plant by the early 2020s. During the Obama Administration, plans for the pilot plant were halted and DOE's Fuel Cycle Research and Development Program was redirected toward development of technology options for a wide range of nuclear fuel cycle approaches, including direct disposal of spent fuel (the "once through" cycle), deep borehole disposal, and partial and full recycling. The Trump Administration proposed deep reductions in Fuel Cycle R&D in FY2018 and FY2019. However, the Consolidated Appropriations Act for 2018 ( P.L. 115-141 ) increased the program's funding from $208 million in FY2017 to $260 million in FY2018—a 26% boost. Funding was increased slightly further, to $264 million, by the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 ( P.L. 115-244 ). The level of funding for nuclear fuel cycle and waste disposal R&D may be a continuing issue in the 116 th Congress. Another DOE project related to reprocessing policy is the uncompleted Mixed Oxide Fuel Fabrication Facility (MFFF) at the Department's Savannah River Site in South Carolina. MFFF would produce fuel for commercial nuclear reactors using surplus nuclear weapons plutonium, as part of an agreement with Russia to reduce nuclear weapons material. Critics of the project contend that MFFF would subvert U.S. nonproliferation efforts by encouraging the use of plutonium fuel. Because of rising costs, the Obama Administration proposed to halt the MFFF project in FY2017 and pursue alternative plutonium disposition options. The Trump Administration's FY2018 budget request also called for terminating MFFF. The FY2018 National Defense Authorization Act ( P.L. 115-91 ) authorized DOE to pursue an alternative disposal option if its total costs were found to be less than half of those for completing and operating MFFF. The Consolidated Appropriations Act for 2018 conformed to the NDAA authorizing language. Energy Secretary Rick Perry certified in May 2018 that the cost saving requirement for terminating MFFF would be met. For FY2019, P.L. 115-244 appropriated $220 million, the same as the request, to begin shutting down the project. Termination of MFFF could shift the debate on plutonium disposition policy toward other options, such as dilution and disposal in a deep repository. R&D funding for such alternatives could be an issue for the 116 th Congress. For Further Information Mark Holt, Specialist in Energy Policy CRS Report R42853, Nuclear Energy: Overview of Congressional Issues , by Mark Holt CRS Report RL34234, Managing the Nuclear Fuel Cycle: Policy Implications of Expanding Global Access to Nuclear Power , coordinated by Mary Beth D. Nikitin CRS Report R43125, Mixed-Oxide Fuel Fabrication Plant and Plutonium Disposition: Management and Policy Issues , by Mark Holt and Mary Beth D. Nikitin All currently operating commercial nuclear power plants in the United States are based on light water reactor (LWR) technology, in which ordinary water cools the reactor and acts as a neutron moderator to help sustain the nuclear chain reaction. DOE has long conducted research and development work on other, non-LWR nuclear technologies that could have advantages in safety, waste management, and cost. A growing number of private-sector firms are pursuing commercialization of advanced nuclear technologies as well. Advanced nuclear energy technologies include high-temperature gas-cooled reactors, liquid metal-cooled reactors, and molten salt reactors (in which the nuclear fuel is dissolved in the coolant), among a wide range of other concepts. Many of these concepts would involve nuclear chain reactions using fast neutrons, which are not slowed by a moderator. Research on advanced reactor coolants, materials, controls, and safety is carried out by DOE's Advanced Reactor Technologies program. The program received $111.5 million for FY2019 ( P.L. 115-244 ), 51% above the Administration request. The appropriation includes $20 million for research and development on microreactors—reactors with electric generating capacity of only a few megawatts, a tiny fraction of the capacity of existing commercial reactors. Private-sector nuclear technology companies contend that a major obstacle to commercializing advanced reactors is that the Nuclear Regulatory Commission's (NRC's) licensing process is based on existing LWR technology. They have urged NRC to develop a licensing and regulatory framework that could apply to all nuclear concepts. They also have recommended a "staged review process" to provide conditional NRC approval for advanced reactor designs at key milestones toward the issuance of an operating license. NRC and DOE are currently implementing the Joint Advanced Non-Light Water Reactors Licensing Initiative to adapt existing general design criteria for LWRs for use by advanced reactor license applications. Under that initiative, NRC issued "Guidance for Developing Principal Design Criteria for Non-Light Water Reactors" on April 9, 2018. NRC is also supporting industry efforts to develop guidance for technology-neutral reactor licensing. Legislation to promote advanced nuclear power technologies, the Nuclear Energy Innovation Capabilities Act of 2017 ( P.L. 115-248 ), was signed by President Trump on September 28, 2018. A major provision of the bill would authorize DOE national laboratories or other DOE-owned sites to host reactor demonstration projects sponsored fully or partly by the private sector. It would also require DOE to determine the need for a fast-neutron "versatile" test reactor and authorize grants to help pay for NRC licensing of advanced reactor designs. Related legislation, the Nuclear Energy Innovation and Modernization Act ( P.L. 115-439 ), was signed into law January 14, 2019. Among other provisions, it would require NRC to develop a regulatory framework that would encourage commercialization of advanced nuclear technology. Some public-private R&D on advanced nuclear technology is already being conducted at national labs under DOE's Gateway for Accelerated Innovation in Nuclear (GAIN) initiative. Congress appropriated $65 million ( P.L. 115-244 ) for early-stage development of a versatile advanced test reactor in FY2019. The 116 th Congress may consider additional legislation on advanced reactors, including funding for R&D, licensing, and demonstration. For Further Information Mark Holt, Specialist in Energy Policy CRS Insight IN10765, Small Modular Nuclear Reactors: Status and Issues , by Mark Holt CRS Report R42853, Nuclear Energy: Overview of Congressional Issues , by Mark Holt Biofuels—liquid transportation fuels produced from biomass feedstock—are often described as an alternative to conventional fuels. Some see promise in producing liquid fuels from a domestic feedstock that may reduce dependence on foreign sources of oil, contribute to improving rural economies, and lower greenhouse gas emissions. Others regard biofuels as potentially causing more harm to the environment (e.g., air and water quality concerns), encouraging landowners to put more land into production, and being prohibitively expensive to produce. The debate about the feasibility of biofuels is complex, as policymakers consider a multitude of factors (e.g., feedstock costs, timeframe to reach substantial commercial-scale advanced biofuel production, environmental impact of biofuels). The debate can be even more complicated when considering that biofuels may be produced using numerous biomass feedstocks and conversion technologies. Congress has expressed interest in biofuels for decades, with most of its attention on the production of "first-generation" biofuels (e.g., cornstarch ethanol). Farm bills have had a significant effect on biofuel research and development. Starting in 2002, the farm bills have contained an energy title with several programs focused on assisting biofuel production. In addition, the DOE Office of Energy Efficiency and Renewable Energy (EERE) supports research and development for domestic biofuel production. Congress and the Administration have debated the amount of funding both USDA and DOE should receive for biofuel initiatives. While commercial-scale production of "first-generation" biofuels is well established, commercial-scale production for some advanced biofuels (e.g., cellulosic ethanol) is in its infancy. In 2007, Congress expanded one policy that has supported an increase in advanced biofuel production—the Renewable Fuel Standard (RFS). The RFS requires U.S. transportation fuel to contain a minimum volume of biofuel, a growing percentage of which is to come from advanced biofuels. The RFS is under scrutiny for various reasons, including the Environmental Protection Agency (EPA) exercising its regulatory authority to issue a waiver and reduce the total renewable fuel volume below what was required by statute and concerns about RFS compliance. This creates significant uncertainty for certain stakeholders, with the result that some of the advanced biofuel targets are not being met. An overarching issue is that the statute may require more biofuel to be produced than can be used given the existing motor fuel distribution infrastructure and the limited fleet of passenger vehicles that are built to run on higher percentage blends of biofuels. The 116 th Congress may consider whether to modify various biofuel promotional efforts, or to maintain the status quo. For Further Information Kelsi Bracmort, Specialist in Natural Resources and Energy Policy CRS Report R43325, The Renewable Fuel Standard (RFS): An Overview , by Kelsi Bracmort CRS In Focus IF10842, The Renewable Fuel Standard: Is Legislative Reform Needed? , by Kelsi Bracmort CRS In Focus IF10639, Farm Bill Primer: Energy Title , by Kelsi Bracmort CRS In Focus IF10661, DOE Office of Energy Efficiency and Renewable Energy: FY2017 Appropriations and the FY2018 Budget Request , by Kelsi Bracmort and Corrie E. Clark Technological innovations are key drivers of U.S. ocean energy development. They may facilitate exploration of previously inaccessible resources, provide cost efficiencies in a low-oil-price environment, address safety and environmental concerns, and enable advances in emerging sectors such as U.S. offshore wind. Private industry, universities, and government are all involved in ocean energy R&D. At the federal level, the Department of Energy and the Department of the Interior (DOI) both support ocean energy research. One area of policymaker interest involves deepwater oil and gas operations. Industry interest in expanding deepwater activities, improving efficiency, and reducing costs has prompted improvements in drilling technologies and steps toward automated monitoring and maintenance. The oil and gas industry and federal regulators also have focused on safety improvements to reduce the likelihood of catastrophic oil spills in deep water. In 2016, DOI promulgated safety regulations that tighten requirements for offshore blowout preventer systems and other well control equipment. In April 2018, DOI published proposed revisions to the rule, including several changes that could reduce the cost to industry and time involved in meeting certain technological requirements. For both the original rule and the proposed revisions, stakeholders have debated the potential costs of compliance and whether the technological requirements are unnecessarily prescriptive or, conversely, not prescriptive enough to achieve safety aims. Congress may also consider technology issues related to offshore drilling in the Arctic, where sea ice and infrastructure gaps pose challenges for the economic viability and safety of mineral exploration. A focus of industry R&D is on technology to extend the Arctic drilling season beyond the periods where sea ice is absent—for example, by developing ice-capable mobile offshore drilling units (MODUs). DOI finalized safety regulations for Arctic exploratory drilling in 2016. President Trump's Executive Order 13795 ordered DOI to review these regulations and DOI's Fall 2018 Regulatory Agenda includes an anticipated rule revision. Some have argued that the regulations are too costly for industry and give inadequate weight to available technologies (such as those for well capping) that could reduce safety costs. Others question whether any rules or technologies can adequately ensure drilling safety in the Arctic given the environmental risks. Among renewable ocean energy sources, only wind energy is poised for commercial application in U.S. waters. In December 2016, the first U.S. offshore wind farm, off of Rhode Island, began regular operations. A focus of R&D is technology to increase offshore turbine efficiency and reduce costs, including floating turbines for deep waters, where resources may be more abundant and user conflicts fewer. Other research explores improvements to electrical infrastructure, such as integrating transmission networks for multiple projects. A potential issue for Congress is whether and how to support or incentivize offshore wind development and other ocean renewables. For Further Information Laura Comay, Specialist in Natural Resources Policy CRS Report R44692, Five-Year Program for Federal Offshore Oil and Gas Leasing: Status and Issues in Brief , by Laura B. Comay CRS Report R42942, Deepwater Horizon Oil Spill: Recent Activities and Ongoing Developments , by Jonathan L. Ramseur CRS Report R41153, Changes in the Arctic: Background and Issues for Congress , coordinated by Ronald O'Rourke ITER (formerly known as the International Thermonuclear Experimental Reactor) is an international fusion energy research facility currently under construction in Cadarache, France. When completed, ITER is to be the world's largest fusion reactor and the first capable of producing more energy than it consumes. Although the energy output from ITER will not be harnessed to produce electricity, fusion researchers see ITER as the next step toward implementation of fusion energy as a power source. ITER is an international collaboration. Along with the United States, the partners are the European Union, China, India, Japan, Russia, and South Korea. The United States withdrew from the initial design phase of ITER in 1998 at congressional direction, largely because of concerns about cost and scope. The project was restructured, and the United States rejoined in 2003. The formal international agreement to build the facility was approved in 2006. The European Union, as host, is responsible for 45% of the construction cost, while the United States and the other participating countries are responsible for 9% each. Most of the U.S. share (which is $132 million in FY2019) is being contributed in kind, in the form of components and equipment sourced mostly from U.S. companies, universities, and national laboratories. The construction phase of ITER is planned for completion in 2027. Once operational, the facility is expected to have a lifespan of 15-25 years. During the operation phase, and during subsequent deactivation and decommissioning, the agreed U.S. cost share is 13%. In recent years, ITER management issues, schedule delays, and cost growth have sometimes led to proposals in Congress to terminate U.S. participation. A central issue is that U.S. funding for ITER may be crowding out funding for domestic fusion energy research. DOE budget documents show the cost of U.S. participation in ITER in FY2020 and beyond as "to be determined" once the Administration decides whether to continue participating in the project. In 2018, at DOE's request, the National Academies of Science, Engineering, and Medicine issued a strategic plan for fusion energy research. It recommended, first, that "the United States should remain an ITER partner as the most cost-effective way to gain experience with a burning plasma at the scale of a power plant." Second, looking beyond ITER, it recommended that "the United States should start a national program of accompanying research and technology leading to the construction of a compact pilot plant that produces electricity from fusion at the lowest possible capital cost." The DOE Fusion Energy Sciences Advisory Committee has also embarked on a strategic planning effort, encompassing both ITER and domestic research, with a final report anticipated in late 2020. The 116 th Congress may continue oversight of ITER's scientific progress, cost, and schedule, and may revisit the debate about whether to continue U.S. participation. For More Information Daniel Morgan, Specialist in Science and Technology Policy The federal government spends billions of dollars supporting research and development to protect the homeland. Some of the issues that the 116 th Congress may consider include how the Department of Homeland Security performs research and development; federal efforts to develop and procure new medical countermeasures against chemical, biological, radiological, and nuclear agents; and federal efforts to ensure the safety and security of laboratories working with dangerous pathogens. The Department of Homeland Security (DHS) has identified five core missions: to prevent terrorism and enhance security, to secure and manage the borders, to enforce and administer immigration laws, to safeguard and secure cyberspace, and to ensure resilience to disasters. New technology resulting from research and development can contribute to all these goals. The Directorate of Science and Technology has primary responsibility for establishing, administering, and coordinating DHS R&D activities. The Domestic Nuclear Detection Office (DNDO) is responsible for R&D relating to nuclear and radiological threats. Several other DHS components, including the Coast Guard, also fund R&D and R&D-related activities related to their missions. Coordination of DHS R&D is a long-standing congressional interest. In 2012, the Government Accountability Office (GAO) concluded that because so many components of the department are involved, it is difficult for DHS to oversee R&D department-wide. In January 2014, the joint explanatory statement for the Consolidated Appropriations Act, 2014 ( P.L. 113-76 ) directed DHS to implement and report on new policies for R&D prioritization. It also directed DHS to review and implement policies and guidance for defining and overseeing R&D department-wide. In July 2014, GAO reported that DHS had updated its guidance to include a definition of R&D and was conducting R&D portfolio reviews across the department, but that it had not yet developed policy guidance for DHS-wide R&D oversight, coordination, and tracking. In December 2015, the explanatory statement for the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) stated that DHS "lacks a mechanism for capturing and understanding research and development (R&D) activities conducted across DHS, as well as coordinating R&D to reflect departmental priorities." The Common Appropriations Structure that DHS introduced in February 2016 in its FY2017 budget request includes an account titled Research and Development for each DHS component. It remains to be seen whether this change will help to address congressional concerns about DHS-wide R&D coordination. DHS has reorganized its R&D-related activities several times. In December 2017, it established a new Countering Weapons of Mass Destruction Office (CWMDO), consisting of DNDO, most functions of the Office of Health Affairs (OHA), and some other elements. DNDO and OHA were themselves both created, more than a decade ago, largely by reorganizing elements of the S&T Directorate. The Countering Weapons of Mass Destruction Act of 2018 ( P.L. 115-387 ) expressly authorized the establishment and activities of CWMDO. The 116 th Congress may examine the implementation of that act. For Further Information Daniel Morgan, Specialist in Science and Technology Policy The anthrax attacks of 2001 highlighted the nation's vulnerability to biological terrorism. The federal government responded to these attacks by increasing efforts to protect civilians against chemical, biological, radiological, and nuclear (CBRN) terrorism. Effective medical countermeasures, such as drugs or vaccines, could reduce the impact of a CBRN attack. Policymakers identified a lack of such countermeasures as a challenge to responding to the CBRN threat. To address this gap, the federal government created several programs to encourage private sector development of new CBRN medical countermeasures. Despite these efforts, the federal government still lacks medical countermeasures for many CBRN threats, including Ebola. The Biomedical Advanced Research and Development Authority (BARDA) and Project BioShield are two key pieces of the federal efforts supporting the development and procurement of new CBRN medical countermeasures. BARDA directly funds the advanced development of countermeasures through contracts with private sector developers. Project BioShield provides a procurement mechanism to remove market uncertainty for countermeasure developers. It allows the federal government to agree to buy a countermeasure up to 10 years before the product is likely to finish development. Congress has modified these and related programs to improve their performance, efficiency, and transparency to oversight. However, some key issues remain unresolved, including those related to appropriations, interagency coordination, countermeasure prioritization and implementation of the 2018 National Biodef e nse Strategy . In addition to questions regarding the amount of funding, Congress may consider whether the appropriations are efficiently balanced throughout the research and development pipeline. Policymakers may consider whether the congressionally-mandated planning and transparency requirements have sufficiently enhanced coordination of the multiagency countermeasure development enterprise. Additionally, Congress may consider whether the countermeasure prioritization process appropriately balances the need to address traditional threats such as anthrax and smallpox with the threat posed by emerging infectious diseases such as Ebola. Finally, Congress may consider the administration's progress implementing the new National Biodefense Strategy and how it affects the medical countermeasure research and development enterprise. For Further Information Frank Gottron, Specialist in Science and Technology Policy In addition to its general oversight of workplace safety, the federal government addresses the safety of laboratory personnel who work with infectious microorganisms through guidance such as Biosafety in Microbiological and Biomedical Laboratories (BMBL), published by the Department of Health and Human Services (HHS) Centers for Disease Control and Prevention (CDC) and National Institutes of Health (NIH). BMBL sets "Biosafety Levels" for work with the highest-risk pathogens. BMBL guidance is often adopted as a requirement; for example, compliance is required of federal grant recipients. Biosecurity requirements, to protect the public from intentional and unintentional releases of pathogens, were first mandated by Congress in 1996, and expanded through subsequent reauthorizations. The Federal Select Agent Program (FSAP), administered jointly by CDC and the U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS), oversees the possession of "select agents," certain biological pathogens and toxins with the potential to cause serious harm to public, animal, or plant health. All U.S. laboratory facilities—including those at government agencies, universities, research institutions, and commercial entities—that possess, use, or transfer select agents must register with the program and adhere to specified best practices. All persons given access to select agents must undergo background investigations conducted by the Federal Bureau of Investigation (FBI). Several incidents involving the mishandling of select agents in federal laboratories have occurred in recent years. For example, samples of decades-old but viable smallpox virus were found in an FDA laboratory on an NIH campus. Laboratories at CDC, one of the select agent regulatory agencies, had incidents involving the anthrax agent, a virulent avian influenza virus, and Ebola virus. Each incident was attributed, at least in part, to lapses in protocol or some other form of human error. Several incident reports have recommended improvements in the "culture of safety" in laboratories, standardized microbial handling practices, and better incident reporting, among other measures. Additional entities, including the House Committee on Energy and Commerce, the Comptroller General, and the HHS Inspector General have also investigated these lapses and made similar recommendations. The FSAP is designed to ensure the secure handling of designated pathogens while allowing important research on these pathogens to proceed. The 2018 Farm Bill amended the authority to regulate animal and plant pathogens, requiring the Secretary of Agriculture, when determining which agents to list, to consider the potential effects of such listing on animal and plant disease research. The HHS Secretary is not required to make a similar consideration when determining the list of agents that may pose a threat to public health. The 116 th Congress may choose to continue FSAP program oversight, including through committee investigations, since program reports show that occupational exposures persist in regulated facilities. Congress may also review and revise the authorities for the public health and agriculture arms of the program. The authorizations of appropriations for each expired in 2007. For Further Information Sarah A. Lister, Specialist in Public Health and Epidemiology The rapid pace of advancements in information technology presents several issues for congressional policymakers, including those related to cybersecurity, artificial intelligence, broadband deployment, access to broadband networks and net neutrality, public safety networks, emergency alerting, 5G networks, the Internet of Things, federal networking R&D, and quantum information science. The federal policy framework for cybersecurity is complex, including more than 50 statutes as well as presidential directives and related authorities. The 116 th Congress may face a number of significant issues related to cybersecurity, in addition to the oversight of enacted laws. Among those issues are the following: Cybersecurity for critical infrastructure , given that most of the nation's critical infrastructure is not owned by the federal government and regulatory cybersecurity requirements vary substantially among the sectors; Prevention of and response to cybercrime , especially given its substantially international character; The relationship between cyberspace and national security , including information operations aimed at election infrastructure and political campaigns; and Federal R&D and other investments to protect information systems and networks. In addition to such short- and medium-term issues, Congress may consider responses to a number of long-term challenges, including the following: Design— the degree to which information systems can be designed with security built in, in the face of economic obstacles and the other challenges; Incentives— ways to correct an economic incentive structure for cybersecurity that has often been called distorted or even perverse, with cybercrime widely regarded as cheap, profitable, and comparatively safe for the criminals, while cybersecurity is often considered expensive and imperfect, with uncertain economic returns; Consensus— finding consensus on a consistent and effective model for approaching cybersecurity, given stakeholders from different sectors and different work subcultures with varying needs, goals, and perspectives ; and Environment— a rapidly evolving cyberspace environment that both complicates the threat environment and may pose opportunities for shaping the direction of that evolution toward greater security, including, for example, the growth and influence of disruptive technologies (see " Disruptive and Convergent Technology "). For Further Information Eric A. Fischer, Senior Specialist in Science and Technology Chris Jaikaran, Analyst in Cybersecurity Policy CRS In Focus IF10559, Cybersecurity: An Introduction , by Chris Jaikaran CRS Report R45127, Cybersecurity: Selected Issues for the 115th Congress , coordinated by Chris Jaikaran CRS Report R45142, Information Warfare: Issues for Congress , by Catherine A. Theohary CRS In Focus IF10602, Cybersecurity: Federal Agency Roles , by Eric A. Fischer CRS In Focus IF10677, The Designation of Election Systems as Critical Infrastructure , by Eric A. Fischer CRS Report R44923, FY2018 National Defense Authorization Act: Selected Military Personnel Issues , by Kristy N. Kamarck, Lawrence Kapp, and Barbara Salazar Torreon The rapid development and growing use of artificial intelligence (AI) technologies has been of increasing interest to policymakers. Congressional activities on AI in the 115 th Congress included multiple committee hearings in both the House of Representatives and the Senate, the introduction of numerous AI-focused bills, the passage of AI provisions in legislation, and a variety of congressional briefings. Activity related to AI may continue in the 116 th Congress. Generally, AI is considered to be computerized systems that work and react in ways commonly thought to require intelligence, encompassing many methodologies and applications. Common examples include machine learning, computer vision, natural language processing, and applications in such areas as robotics and autonomous vehicles. In addition to transportation, AI is already being employed across a variety of sectors, including health care, agriculture, manufacturing, and finance. Current AI technologies fall into a category called "narrow AI," meaning that they are highly tailored to particular tasks. In contrast, potential future AI systems that exhibit adaptable intelligence across a range of cognitive tasks, often referred to as "general AI," are unlikely to be developed for at least decades, if ever, according to most researchers. Potential policy considerations for AI span cross-sector and sector-specific topics, in both the defense and nondefense spaces. For example, broad concerns have focused on workforce impacts from the implementation of AI and AI-driven automation, including potential job losses and the need for worker retraining; the balance of federal and private sector funding for AI; international competition in AI research and development (R&D) and deployment, particularly with China and Russia; the development of standards and testing for AI systems; the need for and effectiveness of federal coordination efforts in AI; and incorporation of privacy, security, transparency, and accountability considerations in AI systems. Particular considerations for AI in the defense space have included the balance of human and automated decisionmaking in military operations; how the Department of Defense engages with the private sector for defense adaptation of commercially developed AI systems and access to AI expertise; and private sector concerns about the use of AI R&D in combat situations. For Further Information Laurie A. Harris, Analyst in Science and Technology Policy CRS In Focus IF10608, Overview of Artificial Intelligence , by Laurie A. Harris CRS In Focus IF10937, Artificial Intelligence (AI) and Education , by Joyce J. Lu and Laurie A. Harris CRS Report R45392, U.S. Ground Forces Robotics and Autonomous Systems (RAS) and Artificial Intelligence (AI): Considerations for Congress , coordinated by Andrew Feickert Broadband—whether delivered via fiber, cable modem, copper wire, satellite, or wirelessly—is increasingly the technology underlying telecommunications services such as voice, video, and data. Since the initial deployment of broadband in the late 1990s, Congress has viewed broadband infrastructure deployment as a means towards improving regional economic development, and in the long term, to create jobs. According to the Federal Communications Commission's (FCC's) National Broadband Plan, the lack of adequate broadband availability is most pressing in rural America, where the costs of serving large geographical areas, coupled with low population densities, often reduce economic incentives for telecommunications providers to invest in and maintain broadband infrastructure and service. Broadband adoption also continues to be a problem, with a significant number of Americans having broadband available, but not subscribing. Populations lagging behind in broadband adoption include people with low incomes, seniors, minorities, the less-educated, nonfamily households, and the nonemployed. The 116 th Congress may face a range of broadband-related issues. These may include the continued transition of the telephone-era Universal Service Fund from a voice to a broadband-based focus, funding for broadband programs in the Rural Utilities Service, infrastructure legislation that may include funding and incentives for broadband buildout, the adequacy of broadband deployment data and mapping, the development of new wireless spectrum policies, and to what extent, if any, regulation is necessary to ensure an open internet. Additionally, the 116 th Congress may choose to examine the existing regulatory structure and consider possible revision of the 1996 Telecommunications Act and its underlying statute, the Communications Act of 1934. Both the convergence of telecommunications providers and markets and the transition to an Internet Protocol (IP) based network have, according to a growing number of policymakers, made it necessary to consider revising the current regulatory framework. How a possible revision might create additional incentives for investment in, deployment of, and subscribership to, our broadband infrastructure is likely to be just one of many issues under consideration. To the extent that Congress may consider various options for further enhancing broadband deployment, a key issue is how to develop and implement federal policies intended to increase the nation's broadband availability and adoption, while at the same time minimizing any deleterious effects that government intervention in the marketplace may have on competition and private sector investment. For Further Information Lennard G. Kruger, Specialist in Science and Technology Policy Angele A. Gilroy, Specialist in Telecommunications Policy CRS Report RL30719, Broadband Internet Access and the Digital Divide: Federal Assistance Programs , by Lennard G. Kruger and Angele A. Gilroy CRS Report RL33816, Broadband Loan and Grant Programs in the USDA's Rural Utilities Service , by Lennard G. Kruger Determining the appropriate framework to ensure an open internet is central to the debate over broadband access. A focal point in the policy debate centers on what, if any, steps are necessary to ensure unfettered internet access to content, services, and applications providers, as well as consumers. The move to place restrictions on the owners of the networks that compose and provide access to the internet, to ensure equal access and nondiscriminatory treatment, is referred to as "net neutrality." While there is no single accepted definition of "net neutrality," most agree that any such definition should include the general principles that owners of the networks that compose and provide access to the internet (i.e., broadband access providers) should not control how consumers lawfully use that network, and should not be able to discriminate against content provider access to that network. Some policymakers contend that more specific regulatory guidelines are necessary to protect the marketplace from potential abuses which could threaten the net neutrality concept. Others contend that existing laws and policies are sufficient to deal with potential anti-competitive behavior and that additional regulations would have negative effects on the expansion and future development of the internet. Broadband regulation and the Federal Communications Commission's (FCC's) authority to implement such regulations is an issue of growing importance in the wide ranging policy debate over broadband access. What, if any, action should be taken to ensure net neutrality is part of the overall discussion. The FCC, in 2015, adopted rules (2015 Order) that established a comprehensive regulatory framework to address the regulation of broadband internet access providers. The 2015 Order contained among its provisions those that reclassified such services as a telecommunications service and established conduct rules for providers. However, the FCC, in December 2017, adopted new rules (2017 Order) that largely reverse the 2015 regulatory framework and shift much of the oversight from the FCC to the Federal Trade Commission and the Department of Justice. The FCC's move to adopt the 2017 Order has reopened the debate over what the appropriate framework is to ensure an open internet and whether Congress should enact legislation to establish this framework. A consensus on what that framework should entail remains elusive. Some Members of Congress support the less regulatory approach contained in the 2017 Order, which, they argue, will stimulate broadband investment, deployment, and innovation. Others support the regulatory framework adopted in the 2015 Order, which provides for a more stringent regulatory framework, and is needed, they state, to protect content, services, and applications providers, as well as consumers, from potential discriminatory behaviors which conflict with net neutrality principles. Still others, while supporting a framework containing specific behavioral rules to address potential anticompetitive practices, do not support the telecommunications services classification. Whether Congress will take action to amend existing law to provide guidance and more stability to FCC authority remains to be seen. For Further Information Angele A. Gilroy, Specialist in Telecommunications Policy CRS In Focus IF10955, Access to Broadband Networks: Net Neutrality , by Angele A. Gilroy CRS Report R40616, The Net Neutrality Debate: Access to Broadband Networks , by Angele A. Gilroy The Middle Class Tax Relief and Job Creation Act of 2012 ( P.L. 112-96 ) authorized the Federal Communications Commission (FCC) to allocate spectrum to public safety use. The act also created the First Responder Network Authority (FirstNet), authorized FirstNet to establish a new, nationwide broadband network for public safety, and provided $7 billion in funding for the project. The network is intended to address the communication problems first responders experienced during September 11, 2001, whereby public safety systems were not interoperable, and responders could not communicate or coordinate an effective response. Congress authorized FirstNet to enter into a public-private partnership to deploy the network. In March 2017, FirstNet selected AT&T, through a competitive bidding process, as its partner. AT&T has been deploying the network as specified in its agreement with FirstNet and state-specific plans, and public safety agencies are subscribing to FirstNet. A concern for policymakers is that the FirstNet/AT&T contract and state plans contain detailed information on deployment; however both are deemed proprietary and not available for public review. Without details on how the network is being deployed in each state, and how federal resources are being used, it may be difficult for Congress to ensure the requirements of the law are being met. Given the federal investment in the project ($6.5 billion and 20 MHz of valuable broadband spectrum), and the importance of the FirstNet network to the life of safety of first responders and citizens, the 116 th Congress may consider continuing its oversight of this project. For Further Information Jill Gallagher, Analyst in Telecommunications Policy CRS Report R45179, The First Responder Network (FirstNet) and Next-Generation Communications for Public Safety: Issues for Congress , by Jill C. Gallagher Local officials are responsible for issuing emergency alerts. Some localities use commercial alerting systems to send electronic alerts (e.g., cell phone alerts, email alerts). Others rely on the federal alerting system—the Integrated Public Alert and Warning System (IPAWS), which allows local officials to send alerts across many media outlets (e.g., cell phone, television, radio). Many localities use both systems to ensure alerts are received. The false alert of an incoming ballistic missile to Hawaii on January 13, 2018, raised questions about alerting roles and responsibilities. While the national alerting system—IPAWS—worked as intended, the roles and responsibilities for issuing alerts of incoming missiles was debated in Congress. The 2017 and 2018 wildfires in California raised additional alerting issues. Several counties in California used a commercial alerting system that reached only those residents who signed up for the service (whereas IPAWS would have sent an alert to all devices in the affected area). Local officials were concerned that cell phone alerts issued through IPAWS could not be narrowly targeted, and would result in over-alerting, mass evacuation, and overcrowding on evacuation routes, which could put people and first responders in danger. In January 2018, the Federal Communications Commission adopted rules requiring carriers to improve geo-targeting of wireless emergency alerts (WEA)—alerts to cell phones issued through IPAWS. Carriers must comply with these rules by November 30, 2019. The 116 th Congress may examine roles and responsibilities for issuing different alerts, and consider policies that clarify alerting procedures. Congress may also consider investments in activities (e.g., best practices) to improve local alerting capabilities, and programs that educate individuals on the appropriate response to alerts. Lastly, Congress may examine state and local back-up alerting capabilities in the event communication systems fail, and wireless alerts cannot be delivered. For Further Information Jill Gallagher, Analyst in Telecommunications Policy CRS In Focus IF10816, Emergency Alerting—False Alarm in Hawaii , by Jill C. Gallagher As more people are using more data on more devices, demand for mobile data is rising. Current telecommunication networks cannot always meet consumer demands for data. Telecommunication companies are continually deploying new technologies to offer better coverage, faster speeds, more data, and new services to customers. The newest technologies are called fifth-generation (5G) technologies, as they succeed 2G, 3G, and 4G systems. 5G technologies offer vastly improved speeds and greater bandwidth to meet demands for mobile data. 5G technologies enable providers to expand services to consumers (e.g., video streaming, virtual reality applications) and support new systems for industrial users (e.g., medical monitoring, industrial control systems). When fully deployed, 5G is expected to power the Internet of Things—systems of interconnected devices (e.g., smart homes), and emerging technologies (e.g., autonomous vehicles). 5G is expected to drive the development of new technologies, support new uses by consumers and industry, and create new markets, new revenues, and new jobs. Since companies that are first to market with new technologies often capture the bulk of the new revenues, companies around the world are racing to develop and deploy 5G technologies. Recognizing the potential for economic gain, countries (i.e., central governments) are supporting the development and deployment of 5G technologies. In the United States, the federal government has allocated spectrum for 5G and streamlined cell siting regulations to speed deployment. The 116 th Congress may continue to monitor U.S. competitiveness in the global 5G market, and consider policies (e.g., spectrum allocation policies) and programs that could expedite 5G deployment. In developing 5G policies, Congress may consider concerns of some local governments and individuals related to 5G deployment, including local authority over 5G cell sites, deployment of 5G to rural areas, and privacy and security of data transmitted over 5G devices and systems. For Further Information Jill Gallagher, Analyst in Telecommunications Policy The Internet of Things (IoT) may continue to be a focal point of far-reaching debates during the 116 th Congress. The term refers to networks of objects with two features—a unique identifier and internet connectivity. Such "smart" objects can form systems that communicate among themselves, usually in concert with computers, allowing automated and remote control of many independent processes and potentially transforming them into integrated systems. Such objects may include vehicles, appliances, medical devices, electric grids, transportation infrastructure, manufacturing equipment, building systems, and so forth. The IoT is increasingly impacting homes and communities, factories and cities, and nearly every sector of the economy, both domestically and globally, among them agriculture (precision farming), health (medical devices), and transportation (self-driving automobiles and unmanned aerial vehicles). An increasing number of these systems require access to radio frequency spectrum in order to connect to the internet or other networks. The development of 5G wireless technologies is likely to develop in tandem with the IoT, potentially expanding substantially the opportunities for growth in use of IoT devices. Although the full extent and nature of impacts of the IoT remain uncertain, some economic analyses predict that it will contribute trillions of dollars to economic growth over the next decade. The IoT, for example, may be able to facilitate more integrated and functional infrastructure, especially in "smart cities," through improvements in transportation, utilities, and other municipal services. Sectors that may be particularly affected are agriculture, energy, government, health care, manufacturing, and transportation. The federal government may play an important role in enabling the development and deployment of the IoT, including R&D, standards, regulation, and support for testbeds and demonstration projects. No single federal agency has overall responsibility for the IoT. Various agencies have relevant regulatory, sector-specific, and other mission-related responsibilities, such as the Departments of Commerce, Health, Energy, Transportation, and Defense, the National Science Foundation, the Federal Communications Commission, and the Federal Trade Commission. The range of issues that might be the subject of congressional activity includes the following: security of objects and the systems and networks to which they are connected, given especially that many IoT devices are operational technology, the compromise of which can have physical impacts (see also " Cybersecurity "); privacy of the information gathered and transmitted by objects; standards for the IoT, especially with respect to connectivity; transition to a new Internet Protocol (IPv6) that can handle the anticipated exponential increase in the number of IP addresses required by the IoT, along with the growth of 5G wireless; methods for updating the software used by IoT objects in response to security and other needs; energy management for IoT objects, especially those not connected to the electric grid; and the role of the federal government in development and deployment, standards, regulation, and communications, including the impact of federal rules regarding "net neutrality." The Internet of Things represents more than devices connected through networks, and more than internet or radio frequency spectrum policy. Its growth will likely require significant changes in—and coordination among—many government departments and agencies. For Further Information Eric A. Fischer, Senior Specialist in Science and Technology CRS Report R44227, The Internet of Things: Frequently Asked Questions , by Eric A. Fischer The rise of e-commerce, social media, and big data analytics have allowed new business models to emerge as part of the "digital economy." In the realm of international tax policy, though, certain types of activities and markets in the digital economy have been singled out for "digital services taxes" (DSTs) by some jurisdictions—primarily in Europe. For example, Spain is set to implement a DST of 3% on the gross revenue derived from certain digital services (e.g., online advertising, online marketplaces, and user data tracking services) derived from users within Spain beginning in 2019. Similarly, the United Kingdom (UK) intends to implement a 2% DST on revenues from social media platforms, online marketplaces, and search engines derived from UK user activity in 2020. Both DSTs have minimum thresholds based on global total revenue and revenue from covered business activities to local users that effectively target the largest global digital economy companies. The EU is also actively considering a digital tax across all member states. This issue may be of interest to Congress because the taxes appear to primarily target U.S. corporations, such as Facebook, Google, and Amazon. As such, there is opposition to unilateral efforts by foreign countries to tax the digital economy. DSTs also raise potential issues for U.S. foreign tax credit treatment under bilateral tax treaties, which are considered and ratified by the Senate. Additionally, some Members of Congress may support one of the purported justifications for DSTs (a perceived "unfairness" arising from the relatively low rate of tax paid by some firms in the digital economy), but would prefer alternative remedies to raise taxes or reduce tax preferences on these corporations. For example, the 2017 tax revision ( P.L. 115-97 ) enacted a new tax on global intangible low-taxed income ("GILTI"), which is designed to be a minimum tax on foreign-source income earned from intangible assets (e.g., patents, trade secrets). In the 115 th Congress, the "No Tax Break for Outsourcing Act" (H.R. 5108; S. 2459 ) would have increased the GILTI tax rate to 21% (the same as the top statutory corporate income tax rate), among other changes. For Further Information Sean Lowry, Analyst in Public Finance CRS Report R45186, Issues in International Corporate Taxation: The 2017 Revision (P.L. 115-97) , by Jane G. Gravelle and Donald J. Marples Changing technology presents opportunities and challenges for U.S. law enforcement. Some technological advances (e.g., social media) have arguably provided a wealth of information for investigators and analysts. Others have presented unique hurdles. While some feel that law enforcement now has more information available to them than ever before, others contend that law enforcement is "going dark" as some of their investigative capabilities are outpaced by the speed of technological change. These hurdles for law enforcement include strong, end-to-end (or what law enforcement has sometimes called "warrant-proof") encryption; provider limits on data retention; bounds on companies' technological capabilities to provide specific data points to law enforcement; tools facilitating anonymity online; and a landscape of mixed wireless, cellular, and other networks through which individuals and information are constantly passing. As such, law enforcement may have trouble accessing certain information they otherwise may be authorized to obtain. The tension between law enforcement capabilities and technological change—including sometimes competing pressures for technology companies to provide data to law enforcement as well as to secure customer privacy—has received congressional attention for several decades. For instance, in the 1990s the "crypto wars" pitted the government against technology companies, and this strain was underscored by proposals to build in vulnerabilities, or "back doors," to certain encrypted communications devices as well as to restrict the export of strong encryption code. In addition, Congress passed the Communications Assistance for Law Enforcement Act (CALEA; P.L. 103-414 ) in 1994 to help law enforcement maintain their ability to execute authorized electronic surveillance as telecommunications providers turned to digital and wireless technology. More recently, there have been questions about whether CALEA should be amended to apply to a broader range of entities that provide communications services. The "going dark" debate originally focused on data in motion, or law enforcement's ability to intercept real-time communications. However, more recent technology changes have impacted law enforcement's capacity to access not only communications but stored content, or data at rest. Some officials have urged the technology community to develop a means to assist law enforcement in accessing certain data. At the same time, law enforcement entities have taken steps to bolster their technology capabilities. In addition, policymakers have been evaluating whether legislation may be an appropriate response to current law enforcement concerns involving access to communications and data. For Further Information Kristin Finklea, Specialist in Domestic Security CRS Report R44481, Encryption and the "Going Dark" Debate , by Kristin Finklea CRS Report R44827, Law Enforcement Using and Disclosing Technology Vulnerabilities , by Kristin Finklea The Networking and Information Technology Research and Development (NITRD) Program is the United States' primary source of federally-funded information technology (IT) research and development in the fields of computing, networking, and software. The program evolved from the High-Performance Computing and Communications (HPCC) Program, which originated with the HPCC Program Act of 1991 ( P.L. 102-194 ); it coordinates the activities of multiple agencies conducting multi-disciplinary, multi-technology, and multi-sector R&D needs. The 21 NITRD member agencies invest approximately $5 billion annually in basic and applied R&D programs. Proponents of federal support of IT R&D assert that it has produced positive outcomes for the country and played a crucial role in supporting long-term research into fundamental aspects of computing. Such fundamentals may provide broad practical benefits, but generally take years to realize. Additionally, the unanticipated results of research are often as important as the anticipated results. Another aspect of government-funded IT research is that it often leads to open standards, something that many perceive as beneficial, encouraging deployment and further investment. Industry, on the other hand, is more inclined to invest in proprietary products and will diverge from a common standard when there is a potential competitive or financial advantage to do so. Supporters believe that the outcomes achieved through the various funding programs create a synergistic environment in which both fundamental and application-driven research are conducted, benefitting government, industry, academia, and the public. Critics, however, assert that the government, through its funding mechanisms, may be picking "winners and losers" in technological development, a role more properly residing with the market. For example, the size of the NITRD Program could encourage industry to follow the government's lead on research directions rather than selecting those directions itself. The NITRD Program is funded through appropriations to its individual agencies; therefore, it will be part of the continuing federal budget debate in the 116 th Congress. For Further Information Patricia Moloney Figliola, Specialist in Internet and Telecommunications Policy CRS Report RL33586, The Federal Networking and Information Technology Research and Development Program: Background, Funding, and Activities , by Patricia Moloney Figliola Quantum information science (QIS), which combines elements of mathematics, computer science, engineering, and physical sciences, has the potential to provide capabilities far beyond what is possible with the most advanced technologies available today. Although much of the press coverage of QIS has been devoted to quantum computing, there is more to QIS. Many experts divide QIS technologies into three application areas: sensing and metrology, communications, and computing and simulation. The government's interest in QIS dates back at least to the mid-1990s, when the National Institute of Standards and Technology and the DOD held their first QIS workshops. QIS is first mentioned in the FY2008 budget of what is now the Networking and Information Technology Research and Development Program and has been a component of the program since then. Today, QIS is a component of the National Strategic Computing Initiative (Executive Order 13702), which was established in 2015. More recently, in September 2018, the National Science and Technology Council (NSTC) issued the National Strategic Overview for Quantum Information Science. The policy opportunities identified in this strategic overview include— choosing a science-first approach to QIS, creating a "quantum-smart" workforce, deepening engagement with the quantum industry, providing critical infrastructure, maintaining national security and economic growth, and advancing international cooperation. The United States is not alone in its increasing investment in QIS R&D. QIS research is also being pursued at major research centers worldwide, with China and the European Union having the largest foreign QIS programs. Further, even without explicit QIS initiatives, many other countries, including Russia, Germany, and Austria, are making strides in QIS R&D. In a July 2016 report, the NSTC stated that creating a cohesive and effective U.S. QIS R&D policy would require a collaborative effort in five policy areas: institutional boundaries; education and workforce training; technology and knowledge transfer; materials and fabrication; and the level and stability of funding. These areas continue to be salient in 2019 and may provide context for developing legislation in the 116 th Congress. For Further Information Patricia Moloney Figliola, Specialist in Internet and Telecommunications Policy CRS Report R45409, Quantum Information Science: Applications, Global Research and Development, and Policy Considerations , by Patricia Moloney Figliola Some of the policy issues in the physical and material sciences that the 116 th Congress may address include funding and oversight of the National Science Foundation and the multiagency initiative supporting research and development in the emerging field of nanotechnology. The National Science Foundation supports basic research and education in the nonmedical sciences and engineering and is a primary source of federal support for U.S. university research. It is also responsible for the primary share of the federal STEM education effort, both by number of programs and total investment. Enacted funding for NSF in FY2018 was $7.77 billion. Congress has a long-standing interest in NSF's funding levels and the prioritization and direction of such funding. At various points in NSF's history, some policymakers have pursued a policy of authorizing large increases in the NSF budget over a defined period of time (e.g., a 100% increase over seven years, sometimes referred to as a "doubling path policy"). Actual appropriations have rarely reached authorized levels, however, and growth in NSF's budget has slowed in recent years. Advocates of large funding increases assert that steep and fast increases in NSF funding are necessary to ensure U.S. competitiveness. Other analysts argue that steady, reliable funding increases over longer periods of time would be less disruptive to the U.S. scientific and technological enterprise. Alternatively, some policymakers seek no additional increases in NSF funding in light of the federal deficit and spending caps. Additionally, some policymakers prefer to direct federal funding to research with a more applied or mission-oriented focus than that which is typically funded at NSF. In terms of congressional direction of funding, analysts and legislators have periodically debated questions about prioritizing NSF funding for the physical sciences and engineering over funding for the social, behavioral, and economic sciences, as well as expanding support for multidisciplinary funding. Policy issues that the 116 th Congress may continue to address include the selection, funding, and management of large-scale construction projects, scientific instruments, and facilities, including the use of management fees; increased support for mid-scale research infrastructure; research reproducibility and replicability; and the effectiveness and costs of NSF's use of nonfederal personnel—through the Intergovernmental Personnel Act program—often called "rotators." Other lasting federal policy issues for the NSF focus on the balance between scientific independence and accountability to taxpayers; the geographic distribution of grants; NSF's role in broadening participation in STEM fields; support for various STEM education programs; and the production of data about the U.S. scientific and technological enterprise. For Further Information Laurie A. Harris, Analyst in Science and Technology Policy CRS Report R45009, The National Science Foundation: FY2018 Appropriations and Funding History , by Laurie A. Harris Nanoscale science, engineering, and technology—commonly referred to collectively as nanotechnology—is believed by many to offer extraordinary economic and societal benefits. Nanotechnology R&D is directed toward the understanding and control of matter at dimensions of roughly 1 to 100 nanometers (a nanometer is one-billionth of a meter). At this size, the properties of matter can differ in fundamental and potentially useful ways from the properties of individual atoms and molecules and of bulk matter. Many current applications of nanotechnology are evolutionary in nature, offering incremental improvements in existing products and generally modest economic and societal benefits. For example, nanotechnology is being used in automobile bumpers, cargo beds, and step-assists to reduce weight, increase resistance to dents and scratches, and eliminate rust; in clothes to increase stain- and wrinkle-resistance; and in sporting goods to improve performance. Other nanotechnology innovations play a central role in current applications with substantial economic value. For example, nanotechnology is a fundamental enabling technology in nearly all semiconductors and is key to improvements in chip speed, size, weight, and energy use. Similarly, nanotechnology has substantially increased the storage density of nonvolatile flash memory and computer hard drives. In the longer term, some believe that nanotechnology may deliver revolutionary advances with profound economic and societal implications, such as detection and treatment of cancer and other diseases; clean, inexpensive, renewable power through energy transformation, storage, and transmission technologies; affordable, scalable, and portable water filtration systems; self-healing materials; and high-density memory devices. The development of this emerging field has been fostered by sustained public investments in nanotechnology R&D. In 2001, President Clinton launched the multi-agency National Nanotechnology Initiative (NNI) to accelerate and focus nanotechnology R&D to achieve scientific breakthroughs and to enable the development of new materials, tools, and products. More than 60 nations subsequently established programs similar to the NNI. Cumulatively through FY2018, Congress appropriated approximately $24.0 billion for nanotechnology R&D; for FY2019, President Trump requested $1.4 billion in funding. In 2003, Congress enacted the 21 st Century Nanotechnology Research and Development Act ( P.L. 108-153 ), providing a legislative foundation for some of the activities of the NNI, establishing programs, assigning agency responsibilities, and setting authorization levels through FY2008. Legislation was introduced in the 114 th and 115 th Congress to amend and reauthorize the act though none has been enacted into law. The 116 th Congress may continue to direct its attention primarily to three topics that may affect the realization of nanotechnology's hoped-for potential: R&D funding; U.S. competitiveness; and environmental, health, and safety concerns. For Further Information John F. Sargent Jr., Specialist in Science and Technology Policy CRS Report RL34511, Nanotechnology: A Policy Primer , by John F. Sargent Jr. CRS Report RL34401, The National Nanotechnology Initiative: Overview, Reauthorization, and Appropriations Issues , by John F. Sargent Jr. CRS Report RL34614, Nanotechnology and Environmental, Health, and Safety: Issues for Consideration , by John F. Sargent Jr. Congress has historically had a strong interest in space policy issues. Space topics that may come before the 116 th Congress include the funding and oversight of the National Aeronautics and Space Administration (NASA) and issues related to the commercialization of space and to Earth-observing satellites. Spaceflight has attracted strong congressional interest since the establishment of NASA in 1958. Issues include the goals and strategy of NASA's human spaceflight program, the impact of constrained budgets on NASA's other missions, and the future of NASA's Earth Science program. The 116 th Congress may address these and other issues through NASA reauthorization legislation. With the end of the space shuttle program in July 2011, the United States lost the capability to launch astronauts into space. Since that time, NASA has relied on Russian spacecraft for crew transport to the International Space Station (ISS). For ISS cargo transport, NASA-contracted U.S. commercial flights have been delivering payloads of supplies and equipment since October 2012. As directed by the NASA Authorization Act of 2010 ( P.L. 111-267 ), NASA is pursuing a two-track strategy for human spaceflight. First, for transport to low Earth orbit, including the ISS, NASA is supporting commercial development of a crew transport capability like the commercial cargo capability achieved in 2012. Commercial crew transportation services are expected to become operational in late 2019 or 2020. Second, for human exploration beyond Earth orbit, NASA is developing a new crew capsule called Orion and a new heavy-lift rocket called the Space Launch System (SLS). The first crewed test flight of Orion and the SLS is scheduled for 2023. Most details of the subsequent exploration missions of Orion and the SLS remain to be determined. In February 2018, NASA announced plans for a Lunar Orbital Platform–Gateway (LOP-G) in lunar orbit, to be accessed via Orion and the SLS, that would serve as a platform for deep-space human exploration. Rapid developments in the commercial space sector may change the relationship between NASA and industry. For example, SpaceX has announced plans for commercial flights carrying passengers around the Moon and back as well as, in the longer term, to Mars. Some observers see this sort of development as potentially competing with NASA's human spaceflight plans. More broadly, the emergence of new commercial capabilities in space may present NASA with new opportunities for public-private partnerships or may shift its R&D priorities. For example, NASA has announced plans to end direct funding for the International Space Station by 2025, instead relying on a combination of public-private partnerships and commercial service contracts. The 2010 authorization act authorized funding increases for NASA that were not subsequently appropriated. In considering reauthorization, the 116 th Congress may examine whether reduced budget expectations require corresponding changes to planned programs. One common concern is that the cost of planned human spaceflight activities may mean less funding for other NASA missions, such as unmanned science satellites, aeronautics research, and space technology development. NASA's Earth Science program, in which climate research is a major focus, is of particular congressional interest. Some in Congress have argued that other NASA activities should have higher priority or that some or all of NASA's Earth Science responsibilities should be transferred to other agencies. Supporters counter that space-based Earth observations are an integral part of NASA's science mission. For Further Information Daniel Morgan, Specialist in Science and Technology Policy CRS Report R43419, NASA Appropriations and Authorizations: A Fact Sheet , by Daniel Morgan CRS In Focus IF10828, The International Space Station (ISS) and the Administration's Proposal to End Direct NASA Funding by 2025 , by Daniel Morgan CRS In Focus IF10940, The James Webb Space Telescope , by Daniel Morgan Since the earliest days of spaceflight, U.S. companies have been involved as contractors to government agencies. Increasingly, though, space is becoming commercial. A majority of U.S. satellites are now commercially owned, providing commercial services, and launched by commercial launch providers. Congressional and public interest in space is also becoming more focused on commercial activities, such as companies developing reusable rockets or collecting business data with fleets of small Earth-imaging satellites. Some observers have identified a distinct "new space" sector of relatively new companies focused on private spaceflight at low cost. One factor driving this trend is NASA's reliance on commercial providers for access to the ISS, but "new space" companies are also focused on other markets. These include the launch of national security satellites for the Department of Defense, the launch of commercial satellites for U.S. and foreign companies, the provision of commercial services such as Earth imaging and satellite communications, and even space tourism. Multiple federal agencies regulate the commercial space industry, based on statutory authorities that were enacted separately and have evolved over time. The Federal Aviation Administration licenses commercial launch and reentry vehicles (i.e., rockets and spaceplanes) as well as commercial spaceports. The National Oceanic and Atmospheric Administration (NOAA) licenses commercial Earth remote sensing satellites. The Federal Communications Commission licenses commercial satellite communications. The Departments of Commerce and State license exports of space technology. The 115 th Congress considered, but did not enact, legislation to simplify and reform this regulatory framework. In addition, in May 2018, the Administration called for changes to the regulation of commercial space in Space Policy Directive–2, Streamlining Regulations on Commercial Use of Space . The 116 th Congress may continue this focus on regulatory reforms. How the federal government makes use of commercial space capabilities is also evolving. NASA used to own and operate the space shuttles that contractors built for it, but since 2012 it has contracted with commercial service providers to deliver cargo into orbit using their own spacecraft. DOD has its own satellite communications capabilities, but it also procures communications bandwidth from commercial satellite companies. Agencies are considering a host of new opportunities, including acquisition of weather data from commercial satellites, acquisition of science data from commercial lunar landers, and expanded commercial utilization of the ISS. The 116 th Congress may address these developments primarily through oversight of agency programs and decisions on agency budgets. For More Information Daniel Morgan, Specialist in Science and Technology Policy CRS Report R45416, Commercial Space: Federal Regulation, Oversight, and Utilization , by Daniel Morgan CRS Report R44708, Commercial Space Industry Launches a New Phase , by Bill Canis The constellation of Earth-observing satellites launched and operated by the U.S. government performs a wide range of observational and data collecting activities. These activities include measuring the change in mass of polar ice sheets, wind speeds over the oceans, land cover change, as well as the more familiar daily measurements of key atmospheric parameters that enable modern weather forecasts and storm prediction. Satellite observations of the Earth's oceans and land surface help with short-term seasonal forecasts of El Niño and La Niña conditions, which are valuable to U.S. agriculture and commodity interests; identification of the location and size of wildfires, which can assist firefighting crews and mitigation activities; as well as long-term observational data of the global climate, which are used in predictive models that help assess the degree and magnitude of current and future climate change. Congress continues to be interested in the performance of NASA, NOAA, and the U.S. Geological Survey in building and operating U.S. Earth-observing satellites. Congress is particularly interested in the agencies meeting budgets and time schedules so that critical space-based observations are not missed due to delays and cost overruns. Concerns have been raised in the past by some in Congress about the possibility of a "data gap" in the polar-orbiting weather satellite coverage. The successful launch of the first Joint Polar Satellite System satellite JPSS-1 (now NOAA-20) on November 18, 2017, has alleviated those concerns for the near-term. Congress provided full funding, $776 million for the second polar-orbiting satellite, JPSS-2, in the FY2018 enacted appropriations. On November 19, 2016, the Geostationary Operational Environmental Satellite-R (GOES-R) weather satellite launched and was placed into orbit. Renamed GOES-16, it is an advanced weather satellite with sensors that should help improve hurricane tracking and intensity forecasts, prediction and warning of severe weather events, and rainfall estimates that will lead to better flood warnings. GOES-16 also carries the first operational lightning mapper in geostationary orbit, and will better monitor space weather—perturbations to the Earth's magnetic field caused by intense bursts of energy from the sun. On March 1, 2017, GOES-S successfully launched carrying the same suite of instruments as its predecessor. The satellite is in its final stage of calibration before transitioning to operation status in January 2019. Renamed GOES-17, the satellite experienced a problem with one of its key imaging instruments after launch, the Advanced Baseline Imager (ABI), which impairs its functionality. NASA has stated that despite the ABI problem, GOES-17 will provide more and better data than currently available. Both satellites represent the first two in a series of four Earth-orbiting weather satellites planned by NOAA through 2036. The 116 th Congress may continue to scrutinize budget and time schedules for polar-orbiting and geostationary satellites, as well as consider how the private sector could provide Earth-observing satellite data to supplement the current NASA NOAA, and USGS-operated satellite systems. For Further Information Peter Folger, Specialist in Energy and Natural Resources Policy CRS Report R44335, Minding the Data Gap: NOAA's Polar-Orbiting Weather Satellites and Strategies for Data Continuity , by Peter Folger
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Science and technology (S&T) have a pervasive influence over a wide range of issues confronting the nation. Public and private research and development spur scientific and technological advancement. Such advances can drive economic growth, help address national priorities, and improve health and quality of life. The ubiquity and constantly changing nature of science and technology frequently create public policy issues of congressional interest. The federal government supports scientific and technological advancement directly by funding and performing research and development and indirectly by creating and maintaining policies that encourage private sector efforts. Additionally, the federal government regulates many aspects of S&T activities. This report briefly outlines a key set of science and technology policy issues that may come before the 116th Congress. This set is not exhaustive, however. Given the rapid pace of S&T advancement and its importance in many diverse public policy contexts, other S&T-related issues not discussed in this report may come before the 116th Congress. The selected issues are grouped into 10 categories Overarching S&T Policy Issues, Agriculture, Biomedical Research and Development, Climate Change Science and Water, Defense, Energy, Homeland Security, Information Technology, Physical and Material Sciences, and Space. Each of these categories includes concise analysis of multiple policy issues. The material presented in this report should be viewed as illustrative rather than comprehensive. Each section identifies CRS reports, when available, and the appropriate CRS experts to contact for further information and analysis.
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President Jimmy Morales, then a relative political newcomer, ran in 2015 on a platform of governing transparently and continuing to root out corruption. He is now being investigated for corruption himself. During the election campaign, as mass protests calling for then-President Pérez Molina's resignation and an end to corruption and impunity grew, so did Morales's popular appeal. Morales framed his lack of political experience as an asset. His campaign slogan was "Neither corrupt nor a thief." He won Guatemala's 2015 presidential election by a landslide with 67% of the vote. Morales initially supported the International Commission against Impunity in Guatemala (CICIG), which Guatemala asked the United Nations (U.N.) to form in 2007 to help the government combat corruption, human rights violations, and other crimes. After he became a target of investigations, he said he would not renew their mandate, which ends in September 2019. The President tried to terminate CICIG early unilaterally. Many observers are concerned that Morales's efforts could undermine ongoing investigations by the Guatemalan attorney general's office and judicial proceedings, make political reform more difficult, and heighten instability in Guatemala. The Guatemalan Congress is also moving legislation that, if passed, would reverse progress made in holding government officials and others accountable for corruption and crimes against humanity. Guatemala faces many political and social challenges in addition to widespread corruption and impunity. Guatemala has some of the highest levels of violence, inequality, and poverty in the region, as well as the largest population. Indigenous people, about half of the population, experience higher rates of economic and social marginalization than nonindigenous citizens, and have for centuries. Almost half of the country's children are chronically malnourished. Guatemala's homicide rate decreased to 26.1 per 100,000 in 2017, which nonetheless remains one of the highest rates in the region. Guatemala has a long history of internal conflict and violence, including a 36-year civil war (1960-1996). For most of that time, the Guatemalan military held power and violently repressed and violated the human rights of its citizens, especially its majority indigenous population. Reports estimate that more than 200,000 people were killed or disappeared during the conflict, with the state bearing responsibility for 93% of human rights violations. More than 83% of the victims were identified as Mayan. In 1986, Guatemala established a civilian democratic government, but military repression and human rights violations continued. Peace accords signed in 1996 ended the conflict. The United States maintained close relations with most Guatemalan governments, including the military governments, before, during, and after the civil war. Since the late 1980s, Guatemala has sought to consolidate its transition from military and autocratic rule to a democracy. Democratically elected civilian governments have governed for over 30 years, but democratic institutions remain fragile due to high levels of corruption, impunity, drug trafficking, and inequitable distribution of resources. Although state institutions have investigated and arrested high-level officials, including a sitting president, for corruption, high levels of impunity in many cases continue due to intimidation of judicial officials, deliberate delays in judicial proceedings, and widespread corruption. The Supreme Electoral Tribunal (TSE) investigated multiple political parties for violations of election campaign finance laws in 2014 and 2015, as part of its auditing process. As a result, the TSE dissolved two major parties, the Partido Patriota—former President Pérez Molina's party—and LIDER. These investigations are ongoing and may affect the 2019 elections. President Morales presented his General Government Policy for 2016-2020 in February 2016. The five pillars of this plan are zero tolerance for corruption, and modernization of the state; improvement in food security and nutrition; improvement in overall health and quality education; promotion of micro, small, and medium enterprises, and tourism and housing construction; and protection of the environment and natural resources. Halfway into his four-year term (2016-2020), however, Morales was being investigated for corruption and criticized for seemingly backing off his pledge of zero tolerance for corruption. In 2017, the president's brother and son were arrested on corruption charges. In August and September 2017, Guatemala's attorney general and CICIG announced they were seeking to lift the president's immunity from prosecution as they investigated alleged violations of campaign finance laws and bonuses paid to him by the military. Shortly thereafter, the president tried unsuccessfully to expel the head of CICIG, Commissioner Ivan Velásquez. In 2018, his third year in office, he prevented Velásquez from reentering the country. In January 2019 Morales tried unilaterally to terminate CICIG's mandate. The Constitutional Court ruled that he lacks the authority to do so. (See " Efforts to Combat Impunity and Corruption ," below.) Various observers see Morales's moves against CICIG as part of an effort to impede anticorruption investigations against him, his relatives and associates. Morales will lose his immunity from prosecution when his term ends in January 2020. A recent opinion poll found that more than 72% of the population has little or no trust in the police, and about 65% has little to no trust in the government. Conversely, 83% of the population said they supported CICIG and the Public Ministry—which is headed by the attorney general—making them Guatemala's most trusted institutions. So far, the judicial process, protests, and mass mobilizations in the wake of high-level government corruption scandals have remained peaceful. Nonetheless, tensions have heightened as President Morales's efforts to impede CICIG have escalated, and the Guatemalan Congress has tried to reduce criminal penalties for corruption and human rights violations. In January 2019, thousands of Guatemalans joined renewed public protests supporting CICIG and calling for the resignations of President Morales and members of Congress seen as protecting corrupt practices. (See " Tension ," below.) Continued impunity, coupled with the state's failure to provide basic public services to large parts of the population and limited advances in reducing Guatemala's high poverty levels, could prolong tensions. Military-criminal enterprises and other powerful interests that have benefited from corruption and the status quo have fought against anticorruption and anti-impunity work since it began. They have threatened public prosecutors, the attorney general, and members of the judiciary. The promote legislation that would protect them from prosecution. Continued prosecution of corruption could provoke increasingly violent responses from those whose wealth or power are threatened. Powerful interests also use more subtle methods to try to weaken CICIG, the Public Ministry, and groups pushing for political reform. These include tactics such as discrediting the reputations of officials, activists, and their organizations; delays or cuts in the judicial system's budget; spurious legal actions that delay trials and drain fiscal and human resources; and attempts to change CICIG's mandate or terms. A 2016 International Commission of Jurists report maintains that the Guatemalan state has responded passively to defamation campaigns and attacks on judicial independence. The report suggests that criminal allegations are fabricated against judges, community leaders, human rights defenders, and others to demobilize their anticorruption activities and silence them. Since mid-2017, those opposed to anticorruption efforts have escalated many of these tactics. Guatemala is scheduled to hold national elections for president, the entire 158-seat Congress, 340 mayors, and other local posts on June 16, 2019. President Morales will not be running for reelection, since the Guatemalan constitution limits presidents to one term. If no presidential candidate wins the first round with more than 50% of the vote, the top two candidates will compete in a second round on August 11. Only a few of Guatemala's 27 parties have named a presidential candidate so far; a final list is supposed to be published on March 17. As in the last elections, corruption is a major theme for voters this year. In response to public outcry over past illegal campaign financing and other electoral crimes, Guatemala adopted electoral law reforms in 2016. Eleven of the 27 parties face charges of illicit or unreported campaign financing, and several candidates face judicial proceedings. Registered candidates have immunity from prosecution. Former Attorney General Thelma Aldana (2014-2018) is the presidential candidate for the new Seed Movement party. Aldana has been internationally recognized for her anticorruption and judicial reform work. She, along with CICIG Commissioner Ivan Velasquez, was awarded the 2018 Right Livelihood Award, known as the "Alternative Nobel Prize," for their "innovative work in exposing abuse of power and prosecuting corruption, thus rebuilding people's trust in public institutions." The U.S. Departme nt of State awarded her its International Women of Courage Award in 2016. Aldana has reportedly said she is on the right wing politically, although more recently indicated that she would be interested in an "inclusive platform that was open to people from the left and the right, to women, to immigrants, to young people, to indigenous people, to the private sector." The day that Aldana announced her candidacy, a Guatemalan judge ordered her arrest on charges including embezzlement. Aldana has denied wrongdoing, and said that many people in Guatemala are afraid of her continuing fight against corruption. Sandra Torres, a 2015 presidential candidate and former first lady, is again running for president with the National Unity of Hope (UNE) party. Public prosecutors sought to lift Torres's immunity as a presidential candidate on February 6, over $2.5 million in illicit campaign financing in 2015. Torres said, without offering evidence, that the request was a move to benefit Aldana's campaign. As mentioned above, the TSE has been investigating illegal campaign financing of the 2015 election process since 2014, and several parties have been dissolved as a result of illegal activities. Zury Rios, whose father was the late Guatemalan military dictator Efrain Rios Montt, intends to run for president. Officials initially said she would not be allowed to run, and then a legal judgment ruled in her favor. Some observers have expressed concern that President Morales's efforts to hinder CICIG before the elections could strengthen parties involved in corruption. CICIG helps Guatemalan institutions enforce campaign finance laws. Weakening these efforts could facilitate continued financing of politicians by drug cartels and other criminal organizations. President Morales's administration achieved a few significant reforms in the first year and a half. For example, the administration developed tax reform policies covering tax collection, the tax authority administration, and the customs office structure. Since Morales and some of his inner circle became the targets of investigations, however, he has tried to terminate CICIG and fired some of his more reformist Cabinet ministers and other officials who worked closely with CICIG and the attorney general's office, replacing them with closer allies. This has raised concerns both domestically and internationally that Morales is trying to protect himself and others from corruption charges and appears to be reversing reformist policies. The tax administration (SAT), under the leadership of Juan Francisco Solórzano for the first two years of the Morales administration, used judicial measures and intervention to increase recovery of unpaid taxes and substantially increased tax collection. Solórzano, a former head of the criminal investigation unit at the attorney general's office, had the endorsement of CICIG as well as the Inter-American Development Bank, World Bank, and International Monetary Fund. Under his leadership, the SAT collected $297 million in recovered taxes in 2016 compared to $5 million in 2015. Following austerity measures in 2016 that limited government spending and decreased the deficit, the Guatemalan Congress passed an expansionary budget for 2017. This was possible in part because of increased state revenues from improved tax collection. Solórzano also played a key role in prominent anticorruption cases. President Morales fired Solórzano in January 2018. The interior ministry, which includes Guatemala's National Civil Police (PNC) force, oversaw a drop in the homicide rate from 27.3 homicides per 100,000 people in 2016 to 26.1 per 100,000 in 2017, the lowest rate in nine years. In February 2018, the Morales administration dismissed the three senior officials of the national police, saying it sought "to generate more positive results to benefit citizen security and the fight against organized crime." A wide range of people, including human rights activists and business leaders, expressed concern at their dismissal. The country's Human Rights Ombudsman, Jordán Rodas, said Guatemalans must be "very alert" to any movement that represents "regression." A prominent trade association known by its acronym CACIF criticized the ouster, saying that outgoing police Director Nery Ramos had reduced crime. The U.S. Embassy in Guatemala congratulated Ramos just a few weeks before his dismissal for his team's work in reducing homicides by 10% compared to January 2017 and for the PNC's "fight against corruption and to improve security throughout Guatemala." In response to the high level of violence over many years, a number of municipalities asked for military troops to augment their ineffective police forces; the Guatemalan government has been using a constitutional clause to have the army "temporarily" support the police in combating crime. Despite efforts to develop a comprehensive, whole-of-government approach to security, the previous five administrations' actions often have been reactive and dependent on the military. The Morales administration announced a two-phase plan to remove the military from citizen security operations by the end of 2017. The new plan includes shuffling military currently involved in citizen security efforts to the country's borders to control land routes used by traffickers and gangs. This would be a significant effort to comply with provisions of the 1996 peace accord calling on the army to focus solely on external threats. The interior minister who initiated the plan, Francisco Rivas, was fired by the president in January 2018. Morales said that the plan would continue, however, and military troops would be withdrawn from the streets by March 2018. Morales's current Minister of the Interior, Enrique Degenhart Asturias, indicated a shift in priorities away from fighting corruption to fighting gangs. One of his first actions was to ask the Guatemalan Congress to designate criminal gangs as "terrorist organizations." On August 30, 2018, the Constitutional Court ruled that the government must justify the appointment of Degenhart, and his Vice Minister, Kamilo Rivera, in response to a complaint that their actions had put the security of Guatemalans at risk. Morales had already faced criticism for not acting forcefully enough on his pledge to crack down on corruption, and for his links to family and friends under investigation, before he tried to expel Commissioner Velásquez. Then-Attorney General Aldana worked closely with the commissioner of CICIG to prosecute high-level corruption and human rights violation cases. Both said that the president initially had not interfered directly in corruption cases—even those involving his family. But both also expressed disappointment that he had not spoken out in support of them and their anticorruption efforts when attacked by antireform elements. They also voiced concern that Morales has publicly portrayed himself and his family as victims of the judicial system, potentially biasing the judicial process. Initially, President Morales's political power was limited as a result of his own inexperience and his party's weak position in the legislature. Morales's small party, the right-wing National Convergence Front-Nation (FCN-Nación), won 11 of 158 seats in the legislature. The Guatemalan Congress elected an opposition member to be president of the unicameral chamber. At the beginning of Morales's term, deputies defected from other parties, bringing the FCN-Nación's seat total to 37. People criticized Morales for allowing the deputies to join his party just before the Congress outlawed the practice. The public prosecutor received complaints alleging that bribery motivated some defections to the FCN-Nación. Morales has since formed an alliance able to pass legislation, however, and consolidated his support in the Congress. In 2017, the legislature twice voted against prosecutors' requests to lift the president's immunity for violations of campaign finance laws and bonuses paid to him by the military, blocking further investigations into the president's role in the scandals. The Congress tried to weaken anticorruption laws with a measure to reduce penalties for illegal campaign financing that the public dubbed the "Pact of the Corrupt." Public outcry was so strong that Congress repealed the law two days after passing it. Nonetheless, the Congress elected a new leadership in February 2018, all of whom, according to the State Department, voted for that pact. In August 2018, the newly appointed Attorney General, Maria Consuelo Porras, submitted a third request to lift the President's immunity. The Guatemalan Congress voted again to maintain the President's immunity from prosecution. Almost half of the deputies in Congress are under investigation or have legal processes pending against them for corruption or other crimes. Morales has also come under fire for two contracts with an Indiana lobbying firm that reportedly has ties to U.S. Vice President Mike Pence. The firm was hired to improve relations between the U.S. and Guatemalan governments outside of normal diplomatic channels. Guatemalan politicians without the authority to act in foreign affairs signed the contracts. Morales denies knowing about the contract, though one was signed on his behalf, and only he and the foreign ministry are authorized to intervene in foreign affairs. Furthermore, observers criticize his reclusiveness with the press: he has removed journalists' access to the presidential palace, and rarely holds press conferences. Morales's administration and the secretariat for Social Welfare came under scrutiny after a fire killed 41 girls in a state-run home in March 2017. The director of the shelter, the minister of Social Welfare, and his deputy were dismissed after the fire. Later that year a judge charged the former minister, his deputy, and five additional people (two police officers with abuse, and three senior members of social and child protection agencies with manslaughter or negligence). Trials against public officials charged in the case began in February 2019. Before the current controversy between Morales and CICIG, human rights and other observers expressed concern that Morales's party's ties to former military officers might put pressure on Morales's support of CICIG, as well as limit his government's investigation of military corruption and human rights violations. Before the new government was sworn in, then-Attorney General Aldana requested legal action against retired army colonel Edgar Ovalle, a key advisor to Morales and a legislator-elect with the FCN-Nación, for alleged civil war-era (1960-1996) human rights violations. After declining the request in 2016, Guatemala's Supreme Court lifted Ovalle's immunity in 2017. Ovalle fled, his whereabouts unknown since March 2017. Over a dozen other military officers have been arrested on similar charges. Many of them support the FCN-Nación and belong to a military veterans' association, Avemilgua, which Ovalle helped found. Avemilgua members created the FCN-Nación in 2004, and testified in court in defense of former dictator Efrain Rios Montt in 2013. Rios Montt, found guilty in 2013 of committing genocide and crimes against humanity during the civil war, had his conviction effectively vacated a short time later. In 2016, a retrial began. In 2017, a judge ordered Rios Montt to stand trial in a different case for the massacre of 201 people between 1982 and 1983 in Dos Erres. Rios Montt died in 2018 before the trials concluded. Morales reportedly said he did not believe genocide had been committed during the war, but that crimes against humanity had. The Defense Ministry said in 2017 that it had been paying President Morales a substantial salary bonus since December 2016 (see " Tension " below). Two former presidents, Alfonso Portillo and Alvaro Colom, reportedly said they received no such bonus. Morales's former defense minister has been arrested in the case. In what many observers see as a step forward in Guatemala's democratic development, the Public Ministry's corruption and human rights abuse investigations in recent years have led to the arrest and trial of high-level government, judicial, and military officials. They have also led to a backlash against those reform efforts, threats against the attorneys general and the head of an international commission, and a political crisis involving current President Jimmy Morales. The Public Ministry, which is headed by the Attorney General, is responsible for public prosecution and law enforcement, and has worked in conjunction with CICIG to strengthen rule of law in Guatemala. President Morales appointed a new attorney general, Maria Consuelo Porras, in May 2018, when Aldana's term expired. Since 2007, CICIG has worked with the Public Ministry and the attorney general's office to reduce the country's rampant criminal impunity by strengthening Guatemala's capacity to investigate and prosecute crime. The government invited CICIG to assist with constitutional reforms and restructuring the judicial system. As a result of collaboration with CICIG, prosecutors have increased conviction rates in murder trials, and targeted corruption and organized crime linked to drug trafficking. The Guatemalan public widely supports CICIG. The United States, other governments, and international institutions have expressed broad support for the work of both the attorney general's office and CICIG over the years, and offered praise for their accomplishments. A 2018 U.S. State Department report highlights these accomplishments: CICIG's hundreds of investigations have resulted in charges against more than 200 current and former government officials—including two recent presidents and several ministers, police chiefs, military officers, and judges. CICIG Commissioner Ivan Velasquez and [then-] AG [Thelma] Aldana forged a strong cooperative alliance to pursue many high-profile corruption cases. CICIG also builds the capacity of prosecutors, judges, and investigators working on high-profile and corruption-related cases. A January 2019 CICIG statement reports that the commission has supported the Public Ministry in more than 100 cases, including against former President Otto Pérez Molina and Vice President Roxana Baldetti, both of whom subsequently resigned. It also has promoted more than 34 legal reforms to strengthen transparency and judicial independence, helped identify over 60 criminal structures, and secured more than 300 convictions. A recent International Crisis Group study estimated that CICIG-backed justice reforms contributed to a 5% average annual decrease in murder rates in Guatemala from 2007 to 2017, in contrast to a 1% average annual increase in the murder rates among other countries in the region. The president-elect of El Salvador has called for a similar commission to be established in his country. Public Ministry investigations, coupled with mass public protests, forced the resignations of the sitting president and vice president in 2015. Then-Attorney General Aldana and CICIG exposed an extensive customs fraud network, now known as the "La Linea" case, at the national tax agency (SAT), leading to the arrest of dozens of people, including the previous and then-directors of the SAT. After the Guatemalan Congress lifted then-President Otto Pérez Molina's immunity so he could be investigated, the attorney general's office indicted him, Vice President Roxana Baldetti, and other officials, who then resigned. The country proceeded lawfully and peacefully to form an interim government, hold scheduled lawful elections, and elect a new president, Jimmy Morales, who took office in January 2016. The related corruption case implicated dozens of high-level government officials and private-sector individuals as well. The Attorney General at the time asserted that the "La Linea" case represented "just a sliver of a sprawling criminal enterprise run by the state," which widely tolerated corruption, leading to impunity and the strengthening of criminal structures within the government. The attorney general and other observers have raised concerns about unnecessary delays in the sentencing process due to appeals and other litigation by defense teams. Pérez Molina remains in prison as his case proceeds. Baldetti was found guilty and is serving a 15½-year sentence in another case of embezzling millions of dollars from a fund for decontaminating a lake. Following the historic "La Linea" case, more former and current high-level officials in the executive branch, the legislature, and the judicial system have been implicated in corruption cases. Three justices of the Supreme Court of Justice (CSJ) had their immunity removed to face charges of corruption and influence trafficking. In late March 2017, authorities arrested various congressional representatives for corruption. According to Transparency International, Guatemala ranked 143 rd out of 180 countries on the organization's Corruption Perceptions Index for 2017, the second-worst score in Central America, behind Nicaragua. Guatemalan police arrested another former president, Alvaro Colom, in February 2018. Colom was arrested along with nine former members of his cabinet, including former Finance Minister Juan Fuentes Knight, who has chaired Oxfam International since 2015. The group faces charges related to a $35 million fraud case involving a new bus system in the capital. Colom is free on bail while under investigation. He denies the charges. Early in his term, President Morales had reached out to policy experts and international donors for advice on fighting corruption. In April 2016, President Morales praised CICIG and formally requested its extension until 2019—which the U.N. granted. Morales said previously that before he left office, he would extend CICIG's term again, until 2021. In August 2017, two days after the attorney general and CICIG announced they were seeking to lift President Morales's immunity from prosecution, however, Morales declared the head of CICIG, Iván Velásquez, persona non grata and ordered him expelled from the country. One of Morales's ministers resigned rather than carry out the order, and the constitutional court—Guatemala's highest court—blocked the order. A Guatemalan congressional committee recommended that the president lose his immunity. Two-thirds of the 158-member legislature, or 105 deputies, are needed to remove an official's immunity. On September 11, 2017, though, the Guatemalan Congress as a whole voted to protect the president from further investigation; only 25 deputies voted to remove his immunity. About 20% of the legislators are also under investigation, with more likely to become so. The legislature fell one vote short of shelving the request permanently, however, so a member of the Congress could reintroduce the question of lifting President Morales's immunity at a later date. On September 13, the Guatemalan Congress passed a "national emergency" bill to reduce penalties for violations of campaign finance laws, and make party accountants—rather than party leaders—responsible for such violations. Public outcry was such that the Congress repealed the bill two days later. Thousands of protesters demanded the resignation not only of Morales, but also of the 107 legislators who voted to weaken anticorruption laws. On September 21, the Guatemalan Congress again defeated a vote to lift the president's immunity. This time, however, the number voting to rescind his immunity had risen to 70. In 2015, public protests contributed to the legislature reversing itself and rescinding the previous president's immunity. Also in September 2017, Guatemala's federal auditor's office said that it was investigating a substantial salary bonus that the Defense Ministry acknowledged paying to the president since December 2016. The monthly bonus increased Morales's salary by more than a third, reportedly making him one of the most highly paid leaders in Latin America. The Attorney General again asked that Morales's immunity be lifted, this time so that her office could investigate his bonus from the army. The Congress again voted against lifting Morales's immunity from prosecution. Morales was losing support within his own government. Several officials were fired or resigned rather than carry out his order to expel Commissioner Velasquez. Three Cabinet ministers resigned, saying that as a result of the political crisis, "spaces of opportunity to carry out our work programmes have rapidly closed down." Initially, Morales persuaded some of those officials to stay, but in January 2018 he fired several of them and replaced them with people he considered stronger allies. A new civic organization was launched in February 2018, the Citizens' Front against Corruption. This group of prominent businesspeople, indigenous leaders, academics, activists, and others expressed public support for both the Attorney General and CICIG Commissioner Velásquez. In 2018 the President reversed on his earlier pledge, and said he would not renew CICIG's term. Morales made the announcement on August 13, flanked by members of the military. In what was widely seen as an act of intimidation, Guatemalan police deployed armored vehicles outside CICIG headquarters and embassies of the United States and other CICIG donors. The United States had provided the vehicles to the Guatemalan police for counternarcotics and border enforcement operations. Some Members of the U.S. Congress demanded Guatemala return the jeeps. Morales then barred CICIG Commissioner Velásquez from reentering the country, in defiance of two Constitutional Court rulings that he lacks the authority to do so. In January 2019, Morales unilaterally tried to end CICIG's mandate, and gave CICIG staff 24 hours to leave the country. The U.N., European Union, advocates for government transparency and human rights, and others expressed concerns over Morales's decision, and thousands of Guatemalan citizens protested the decision and again called on Morales to resign. The Morales administration is trying to impeach members of the Constitutional Court who have ruled in favor of CICIG. CICIG continued its work in compliance with the judicial finding from abroad, and in February most staff returned to Guatemala under contingency safety plans. Velásquez and 11 investigators whose visas were revoked have not returned. The Trump Administration expressed support for CICIG and for Commissioner Velásquez in 2017. In 2018, however, the Administration did not join other donors in doing so again. (See " U.S.-Guatemalan Relations " below.) Despite some differences of opinion over CICIG's efforts, many in Congress are concerned that Morales's efforts to hinder or oust CICIG could undermine objectives of the U.S. Strategy for Engagement in Central America, by undermining efforts to strengthen the rule of law and heightening instability in Guatemala. Some Members support Morales's claims that CICIG has violated Guatemala's sovereignty and maintain that the United States should end its financial support of CICIG. Other Members of Congress are calling for punitive measures against the Morales administration, including suspending foreign aid and imposing Global Magnitsky sanctions on corrupt individuals. As noted above, the Guatemalan Truth Commission found that more than 200,000 people were killed or disappeared during the country's internal conflict. It also concluded that state forces and related paramilitary forces were responsible for 93% of documented human rights violations, and that the vast majority of victims were noncombatant civilians and Mayan. Guatemala was the first country to convict a former leader of genocide, when ex-dictator Rios Montt was found guilty in 2013, during the term of former Attorney General Claudia Paz y Paz. (His conviction was overturned, and he died before a retrial was concluded.) Then-Attorney General Aldana and CICIG made progress in pursuing justice for human rights violations that occurred during the civil war. In March 2016 they tried a historic case known as the "Creompaz case"—the first prosecution for sexual violence committed during the civil war. A Guatemalan high-risk court convicted two former military commanders at the Sepur Zarco military base of murder, sexual violence, sexual and domestic slavery, and enforced disappearances. In March 2017, a judge sent to trial a former military chief of staff and four other high-ranking military officials accused of crimes against humanity, aggravated assault, sexual violence, and forced disappearance. Also in March, the Supreme Court ruled to remove immunity from FCN-Nación deputy Edgar Ovalle for his alleged involvement in the case. As noted previously, Ovalle, a key advisor to President Morales, has since disappeared. Another case dealing with forced disappearances allegedly committed by the Guatemalan military during the civil war took a dramatic turn in March 2016 when a judge seized and made public previously unknown documents detailing information about military counterinsurgency objectives, operations, and campaigns from 1983 to 1990. Since the Peace Accords were signed in 1996, the Guatemalan army had repeatedly denied such documents existed. Observers have expressed concern that Morales has failed to protect human rights. During his election campaign, U.S. embassy officials expressed concern that Morales's campaign team refused to cooperate with certain elements of Guatemalan civil society, particularly human rights advocates working on the protection of children and trafficking victims, and LGBTI (lesbian, gay, bisexual, transgender, intersex) issues. Human Rights Ombudsman Rodas recently said that the Morales administration refused to meet with indigenous leaders to discuss a surge in violence against indigenous people. The Guatemalan Union of Human Rights Defenders has reportedly documented over 200 attacks against human rights defenders in Guatemala in 2018. Twenty-six indigenous people were killed in 2018, many of them activists defending indigenous rights in land and mineral conflicts. Proposed amnesty for crimes against humanity and reforms to penal code . Guatemalan legislators are moving a bill through their Congress that would grant amnesty to perpetrators of crimes against humanity. The bill would amend the National Reconciliation Law, which was passed after the peace accords that ended the civil war. While the original law includes amnesty for some crimes, it does not include amnesty for torture, forced disappearance, and crimes against humanity. The proposed amendment would order the release within 24 hours of people serving prison time for those crimes, including more than 30 former military officials. It would also end all current and future criminal investigations into rights abuses committed during the civil conflict. Passage of the amendment requires three separate votes on the bill; the legislature passed the first vote in January 2019, the second in February. The third vote was suspended on March 13, when some members of the Congress walked out and left the session without a quorum, in the face of protests from human rights advocates, victims' groups, international organizations, and foreign governments. The G13 group of donors to Central America, including the United States, issued a statement saying that providing amnesty "would contravene Guatemala's international obligations; would harm reconciliation efforts; and could seriously erode faith in the rule of law in Guatemala." The Inter-American Court of Human Rights ordered Guatemala to cease discussion of the amnesty bill and to permanently shelve it. Advocates of the bill reportedly dismissed such admonitions as interference in Guatemala's internal affairs. Because the vote was suspended, amnesty proponents can still schedule the bill for a third and final vote, and say they will do so. The legislature is also moving forward amendments to the penal code that could accomplish some of the same objectives of the amnesty. The bill would prevent the imprisonment of people older than 70, and limit pretrial detention to one year. Final passage of the bill, which has already passed two of the three required readings, would free many former military officers convicted of crimes against humanity, and prevent the imprisonment of others. It would also free many people convicted or charged for corruption. Various Guatemalan and international organizations consider judicial reforms necessary to solidify progress against widespread corruption and to strengthen the judicial branch so it can continue consolidating the rule of law in Guatemala. Nonetheless, forces opposed to the reforms have emerged as well. As anticorruption efforts prove successful, the circle of those feeling threatened by investigations broadens, and attacks against CICIG and the judicial system have intensified. The U.N. Office of the High Commissioner for Human Rights (OHCHR) issued a report in March 2017 saying it was "seriously concerned" about threats and attacks against various judicial authorities, including both Aldana and Judge Miguel Angel Galvez. The International Commission of Jurists noted concern about efforts to criminalize lawyers, as well as community leaders, human rights defenders, and public employees, such as Supreme Court justices. Civil society groups and elements of the government have called for further reforms to combat impunity. An April 2017 report from the International Commission of Jurists found that despite tackling historic cases, Guatemalan courts still show signs of irregularity and impunity, such as many judges' failure to condemn litigation that results in delays of trials. Many of the accused in the La Linea case still await sentencing three years after the scandal broke in late 2015, in part because of litigation filed by their own lawyers in what are widely seen as delaying tactics. According to CICIG head Iván Velásquez, the work of CICIG and the attorneys general has resulted in more than 300 people either in prison, facing trial, or being charged. These include high-level officials, such as the former president and vice president, five former Cabinet ministers, three former presidents of Congress and various deputies, two former CSJ magistrates, the former president of the Instituto Guatemalteco de Seguridad Social (IGSS), two former banking superintendents, and a director of the prison service, among others. President Morales spoke before the U.N. General Assembly in September 2017. He pledged to strengthen and support CICIG, but he also said Guatemala was revising the interpretation and application of its agreement with CICIG and no institution should interfere in Guatemala's administration of justice. On the same day, three of Morales's Cabinet members resigned over the political crisis instigated by the president's effort to expel CICIG's commissioner. In February 2018, Morales sent a representative to the U.N. to express his administration's concerns about CICIG. Many in the U.S. Congress expressed concern over President Morales's effort to expel CICIG's commissioner. The House Foreign Affairs Committee chairman at the time issued a statement reading, "The U.S. Congress has spoken with one voice in support of the International Commission against Impunity in Guatemala. We will continue to stand with the Guatemalan people, and especially those in poverty, who are hurt most by corruption." The Guatemalan Congress approved changes concerning judge and magistrate selection and requirements. A recent International Commission of Jurists (ICJ) report concluded that reforming the selection process of judges and separating judicial processes from administrative processes could strengthen Guatemala's judicial system. CICIG and others launched a judicial observatory of criminal justice to analyze judiciary rulings and make recommendations to improve the justice system in other ways as well. The ICJ found that the Guatemalan state has responded passively to defamation campaigns, attacks on judicial independence, and other forces trying to influence judges, prosecutors, and investigators. According to the director of the Guatemalan Institute of Comparative Studies in Criminal Sciences, the groups seeking to stop the reforms are the same elements that launched defamation campaigns on social media against CICIG head Iván Velásquez in early 2017. Shortly after then-President Perez Molina was forced to resign and was arrested on corruption charges in 2015, the Guatemalan legislature took some actions to advance various types of reform. The Guatemalan Congress passed two major reform packages in 2016, for example, that were designed to streamline legislative procedures and make political and electoral system procedures more transparent and equitable. In late 2017, the legislature passed two laws intended to improve the judicial process. One created a Judicial Career Council to relieve the Supreme Court of having to address internal human resources administrative matters, and the other created a National Bank of Genetic Data to be used in judicial processes as well as a Register of Sexual Aggressors. Other of its actions, however, reflect an effort to reverse or stall reform efforts. A lengthy national process produced 60 proposed amendments to the constitution and other laws to promote judicial reform. Congress did not pass an initial package of the reforms in 2016 and has not brought it up again. The most divisive proposed change was a stronger recognition and use of the indigenous justice system. Some observers express concern that the current Congress does not wish to pass the reforms due to their links to people under investigation for corruption, or because they themselves are under investigation. This latter view was reinforced by congressional actions in September 2017 preserving the president's immunity and trying to reduce penalties for violations of campaign finance laws. The bill amending the penal code mentioned in the previous section would free many former government officials and businesspeople facing charges for corruption, including former President Perez Molina. Many of those people were placed in pretrial detention over concerns they would flee the country. Some of their trials have not proceeded, as noted above, in part because of motions filed by their own lawyers, in what are widely viewed as delaying tactics. Guatemala enjoyed relatively stable economic growth in recent decades, and the World Bank named it a top performer in Latin America. As economic growth rates have slowed in more recent years, however, Guatemala has struggled to address its high poverty rates. The country has the largest economy in Central America, with a gross domestic product (GDP) of $75.62 billion and a per-capita income of $4,060 in 2017. The World Bank characterizes Guatemala as a lower-middle-income country, and it ranks 127 th out of 189 on the 2018 Human Development Index. Guatemala's stable growth rates have not been enough to decrease some of the highest levels of economic inequality and poverty in the region. Instead, Guatemala has backtracked. After decreasing the overall poverty rate from 56% to 51% between 2000 and 2006, the rate increased to 59% in 2014, with a rate just over 79% for indigenous people, according to a national survey. Some elements of Guatemalan society and government have tried to bring about equitable development, yet its rural and indigenous populations remain socially and economically marginalized. For rural municipalities, which constitute 44% of the country, almost 8 out of 10 people live in poverty. Demonstrating the difference in economic and social conditions, literacy rates for the nonindigenous population were 88.9% for men and 83.7% for women, but rates decreased to 77.7% for indigenous men and 57.6% for indigenous women 15 years and older. The International Monetary Fund (IMF) concluded that Guatemala lags behind similar countries in terms of development outcomes. While the government has incorporated global Sustainable Development Goals into their national strategy, the IMF reports that the steps necessary to implement those policies "remain largely unaddressed." Furthermore, extreme poverty increased and school enrollment decreased. Nonindigenous children average twice as many years of schooling as indigenous children. To improve social conditions, the World Bank calls for rapid economic growth coupled with increased public investment and pro-poor policies. According to the Economist Intelligence Unit (EIU), Guatemala's economic growth rate is expected to average out at 2.9% in 2019. EIU projects average growth from 2019 to 2023 at 3% but with a dip to 2.4% for 2020. The IMF concludes that slowed economic growth and rapid population growth will keep per-capita income growth too low to reduce poverty. A recent major economic analysis found that economic growth in Guatemala is "largely a result of the strong inflow of family remittances from abroad." Factors that impede economic growth and development include corruption, limited government revenues, weak institutions, and weak transportation and energy infrastructure. A recent economic analysis concluded that corruption has a negative impact on economic activity across Central America. It also concluded that ... anti-corruption measures, such as those launched by the MP and CICIG help create a favorable environment for increasing economic growth in Guatemala because they reduce the avenue for corruption and strengthen the government's effectiveness as a provider of wellbeing. Guatemala's persistent failure to deliver services and improve the quality of education and health care contribute to a low-skilled workforce, which also limits growth. According to the U.N. Educational, Scientific, and Cultural Organization (UNESCO), Guatemalan adults had only 3.6 years of education, on average, in 2005, and "if Guatemala had matched the regional average, it could have more than doubled [emphasis in original] its average annual [economic] growth rate between 2005 and 2010." Current mean years of education is 6.4 for men and for women. Guatemala has the lowest tax-to-GDP ratio in the region at 12.6%, compared to 22.7% for Latin America in 2016. This is due in part to the high rate of employment in the informal economy—the Instituto Nacional de Estadística found that 71% of the population held informal employment in 2018. The percentages were even higher for women, people aged 15-24, and rural and indigenous segments of the population. Another contributing factor includes the business and elite sectors' historical resistance to paying taxes. While the tax administration improved tax collection in 2016-2017 (see " President Jimmy Morales's Administration "), an IMF report on Guatemala cautions that maintaining an improved rate "will require strong and sustained political commitment," which previous efforts have lacked. Tax reforms in 2012, for example, gave the government tools to increase revenues through taxes, but, the same report notes, weak implementation left Guatemala "with virtually unchanged tax-to-GDP ratio [several years] after the reform." The IMF has called for a tax revenue rate increase to at least 15% of GDP in order to address social, security, and infrastructure needs. Land conflicts, especially those involving mining, are contentious, and often violent, in Guatemala and elsewhere throughout the region. Governments often see mines as a source of revenue, potentially for poverty reduction and social programs. Indigenous populations often object to mining under current conditions, however, because they say it violates their ancestral land rights, removes them from and/or damages their source of livelihood, and/or excludes them from the decisionmaking process as to how mine profits should be spent. Guatemala is a signatory to the Indigenous and Tribal Peoples Convention, 1989, also known as the International Labour Organization's (ILO's) Convention 169. The treaty calls on governments to consult indigenous peoples before permitting exploitation of natural resources on their land. According to a recent report by the ILO, the Guatemalan government granted 367 mining licenses between its ratification of the convention in 1996 and 2014, and held only 60 community consultations, all of which had expressed opposition to the projects. The report found that Guatemala's Constitutional Court had found such consultations nonbinding. Guatemala has not developed regulations to govern prior consultations. Ongoing conflicts around land use are likely to continue to delay such projects. Other types of land conflicts and evictions are related to biofuels, dams, ranching, and drug trafficking; these are also frequently violent. Coffee is one of Guatemala's key exports. Yet several obstacles are driving coffee farmers from the market: coffee leaf rust (a deadly fungus), extremely low coffee prices, and a drought, which has triggered increases in food prices. Smallholder farmers, with less than 7.5 acres of land, produce 80% of Central America's coffee. According to a recent NPR report, "Some 70 percent of the farms have been affected [by the rust], and over 1.7 million coffee workers have lost their jobs. Many are leaving the coffee lands to find work elsewhere." Remittances from Guatemalans abroad boost the Guatemalan economy as they constitute over 10% of the GDP, and this percentage is forecast to grow to an average of 13.8% through 2023. Private consumption accounts for 85% of GDP. Traditionally, the United States and Guatemala have had close relations, with friction at times over human rights and civil/military issues. According to the State Department, current U.S. policy objectives in Guatemala include addressing the underlying drivers of illegal migration; supporting the institutionalization of democracy; encouraging respect for human rights and rule of law, and the efficient functioning of CICIG; supporting broad-based economic growth and sustainable development and maintaining mutually beneficial trade and commercial relations, including ensuring that benefits of CAFTA-DR reach all sectors of Guatemalan society; cooperating to fight money laundering, corruption, narcotics trafficking, alien smuggling, trafficking in persons, and other transnational crimes; supporting Central American integration through support for resolution of border and territorial disputes; reinforcing the government's economic development and political reform plan in the Alliance for Prosperity to be self-reliant in addressing drivers of migration and illicit trafficking of goods and people; and improving Guatemala's business climate. In 2017, the Trump Administration expressed support for CICIG and for Commissioner Velásquez. In February, then-Homeland Security Secretary John Kelly met with President Morales and Commissioner Velásquez in Guatemala, and reiterated U.S. support for the Public Ministry's and CICIG's fight against corruption. On the same day, a U.S. court indicted former Guatemalan Vice President Roxana Baldetti and former Interior Minister Mauricio Lopez Bonilla on criminal drug trafficking charges. A Guatemalan court approved a U.S. request for Baldetti's extradition in June 2017, but first she will face prosecution on four charges of corruption in Guatemalan courts. She was convicted and is serving time for one case of embezzlement there. Lopez Bonilla must first face three counts of corruption in Guatemalan courts. The United States arrested former Guatemalan presidential candidate Manuél Baldizón as he entered the country in January 2018. The U.S. Embassy in Guatemala said the United States would "return Mr. Baldizón to Guatemala to face justice"; he faces charges of bribery, conspiracy and money-laundering related to helping the Odebrecht company win construction contracts in Guatemala. The Odebrecht scandal is enveloping politicians across Latin America. Baldizón requested asylum in the United States. U.S. Vice President Mike Pence, then-Secretary of State Rex Tillerson, Secretary of Commerce Wilbur Ross, then-Secretary of Homeland Security Kelly, and Secretary of the Treasury Steven Mnuchin attended meetings with President Morales, as well as his Honduran counterpart and the Salvadoran vice president, in June 2017 at the Conference on Prosperity and Security in Central America in Florida. Pence said that addressing migration to the United States requires strengthening the sending countries' economies, including through foreign assistance. Nonetheless, the Trump Administration has proposed significantly cutting aid to the region and emphasizing security over development in its budget requests. The President has sometimes threatened to cut off aid to Guatemala and the other northern triangle counties. Congress has rejected most of the Administration's proposed cuts. President Morales followed President Trump's lead in December 2017 in announcing his country would move its embassy in Israel to Jerusalem from Tel Aviv. The change has been widely criticized internationally. A nonbinding U.N. General Assembly resolution called for the United States to shelve its recognition of Jerusalem. Trump threatened to cut off aid to countries that supported the resolution. In February 2018, Trump met with Morales in Washington, thanking him for his support on Israel. According to the White House, Trump "also underscored the importance of stopping illegal immigration to the United States from Guatemala and addressing Guatemala's underlying challenges to security and prosperity." In 2018, the Trump Administration did not join other commission donor countries in stating support of CICIG and the Commissioner. Secretary Pompeo spoke with President Morales on September 6, 2018, expressing continued support for "a reformed CICIG," but did not report mentioning either the termination of CICIG's mandate or the barring of Velásquez. In March 2019 the Administration joined other donor countries in speaking out against Guatemala's proposed amnesty bill, and suspended military aid to Guatemala over the misuse of jeeps that had been provided by the Department of Defense. The United States has been providing assistance to Guatemala through regional initiatives: the Central American Regional Security Initiative (CARSI), for combating narcotics trafficking and preventing transnational crime; the President's Emergency Plan for AIDS Relief (PEPFAR); and Food for Peace. Currently, U.S. assistance to Guatemala is guided by the U.S. Strategy for Engagement in Central America. The various programs are integrated for a greater impact in the Western Highlands region of the country, which has the highest rates of poverty, chronic malnutrition, and out-migration in Guatemala, and in high-crime areas. According to the State Department, "The overall objective of U.S. assistance efforts is to create effective structures and organizations sustainable by the Guatemalan government." While some structures, such as the attorney general's office, have greatly improved their effectiveness with U.S. and other support, other institutions remain weak. U.S. bilateral assistance to Guatemala complements CARSI programs and the regional Alliance for Prosperity Plan (see " The Alliance for Prosperity and Other Regional Initiatives " below). Economic Support and Development assistance aims to expand economic opportunities; improve governance, accountability, and transparency; strengthen the juvenile justice system; and improve living conditions in Guatemala. In 2014, the Obama Administration launched the U.S. Strategy for Engagement in Central America (the Strategy), a whole-of-government approach aimed at addressing the root causes of illegal immigration from the region by improving prosperity, regional economic integration, security, and governance. The Strategy complements the Plan of the Alliance for Prosperity (AFP) in the northern triangle proposed by the presidents of El Salvador, Guatemala, and Honduras (see " The Alliance for Prosperity and Other Regional Initiatives " below). Congress has appropriated $2.1 billion for the Strategy for FY2016-FY2018. Congress placed numerous conditions on aid for Guatemala (and El Salvador and Honduras) in each of the foreign aid appropriations measures enacted since FY2016. Through the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), Congress withheld 25% of aid to the three central governments until the Secretary of State certified that conditions relating to limiting irregular migration were met. Congress conditioned another 50% of aid until the governments addressed another 12 concerns, including combating corruption; countering gangs and organized crime; increasing government revenues; supporting programs to reduce poverty and promote equitable growth; and protecting the rights of journalists, political opposition parties, and human rights defenders to operate without interference. The State Department certified that the three northern triangle governments met Congress's conditions in FY2016 and FY2017. The department certified that the three countries had met the first set of conditions in FY2018, but not the second set. The 2019 Consolidated Appropriations Act ( P.L. 116-6 ) maintained the legislative conditions enacted in prior years but combined them into a single certification requirement for 50% of assistance to the central government. The Trump Administration has proposed cutting aid to Guatemala by 36% for FY2020 compared to FY2018 and emphasizing security over development. The budget request for Central America would also reduce aid, and tip the balance toward security and away from traditional development goals—such as good governance, economic growth, and social welfare. The Administration's proposed budget would also eliminate traditional food aid (P.L. 480, Title II), and food aid would be provided only through the International Disaster Assistance account. Some critics are concerned that reducing nonemergency food aid could increase the already high levels of malnutrition and stunting in Guatemala. In addition, a recent study by several major international organizations found that "there is clearly a link between food insecurity and emigration from [Guatemala, El Salvador and Honduras]." The Trump Administration proposes closing down the Inter-American Foundation (IAF), an independent U.S. agency that supports grassroots development throughout Latin America, including in all three northern triangle countries, and merging it into USAID. Many IAF programs in Guatemala are in areas that have high levels of emigration to the United States; these programs aim to improve agricultural and food production; improve the livelihoods of youth, women, and indigenous people, and increase their participation in civil society and community development; and ease the transition of migrants who return to Guatemala. Congress rejected most of the cuts for aid to Central America proposed by the Trump Administration in its previous budgets. The FY2017 Consolidated Appropriations Act ( H.R. 244 , P.L. 115-31 ) provided just under $126 million for Guatemala as part of the $655 million for the continued implementation of the Strategy. The FY2018 Consolidated Appropriations Act ( H.R. 1625 , P.L. 115-141 ) provided less than $120 million for Guatemala as part of the $615 million for the Strategy. The 116 th Congress remains invested in the U.S. Strategy for Engagement in Central America. In February 2019, it passed the FY2019 Consolidated Appropriations Act ( H.J.Res. 31 , P.L. 116-6 ), including $528 million for Central America. The act did not provide specific funding amounts for individual countries, but instead gave the Department of State the authority to allocate funding among the Central American nations. The act's conference report, however, did specify $13 million in Global Health Program aid for Guatemala and $6 million for CICIG. The 116 th Congress has introduced other bills that touch on perennial concerns involving Guatemala, such as immigration, border security, and governance issues. For example, H.Res. 18 , introduced in January, would express the sense of the House that the President should redirect and target foreign assistance provided to Guatemala, El Salvador, and Honduras in a manner that addresses the driving causes of illegal immigration into the United States. S. 716 and H.R. 1630 , introduced in March 2019, would impose targeted sanctions under the Global Magnitsky Human Rights Accountability Act against Guatemalan nationals found responsible for, or complicit in, acts of corruption, laundering money, or violating human rights. In March 2019 the Department of Defense announced it was suspending military aid to Guatemala's Ministry of the Interior, which it said had repeatedly used armored jeeps provided by the United States "in an incorrect way" since August 2018, when they were deployed outside CICIG and donor embassies when Morales announced he was not renewing CICIG's mandate. In response to increased Central American immigration in 2014, the Obama Administration and some Members pressed the northern triangle governments (Guatemala, Honduras, and El Salvador) to invest more heavily in their own development and security. Later that year, the Guatemalan, Salvadoran, and Honduran governments proposed the Plan of the Alliance for Prosperity in the northern triangle with the help of the Inter-American Development Bank. The five-year, $22 billion initiative seeks to (1) stimulate the productive sector to create economic opportunities; (2) develop human capital through improved education, job training, and social protections (health care, nutrition); (3) improve public safety and access to the legal system; and (4) strengthen institutions and improve transparency to increase public trust in the state. Some observers, including some U.S. officials, criticized the initial plan for not focusing on development and poverty-reduction efforts in the poorest regions, from which the highest numbers of people emigrate. The Guatemalan Embassy says that the government has since shifted some of its programs toward those regions. Guatemala, Honduras, and El Salvador launched a trinational task force to address the region's security issues in November 2016. The task force focuses on greater border protection, undertaking operations to dismantle gangs and criminal structures, taking action against human trafficking, cracking down on terrestrial drug trafficking across borders, and stopping the flow of contraband products through the northern triangle. The initiative includes increased information sharing and cooperation among the three countries' governments, as well as law enforcement and investigative agencies. The governments of El Salvador, Guatemala, Honduras, and Mexico agreed on a Comprehensive Development Plan in December 2018, and met in January 2019 to begin its design. They say they intend to be the first region in the world to implement the Global Compact for Migration, which seeks to improve cooperation between countries and regions to facilitate safe, orderly, and regular international migration. Honduran Foreign Minister Maria Dolores Agüero stated that "[r]especting the dignity of migrant persons will be prioritized in line with international law and with special emphasis on a child's best interest and the protection of human rights, regardless of migratory status." Mexican Secretary of Foreign Affairs Marcelo Ebrard said the group wished to demonstrate that addressing the causes of migration is more effective than exclusion and containment measures. Guatemala and the United States have significant trade relations, and are part of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), implemented in 2006. Supporters of CAFTA-DR point to reforms it spurred in transparency, customs administration, intellectual property rights, and government regulation. Critics note that the commercial balance between the two countries previously favored Guatemala, and that Guatemala already had duty-free access under the Caribbean Basin Initiative. Since CAFTA-DR, the balance has shifted in favor of the United States. The U.S. goods trade surplus with Guatemala reached $2.9 billion in 2017, a 16% increase from 2016. From 2005 (pre-CAFTA-DR) to 2017, U.S. exports to Guatemala increased by 143%, whereas Guatemalan exports to the United States increased by only 28% during the same period. President Trump has ordered reviews of U.S. trade agreements. Total U.S.-Guatemala trade in goods and services for 2017 reached $13.5 billion, and U.S. exports to Guatemala amounted to $8.5 billion. Mineral fuels, articles donated for relief, machinery, electrical machinery, and cereals accounted for the majority of U.S. exports. U.S. agricultural exports include corn, soybean meal, wheat, poultry, and cotton. U.S. imports from Guatemala amounted to about $4 billion, with bananas, plantains, knit apparel, woven apparel, coffee, silver, and gold accounting for the majority. Guatemala was the United States' 43 rd -largest trading partner in 2017. The U.S. Labor Department initiated a dispute settlement process alleging that the Guatemalan government violated its CAFTA-DR labor commitments, the first labor rights complaint lodged under a U.S. free trade agreement. In 2011, the U.S. Trade Representative officially requested an arbitral panel. In 2017, the panel concluded that although it agreed that Guatemala had failed to enforce its labor laws effectively in certain cases, the United States had failed to prove that the lack of enforcement negatively affected trade, as required under CAFTA-DR. Some observers say the finding brings into question the effectiveness of labor regulations in U.S. free trade agreements. The Trump Administration may consider renegotiating CAFTA-DR. Guatemala remains a major transit country for illicit drugs, particularly cocaine, trafficked from South America to the United States. Guatemala's porous borders and lack of law enforcement presence in many areas enables minor poppy and opium production, as well as smuggling of precursor chemicals, narcotrafficking, and trafficking of weapons, people, and other contraband. Unlike former President Pérez Molina, current President Morales opposes legalization of illicit drugs. According to the State Department, in 2017 Guatemala recorded record drug seizures and arrested 106 high-profile drug traffickers. In response to increased drug consumption, Guatemala doubled its budget for domestic reduction activities. The United States provides assistance in the areas of vetted units, and a range of training, with the goal of improving the professional capabilities and integrity of Guatemala's police forces and judicial institutions. The 2018 International Narcotics Control Strategy Report (INCSR) highlighted the above improvements in Guatemala's drug control and border security, but noted the following: Corruption levels remain high and public confidence in government institutions is low. Limited budget resources hinder the government's effectiveness. Despite Guatemala's many successes in 2017, the government needs to take additional steps to further build sustainable drug control mechanisms, including support for anti-corruption efforts, accelerated judicial processes, improved interagency cooperation, and adequate financial resources for relevant agencies and government ministries. Corruption within the Guatemalan government has enabled illicit drug trafficking. The U.S. Department of Justice requested the extradition of former Interior Minister Lopez Bonilla, who oversaw the Guatemalan police and prisons under the Perez Molina administration. The Justice Department reportedly said that Lopez Bonilla received money from various drug cartels, including the notorious Los Zetas, in exchange for allowing them to operate freely across Guatemala. A U.S. court also indicted former Guatemalan Vice President Roxana Baldetti on criminal drug trafficking charges. In 2017 a Guatemalan court approved their extradition to the United States, but first they must face prosecution on multiple charges of corruption in Guatemalan courts. Baldetti was convicted and is serving time for one case in Guatemala. The Trump Administration suspended military aid to Guatemala intended for police counternarcotics and border security operations task forces In March 2019. The Department of Defense announced it was ending the "transfer of equipment and training to the task forces" because the Interior Ministry, which oversees the police, had repeatedly misused armored jeeps provided by the United States since August 2018. (See " Tensions over President Morales's Dispute with CICIG " above.) Approximately 1.5 million U.S. residents claim Guatemalan ethnicity, and there were over 950,000 foreign-born persons from Guatemala living in the U.S. in 2017. The Pew Research Center estimates that in 2016, 575,000 of the Guatemalan foreign-born population were unauthorized (about 60%). From the 1970s to 1990s, the civil war fueled some migration. During the 2000s, migration became motivated by socioeconomic opportunities, natural disasters, social violence, and family reunification. Unlike their neighbors in the region, Honduras and El Salvador, Guatemalans have not received Temporary Protected Status (TPS), which offers immigration relief from removal under specific circumstances. Some Guatemalans benefit from the Deferred Action for Child Arrivals (DACA) program, which allows people without lawful immigration status who came to the United States as children and meet certain requirements to request protection from removal for two years, subject to renewal. On September 5, 2017, the Trump Administration announced plans to phase out the DACA program. President Trump later tweeted that if Congress did not pass DACA-like legislation by early 2018, he would "revisit" the issue. As of the date of this report, no such legislation has been passed. Due to federal court orders, DACA renewals are once again being accepted; new applications for DACA, however, are not. From FY2009 to FY2014, the number of unaccompanied migrant children (sometimes referred to as Unaccompanied Alien Children, or UAC) from Guatemala apprehended at the U.S. border rose from 1,115 to 17,057, causing concern among Congress and the executive branch. In the years since, the trend has fluctuated, as the number of unaccompanied Guatemalan minors apprehended at the border decreased to 13,589 in 2015; rose to 18,913 in FY2016; fell to 14,827 in FY2017; and rose to 22,327 in FY2018. To offer a safer alternative to travelling to the United States to request asylum, the U.S. government launched the Central American Minors (CAM) Refugee/Parole program in December 2014. The program allowed children living in El Salvador, Guatemala, and Honduras, whose parents reside legally in the United States, to apply for legal entry to the United States. In July 2016, the U.S. government expanded the CAM program to include additional family members. According to State Department data, 45 Guatemalans left for the United States under refugee status and 31 as parolees between the program's start in December 2014 and September 2017. The Trump Administration ended the CAM program in November 2017. According to the U.N. High Commissioner for Refugees, 62% of unaccompanied migrant children interviewed in 2013 did not mention serious harm as a reason for leaving Guatemala, and 84% cited hopes for family reunification, increased work or study opportunities, or helping their families as motivation for coming to the United States. Two Guatemalan children, 7 and 8 years old, died while in U.S. Customs and Border Protection (CBP) custody in December 2018. CBP Commissioner Kevin McAleenan subsequently issued guidelines for the agency to conduct health inspections on all children in custody, and said he was looking for ways to reduce congestion in government holding facilities, including having nongovernment organizations provide short-term housing for immigrants seeking asylum. McAleenan also said that holding facilities had been built for single adult males, not for family groups with children, and that a different approach was needed. "We need help from Congress. We need to budget for medical care and mental health care for children in our facilities," he said. The U.S. Strategy for Engagement in Central America and the Central American Plan of the Alliance for Prosperity in the northern triangle were developed in large part as a response to the surge in immigration in 2014. They represent efforts to spur development and reduce illegal emigration to the United States. The Trump administration's proposed budgets have emphasized security over development, and substantial cuts in assistance to the region. U.S. laws and policies concerning intercountry adoption are designed to ensure that all children put up for adoption are truly orphans, and have not been bought, kidnapped, or subjected to human trafficking, smuggling, or other illegal activities. Similarly, the goals of the Hague Convention on Protection of Children and Cooperation in Respect of Intercountry Adoption are to ensure transparency in adoptions to prevent human trafficking, child stealing, or child selling, and to eliminate confusion and delays caused by differences among the laws and practices of different countries. Both the United States and Guatemala are party to the convention. Because Guatemala has not yet established regulations and procedures that meet convention standards, the convention has not entered into force there. In FY2007, U.S. citizens adopted 4,726 children from Guatemala, more than from any other country except China (5,453 adoptions). When the convention went into effect in the United States in 2008, adoptions from Guatemala were suspended because Guatemala was not in compliance with the convention's standards. Since then, the only cases of adoptions by U.S. citizens of Guatemalan children that have been permitted are those that were already in-process on December 31, 2007. There were about 3,000 such adoption cases pending at the time. As of 2016, all but 3 cases had been resolved. According to the U.S. State Department, the Guatemalan government's priority is to continue developing its domestic adoption processes, but it is receptive to ongoing discussions. The State Department says it continues efforts to work with Guatemala to establish intercountry adoption procedures.
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Guatemala, the most populous Central American country, with a population of 16.3 million, has been consolidating its transition to democracy since the 1980s. Guatemala has a long history of internal conflict, including a 36-year civil war (1960-1996) during which the Guatemalan military held power and over 200,000 people were killed or disappeared. A democratic constitution was adopted in 1985, and a democratically elected government was inaugurated in 1986. President Jimmy Morales is being investigated for corruption and has survived three efforts to remove his immunity from prosecution. Morales took office in January 2016, having campaigned on an anticorruption platform. The previous president and vice president had resigned and been arrested after being implicated in a large-scale corruption scandal. In what many observers see as a step forward in Guatemala's democratic development, the Public Ministry's corruption and human rights abuse investigations in recent years have led to the arrest and trial of high-level government, judicial, and military officials. The Public Ministry is responsible for public prosecution and law enforcement, and works in conjunction with the United Nations-backed International Commission against Impunity in Guatemala (CICIG) to strengthen rule of law in Guatemala. As their anticorruption efforts prove effective, the circle of those feeling threatened by investigations broadens, and attacks against CICIG and the judicial system it supports broaden and intensify as well. Since Morales and some of his inner circle became the targets of investigations, he has ended CICIG's mandate, tried to terminate it early, and fired some of his more reformist officials. The Guatemalan Congress is moving legislation forward that would give amnesty to perpetrators of crimes against humanity, free some high-profile prisoners held for corruption, and limit the work of nongovernment organizations. Observers within Guatemala and abroad worry that Morales and the Congress are trying to protect themselves and others from corruption and other charges, and threatening the rule of law in doing so. Guatemala continues to face many other challenges, including insecurity, high rates of violence, and increasing rates of poverty and malnourishment. Guatemala remains a major transit country for cocaine and heroin trafficked from South America to the United States. Although Guatemala recorded record drug seizures in 2017, the lack of law enforcement and the collusion between corrupt officials and organized crime in many areas enable trafficking of illicit drugs, precursor chemicals, weapons, people, and other contraband. During Morales's first year, his administration improved tax collection, and the interior ministry reported a 5% drop in homicide rates. Morales has since fired many of the officials responsible for those advances and other reforms. Guatemala has the largest economy in Central America and in recent decades has had relatively stable economic growth. Despite that economic growth, Guatemala's economic inequality and poverty have increased, especially among the rural indigenous population. The Economist Intelligence Unit projects that the country's economic growth rate will likely peak in 2018-2019 at 3.2%, followed by a decrease until 2022. The World Bank calls for rapid economic growth coupled with increased public investment and pro-poor policies to improve social conditions. Traditionally, the United States and Guatemala have had close relations, with friction at times over human rights and civil/military issues. Guatemala and the United States have significant trade and are part of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). Top priorities for U.S. bilateral assistance to Guatemala include improving security, governance, and justice for citizens; improving economic growth and food security; providing access to health services; promoting better educational outcomes; and providing opportunities for out-of-school youth to reduce their desire to migrate. The U.S. Strategy for Engagement in Central America is meant to spur development and reduce illegal emigration to the United States. The Trump Administration has proposed substantially cutting funds for Guatemala, and eliminating traditional food aid and the Inter-American Foundation in its FY2018-FY2020 budget requests. Congress rejected much of those cuts in the reports to and language in the Consolidated Appropriations Acts of 2018 (P.L. 115-141), and 2019 (P.L. 116-6). Tensions between Guatemala and much of the international community have arisen over Guatemalan efforts to oust CICIG and to grant amnesty for human rights violations. The Trump Administration suspended military aid to Guatemala in March 2019 over its misuse of armored vehicles provided by the Department of Defense to combat drug trafficking. Bills introduced in the 116th Congress regarding Guatemala address immigration, order security, corruption and other governance issues, and include H.Res. 18, H.R. 1630, and S. 716.
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With its adoption as part of the Civil Rights Act of 1964, Title VI invested the federal government with a uniquely powerful role in addressing race and national origin discrimination. Like other statutory provisions in the Civil Rights Act, Title VI seeks to end race discrimination among institutions and programs whose doors were otherwise open to the public—especially public schools. But unlike the Civil Rights Act's better known and more heavily litigated provisions, Title VI is concerned specifically with the use of "public funds," designed to ensure that federal dollars not be "spent in any fashion which encourages, entrenches, subsidizes, or results in racial discrimination." And to fulfill that broad mandate, Title VI takes a distinctive approach to policing discrimination by making the promise of nondiscrimination a condition of the federal government's financial support. Title VI consequently prohibits all federally funded programs, activities, and institutions from discriminating based on race, color, or national origin. Although that prohibition accompanies nearly all grants and contracts awarded by the federal government, much of Title VI's doctrine has been shaped by its use in the public schools. That doctrinal story has accordingly centered on one agency in particular: the Office for Civil Rights (OCR) in the U.S. Department of Education (ED). As this report explains, Title VI continues to play a central part in OCR's mission of protecting civil rights on campuses at all educational levels, and in institutions both public and private. This report begins by briefly tracing Title VI to its historical and conceptual roots in the federal spending power, and explains how the early understanding of that power shaped the various legislative proposals that ultimately became Title VI. The report then examines the central doctrinal question behind the statute: what exactly Title VI outlawed by prohibiting "discrimination" among federally funded programs, and what agencies are therefore allowed to do in order to enforce that prohibition. The report then turns to ED's OCR, briefly reviewing how that agency goes about the day-to-day work of enforcing Title VI in schools, and concludes by surveying two recent developments related to Title VI, along with some considerations should Congress wish to revisit this landmark civil rights law. Because this report focuses specifically on how OCR has come to understand and enforce Title VI, it does not directly discuss litigation under the statute, whether filed by a private party or by the U.S. Department of Justice following a referral from OCR, though many of the substantive legal standards overlap. By the time Title VI was being seriously debated in 1964, its basic premise—that federal dollars should not go to support programs or institutions that discriminate based on race—was already familiar. In 1947, nearly a decade before the Supreme Court declared an end to the de jure segregation of the public schools in Brown v. Board of Education , President Truman's Committee on Civil Rights had already sketched out the basic pattern for Title VI, calling for "establishment by act of Congress or executive order" of a federal office to review "the expenditures of all government funds," so that none would go to subsidize discrimination based on race, color, creed, or national origin. Several years later, in 1953, President Eisenhower was also expressing dismay at the "discrimination in expenditure of [federal] funds as among our citizens." And Brown , decided the next year, put even more pressure on the federal government to begin leveraging its funds to combat discrimination —first in the public schools, but possibly also on a wider scale. The early years of the Kennedy Administration saw some of the first steps in that direction. Early on in his tenure, for example, Abraham Ribicoff, then the Secretary of Health, Education, and Welfare (HEW), refused to locate the department's summer teacher-training institutes at "any college or university that declined to operate such institutes without discrimination." In a related decision, HEW later moved to withdraw support from segregated schooling on military bases as well. Those steps led others in the Administration, like then-Attorney General Robert Kennedy, to publicly suggest that the federal funds might be used on a wider scale, "to persuade southern states to alter their racial practices" more generally. These early uses of the federal spending power to redress race discrimination had their limits, however. After leaving HEW for the U.S. Senate, Ribicoff explained during the floor debate over Title VI that, while at HEW, he had frequently "found [his] authority to act was questionable, and in some instances ... limited by the explicit wording of congressional enactments." A number of Kennedy Administration officials evidently shared that view, with some publicly questioning whether the executive branch had authority to withhold money appropriated by Congress or condition disbursement on terms not found in underlying funding authorities. This view "did not go unchallenged," as civil rights leaders made clear during the House hearings on the bill; nor has it received a definitive judicial ruling since. But with the risk of a bruising, possibly fatal, legal challenge looming over unilateral executive action, it "became clear" to Administration officials "that administrative action alone could not solve the entire problem." Congressional action, by contrast, seemed to face far fewer legal constraints. In several earlier decisions the Supreme Court had established that Congress unambiguously had the right under the Spending Clause to condition the receipt of appropriated funds on the terms of its choosing, even in areas traditionally left to the regulation of the states. Congress was therefore free to do by legislation what the executive branch could only questionably have done on its own: make nondiscrimination a condition for receiving federal financial support. The final legislative resolution, reached after a period of protracted debate, was Title VI. The legislation went through a number of significant alterations from the measure originally proposed by the Kennedy Administration, many of which sought to address fears of potential administrative abuse by layering agencies' enforcement power with procedural protections for funding recipients. But the basic pattern suggested by the Committee on Civil Rights some 20 years earlier—making nondiscrimination a condition for federal financial support—remained the same. In its final form, largely unchanged since its adoption, Title VI incorporates five basic features relevant to this report: 1. Nondiscrimination Mandate . Title VI bars any federally funded "program or activity" from discriminating against a "person in the United States" based on his or her "race, color, or national origin." 2. Imp lementing Rules , Regulations , and Orders . All federal funding agencies are "authorized and directed" to promulgate rules, regulations, or orders of general applicability "effectuat[ing]" that nondiscrimination mandate. 3. Approval of Implementing Rules, Regulations, and Orders . Any rule, regulation, or order issued under Title VI was made subject to presidential approval, an authority since delegated to the Attorney General by executive order. 4. Agency Enforcement . To enforce Title VI an agency could resort to either of two measures: (1) the termination or refusal to provide federal financial assistance to an institution or program seeking it; or (2) "any other means authorized by law," now understood to be a lawsuit brought by the Attorney General seeking a recipient's compliance with Title VI. 5. Procedural Requirements Related to Agency Enforcement . Though an agency's withdrawal of federal funds was envisioned as the primary mechanism for enforcing Title VI, that authority was hedged with a range of procedural requirements designed to spur agencies into seeking consensual resolutions with recipients. Each of these statutory features is explained below, including how they have come to be understood since Title VI's passage and the role they play in addressing racial discrimination at school. Title VI revolves around a single sentence-long prohibition, found in Section 601 of the law, providing that "[n]o person in the United States" may be "subjected to discrimination" by a "program or activity" that receives federal financial assistance based on his or her "race, color, or national origin." Plainly that prohibition outlaws racial "discrimination" in all federally funded programs. It does not define, however, the sorts of practices Title VI thereby excludes. And with the legislative history on this point inconclusive at best , the task of providing a workable definition has been left to the agencies charged with enforcing Title VI and, ultimately, to the courts. As explained below, however, with its 2001 decision in Alexander v. Sandoval , the Supreme Court appears to have put the basic interpretive question to rest: Section 601 directly prohibits only intentional discrimination . Despite Title VI's basic ambiguity, the courts have long agreed that, at a minimum, Section 601 bars federally funded programs from intentionally singling out individuals for adverse treatment because of their race. This sort of intentional discrimination is commonly known as disparate or different treatment . And it can be proved in either of two ways: (1) directly, by pointing to a policy or decision that expressly singles out individuals by race, or (2) indirectly, by providing circumstantial evidence that a discriminatory motive was likelier than not responsible for the alleged mistreatment. Perhaps the clearest way a program may discriminate along racial lines is by expressly singling out individuals by race for adverse treatment. Thus, for example, a school that explicitly excludes students from an assembly by race will clearly have discriminated in this intentional sense. And because the "discrimination" involved appears on the face of the policy or decision itself, proving a violation of Title VI becomes that much more straightforward: to prevail, the aggrieved party generally need only establish that the discriminatory policy existed and was used against him. Although still litigated, over the years such facially discriminatory policies and decisions have grown less common—a shift widely attributed to laws like the 1964 Civil Rights Act. As a result, the more usual case today instead involves allegations of racially motivated mistreatment under a policy or decision that, at least on its face, is race-neutral. Thus, for example, an African American student might still plausibly allege that a school official discriminated against him based on his race by disciplining him more severely than his white classmates for substantially the same misconduct, even though neither the discipline policy nor the disciplining official made any mention of his race. In such cases, the " form of the governmental action"—the literal wording of the policy used or the decisionmaker's explanation—is not at issue. What matters is why the individuals alleging mistreatment received the treatment they did; whether, that is, a discriminatory intent shaped the allegedly discriminatory decision. Where the surrounding circumstances suggest that some such racial animus was likelier than not what motivated the adverse treatment, that treatment will amount to intentional discrimination, presumptively violating Title VI. Title VI has long been understood to bar federally funded programs from intentionally discriminating based on race. At least for the first few decades following its adoption, however, there was considerably more debate about whether Section 601 might also forbid policies that, while not purposefully discriminatory, nonetheless had a disparate effect on persons of different races. And in its first case involving Title VI— Lau v. Nichols —the Supreme Court seemed to say exactly that. In its most recent encounter with disparate impact under Title VI, however, in Alexander v Sandoval , the Court squarely rejected Lau 's ruling on that point. Today, as a result, the only discrimination Title VI directly prohibits is intentional . Lau was the Court's first encounter with Title VI, and it set the stage for much of the uncertainty about the statute that has followed. In Lau, non-English-speaking Chinese students had sued San Francisco's school system alleging that its policy of refusing bilingual or remedial English instruction effectively denied them the educational opportunities provided non-Chinese students, in violation of Title VI as well as the Equal Protection Clause of the Fourteenth Amendment. And in an unexpectedly unanimous ruling, the Court agreed—albeit along two different lines of reasoning. Relying "solely" on Section 601, five of the Justices, led by Justice Douglas, concluded that Section 601 barred discrimination "which has [a discriminatory] effect even though no purposeful design is present." In that case the effect was clear: "the Chinese-speaking minority receive[d] fewer benefits than the English-speaking majority" from the city's schools. As recipients of federal educational dollars subject to Title VI, the school system had "contractually" obligated itself to reform its instructional policies to ensure the Chinese-speaking minority the same educational benefits as the English-speaking majority. Lau therefore seemed to imply that Section 601 directly outlawed policies with discriminatory effects , irrespective of their motivating intent—a form of discrimination now commonly known as disparate impact . But the Court also mixed some uncertainty into that message. Immediately after saying that they were "rely[ing] solely on [Section] 601" in siding with the student plaintiffs, the majority in Lau turned to recite a regulation issued by HEW, specifically addressing what recipient school districts had to do under Title VI to ensure students with "linguistic deficiencies" had the same "opportunity to obtain the education generally obtained by other students in the system." That discussion drew a contrasting concurrence from three other Justices, all of whom agreed that the student should prevail under a disparate impact theory, but believed that the proper basis for that theory—and the result in favor of the students—was HEW's regulation implementing Title VI, not Section 601 itself. In all, though, eight Justices in Lau put down a marker in favor of disparate impact under Title VI, five seemingly under Section 601. And so, whatever the vagaries in its rationale, Lau 's basic message seemed clear: Title VI barred not just intentional discrimination, but policies with a disparate impact as well. Only a few years after handing down Lau , in its landmark ruling in Regents of the University of California v. Bakke , the Court appeared to reverse course. Bakke involved a white applicant's challenge to the affirmative action admissions policy then in use at the University of California at Davis's medical school. And like the Chinese students in Lau , Bakke objected to that policy on both constitutional and statutory grounds. To dispose of his challenge the Justices therefore had to confront the question they effectively avoided in Lau : how does Section 601's nondiscrimination mandate relate to the Fourteenth Amendment's Equal Protection Clause? None of the opinions in Bakke commanded a clear majority, but in separate opinions, five of the Justices, separately sifting through the legislative record, arrived at the same answer: Title VI's drafters intended Section 601 to "enact[] constitutional principles," and nothing more. Title VI, in their view, therefore "proscribe[d] only those racial classifications that would violate the Equal Protection Clause" —policies that the Court had already said must involve more than just a racially disparate impact, but a provable discriminatory intent as well. In the decades since Bakke , the Court continued to divide over the basic ambiguity in Title VI—over exactly what sort of "discrimination" Section 601 outlawed. By the time Title VI returned to the Court in 2001, however, with Alexander v. Sandoval , a unified five-Justice majority appeared to settle on a more definite view. As Justice Scalia explained for the Sandoval majority, despite the lingering "uncertainty regarding [Title VI's] commands," it seemed "beyond dispute" at that point that a policy with only a disparate impact did not violate Section 601. Tallying the votes in Bakke seemed to make that clear enough: on that statutory point, five Justices in Bakke explicitly agreed that Title VI should be read coextensively with the Equal Protection Clause. And as claims under that constitutional provision had already been limited to cases of provable discriminatory intent, the Sandoval majority thought it stood to reason that claims under Title VI had to be so limited as well. The difficulty, however, was Lau . There, after all, the Court seemed to say that Section 601 did prohibit policies with a racially disparate impact, irrespective of whether those effects were intentional. But as the Sandoval majority saw it, Bakke had effectively resolved that difficulty as well: to the extent Lau rested on Section 601 directly—rather than HEW's regulations —the majority in Lau had simply misread Title VI. The only discrimination Title VI directly outlawed, according to the votes in Bakke , was intentional. As far as the Sandoval Court was concerned, to the extent Lau disagreed with Bakke , Lau had already been "rejected." In Sandoval the Court appeared to resolve the basic ambiguity in Title VI: the statute's central nondiscrimination mandate—Section 601—outlaws only intentional discrimination. But saying that much, the Sandoval majority also acknowledged, did not speak to whether policies with a disparate impact might still be barred by regulations issued under the rulemaking grant found in Section 602 of Title VI . Section 602, as noted, directs agencies to promulgate regulations "to effectuate" the antidiscrimination prohibition of Section 601 "consistent with achievement of the objectives of the statute." And pursuant to that directive, all Cabinet-level federal funding agencies, along with many smaller agencies, have since issued rules and guidance under Title VI outlawing disparate impact discrimination. As this section explains, however, Sandoval seems to have placed narrower limits on what funding agencies may redress through regulations under Section 602, arguably constraining them to redress in their rulemakings the same forms of intentional discrimination outlawed by Section 601. In the courts, and especially the Supreme Court, much of the fight over Title VI has focused on definitions—what in general terms will count as unlawful "discrimination" under Section 601. But for the agencies charged with actually enforcing that mandate the primary concerns have tended to be more operational and programmatic: how to go about the business of reviewing and assessing particular practices under Title VI. To address those concerns, funding agencies have therefore had to look beyond the bare substantive standard in Section 601 to their rulemaking authority under Section 602. Section 602 is at once a source of authority and a command, "authoriz[ing] and direct[ing]" every federal funding agency to "effectuate" Section 601's nondiscrimination mandate "by issuing rules, regulations, or orders of general applicability consistent with" the "objectives" of its underlying funding authority. Every Cabinet-level department, among many other smaller agencies, has since done so. And given DOJ's unique coordinating authority over Title VI, those funding agencies have generally followed the rules DOJ developed for HEW in 1964, including its regulation outlawing disparate impact discrimination . Like the nondiscrimination provision in Section 601, the rulemaking authority provided by Section 602 was made deliberately broad. That breadth has produced a further point of uncertainty about the statute: what limits are there to agencies' rulemaking authority under Section 602? The Supreme Court, for its part, has never squarely addressed that question, nor the validity of the disparate-impact regulations in particular. And as explained below, the resulting ambiguity has yielded two contrasting views of what Section 602 will allow an agency to outlaw as unlawful "discrimination" under Title VI: (1) a largely deferential view that would give agencies broad leeway to issue "broad prophylactic rules" reaching conduct beyond intentional discrimination; and (2) a more exacting view under which agencies would be limited to redressing provable cases of intentional discrimination. The earliest view of Title VI's rulemaking authority was also the most expansive. In his concurring opinion in Lau , Justice Stewart set out the basic theory: because Section 602 allows agencies to promulgate rules "effectuat[ing]" Section 601, HEW had the authority to enact any rule that broadly furthered the purpose of deterring "discrimination" in federally funded programs. All the courts would require, as a formal matter, is that any rules issued under Section 602 be "reasonably related" to the antidiscriminatory ambitions of the statute. Only two other Justices signed on to Justice Stewart's view in Lau , and it has never been adopted by a majority of the Court. But it also has never been squarely rejected by the Court either. This more expansive view of Section 602 appears nevertheless to rest on two arguable bases. The first comes down to basic principles of administrative law. As Justice Stewart noted in Lau , the Court has generally accorded considerable latitude to agencies authoring rules pursuant to generic rulemaking provisions, on the assumption that Congress intended to defer more particular legislative decisions to their expert judgment. And thus, when presented with such broad delegations—permitting an agency, for example, to make "such rules and regulations as may be necessary to carry out" another statutory mandate —the courts have traditionally been inclined to defer "to the informed experience and judgment of the agency to whom Congress delegated appropriate authority." Given its similarly expansive wording, Section 602 could be seen to embody much the same sort of broad rulemaking authority. In such cases, as Justice Stewart argued, and as some Justices later agreed, the test should be correspondingly lenient, asking only whether the agency's rule bears some reasonable relationship "to the purposes of the enabling legislation." That leniency would arguably authorize an agency to issue "broad prophylactic rules" so long as they "realiz[e] the vision laid out in" Section 601—as arguably would a rule outlawing policies with racially disparate impacts. Apart from principles of administrative law, this more expansive view of Section 602 might also find support in a constitutional analogy, based on two of the Reconstruction Amendments. As Justice Stevens pointed out in his dissent in Guardians Association v. Civil Service Commission , the Court had at one time indicated—in a decision dating to "the dawn of [the last] century"—that "an administrative regulation's conformity to statutory authority was to be measured by the same standard as a statute's conformity to constitutional authority." And as it happened, only a few years before Guardians , the Court had read the Fifteenth Amendment, despite "only prohibit[ing] purposeful racial discrimination in voting," to allow "Congress [to] implement that prohibition by banning voting practices that are discriminatory in effect." Congress could do that, according to Justice Stevens, because the Fifteenth Amendment—much like Title VI—supplements its prohibition against racially discriminatory voting policies with a provision empowering Congress "to enforce" that prohibition "by appropriate legislation." Given the structural similarity between the amendment and Title VI, Justice Stevens saw no reason why Section 602 should give federal agencies any less authority than the Fifteenth Amendment offers Congress—including authority to outlaw policies with discriminatory effects. Justice Steven's view in Guardians , like Justice Stewart's in Lau , has never commanded a majority from the Court. That analogy may also have lost some force more recently, following the Court's arguably more restrictive decisions under the Fifteenth Amendment. But the Court has also never expressly ruled out the analogy, and it appears to be at least consistent with the way the federal courts have read another of the Reconstruction Amendments—the Thirteenth, outlawing slavery and involuntary servitude. Whether that analogy would find favor among the Justices today seems at best uncertain, however, partly for the reasons discussed below. In opposition to the early expansive reading of Section 602, a number of other Justices—and arguably a majority in Sandoval —have suggested that regulations under Section 602 must instead fit more closely with the particular purpose of Section 601: ridding federally funded programs of intentional discrimination. Sandoval , given its posture, did not squarely address disparate impact rules under Title VI; that case concerned the right of private parties to sue under a Title VI disparate impact regulation, not the validity of the underlying regulation itself. But in a suggestive footnote in his opinion for the majority, Justice Scalia expressed some doubt that those regulations could be squared with the majority's view that Section 601 bars only intentional discrimination. The majority's concern fastened less on the breadth of Section 602 than on the narrowness of Section 601. It seemed "strange," Justice Scalia explained, that a rule prohibiting disparate impact could "effectuate" the purpose of Section 601 when that provision "permits the very behavior that the regulations forbid." Or as Justice O'Connor had put the same point in her concurrence in Guardians , also involving a disparate impact claim under Title VI, it was "difficult to fathom how the Court could uphold" regulations outlawing discriminatory effects when, to do so, they would have to "go well beyond " Title VI's purpose of proscribing intentional discrimination. The majority in Sandoval , like Justice O'Connor in Guardians , seemed to signal their dissatisfaction with the "reasonably related" test endorsed by Justice Stewart's concurrence in Lau . Neither, however, proposed a test to replace it. To do so, however, they may well have turned to a constitutional analogy of their own —based not on the Fifteenth Amendment but the Fourteenth. Under the Fourteenth Amendment, the Court has held that Congress may legislatively enforce that amendment's guarantees of equal protection and due process of law but in doing so may not redefine what would count as violating either . By that analogy, an agency could then clearly seek to enforce Section 601's bar against intentional discrimination by enacting prophylactic regulation "congruent and proportional" to redressing instances of different treatment . But the agency could not substantively amplify that prohibition by adding to the types of discrimination outlawed by Section 601—as a disparate impact rule arguably would, given the Court's view in Sandoval that Section 601 does not bar a policy simply for having discriminatory effects. The Court has yet to squarely resolve which of these views of agencies' rulemaking authority under Section 602 is the right one. Regardless of which they choose, however, an agency arguably may still be able to defend its Title VI disparate impact regulations, depending on how it styles its enforcement under that regulation. Even if Section 602 is construed narrowly to permit only regulations that address intentional discrimination, it might still be argued that Title VI allows agencies to promulgate regulations addressing disparate impact in at least some circumstances. As Justice Stevens pointed out dissenting in Sandoval , one way of looking at Title VI's disparate impact regulations is as an indirect rule against intentional discrimination—only intentional discrimination in a "more subtle form[]," masked by an "ostensibly race-neutral" policy but with "the predictable and perhaps intended consequence of materially benefitting some races at the expense of others." Styled that way, an agency might be able to defend its disparate impact rules as a means of "counteract[ing] unconscious prejudices and disguised animus that escape easy classification as disparate treatment." In that sense, those rules would still be directed at "uncovering discriminatory intent," even if only in subtler forms, such as "covert and illicit stereotyping." And, for that reason, those rules would arguably also comply with Sandoval 's more exacting standard for Section 602 regulations, despite their formal focus on racial disparities. Even if styled in this way, however, a disparate impact rule under Title VI would likely face further constraints. As the Court recently explained in the context of the Fair Housing Act, an agency relying on a disparate impact theory will still need to "point to a defendant's policy or policies causing" the "statistical disparity" at issue—that the policy actually had racially discriminatory effects . And to make that showing, the agency may also need to satisfy a "robust causality requirement," to "ensure[] that [r]acial imbalance [] does not, without more, establish a prima facie case of disparate impact," protecting "defendants from being held liable for racial disparities they did not create." What such a causality requirement might entail as a practical matter seems unclear at this point. Nevertheless, recasting the argument over Section 602 in these terms might help sharpen some of the debate around Title VI, by redirecting the discussion away from the abstract concerns about rulemaking authority to the more basic and concrete issue of what disparate impact liability may—or may not—involve. Although Title VI applies to funds distributed by every federal agency, much of the doctrine under the statute has been shaped by its use in the public schools. That doctrinal story has accordingly centered on one agency in particular: the Office for Civil Rights (OCR), originally housed in HEW but today located in the U.S. Department of Education (ED). As the agency primarily responsible for enforcing Title VI in the public schools, as well as nearly all colleges and universities, OCR handles every year a large volume and variety of claims alleging race and national origin discrimination. Some of the most common types of those claims are discussed below, beginning first with a brief overview of how ED, as a matter of policy, processes the complaints it receives under Title VI. OCR primarily enforces Title VI through its investigation and resolution of complaints. To guide its review of those complaints, OCR has published a detailed manual of procedures—known as the Case Processing Manual (CPM)—by which it receives, analyzes, and disposes of allegations under Title VI, among other statutes within its jurisdiction. That guidance document, described below, divides OCR's enforcement into five distinct phases: Jurisdictional Evaluation. At the first phase of its review, OCR evaluates an allegation for its basic sufficiency—conducting an essentially jurisdictional analysis. As a part of that evaluation, OCR first examines whether an allegation has enough information in it, of the right kind. If so, OCR has to establish jurisdiction over both the subject matter of the complaint as well as the entity complained of. Thus, the allegation must state enough facts from which to infer race or national origin discrimination (subject matter jurisdiction), and the complainant must allege discrimination by a program or activity that receives ED's financial assistance (personal jurisdiction). And the allegation must also be timely: a complaint under Title VI generally must be filed with OCR within 180 calendar days of the date when the discrimination allegedly occurred. Insufficiency on any of these points may result in an allegation's dismissal without OCR's further investigation or review. After determining that it has jurisdiction over an allegation and finds it otherwise suitable for review, OCR will formally open its investigation, beginning with the issuance of informational letters to both the complainant and recipient. Those letters primarily serve to notify the parties of the allegations OCR intends to investigate and the basis for its jurisdiction, including appropriate statutory and regulatory authority. The letters also apprise the parties of OCR's role in the investigation—as a "neutral fact-finder"—as well as the complainant's right to bring suit in federal court regardless of how OCR administratively resolves the complaint. Facilitated Resolution. As a part of its opening letter, OCR will also inform the parties of its voluntary resolution process, called a "Facilitated Resolution Between the Parties." Under that process, OCR may offer to serve as "an impartial, confidential facilitator between the parties," to assist them in informally resolving the allegations before OCR formally makes any findings of its own. During those discussions OCR may accordingly suspend its investigation for up to 30 calendar days to allow negotiations to proceed in good faith; it will reinstate its investigation, however, should the parties fail to reach an agreement within that time. In no case, though, will OCR approve or otherwise endorse an agreement reached under this process, nor monitor a recipient's compliance with it. Investigation. If the parties cannot voluntarily resolve the complaint through facilitated negotiation, OCR will proceed to investigate. At any time during that investigation—which may involve OCR's review of school data, interviews with students and staff, or other measures—the recipient may still choose to negotiate a voluntary resolution with OCR, and recent resolutions suggest that this is relatively common. In such cases, OCR will issue a resolution letter memorializing the allegations and its investigation, along with the agreement resolving them. In these cases, however, OCR will generally not make any findings on the underlying allegations. In the event the recipient declines to negotiate a voluntary resolution, at the completion of its investigation OCR will issue findings on each allegation, resolving them by a preponderance of the evidence. In each case OCR will therefore explain why the evidence likelier than not supports the finding of a violation ("non-compliance determination") or else explain why it does not ("insufficient evidence"). In cases of non-compliance OCR will also propose a resolution agreement, outlining the steps for the recipient to take to resolve the allegations in question and ensure its future compliance with Title VI. A recipient generally has 90 days in which to consider and negotiate the terms of a final agreement with OCR. If the recipient and OCR fail to reach an agreement within that period, OCR will advise the recipient, by "Letter of Impending Enforcement Action," that it intends to proceed to enforcement should the parties fail to reach an agreement in short order. Monitoring. Once the sides have reached an acceptable resolution agreement, OCR will monitor, on an ongoing basis, the recipient's compliance with its terms. To do so, recipients generally must agree to certain reporting requirements, ensuring OCR access to "data and other information in a timely manner" by which it can assure the recipient's compliance. OCR also reserves the right to "visit the recipient, interview staff and students, and request such additional reports or data as are necessary for OCR to determine whether the recipient has fulfilled the terms and obligations of the resolution agreement." In some instances OCR may also choose to amend or altogether end a resolution agreement "when it learns that circumstances have arisen that substantially change, fully resolve, or render moot, some or all of the compliance concerns that were addressed by the resolution agreement." Enforcement Action. Where OCR cannot negotiate or secure compliance with an acceptable resolution agreement, it may resort to either of the two enforcement mechanisms allowed by Title VI: (1) an administrative proceeding resulting in the termination or refusal of federal funds; or (2) the referral of a complaint to DOJ for litigation. Fund termination, as noted, was envisioned as the primary mechanism for enforcing Title VI, and was once aggressively used by OCR to enforce the desegregation of southern schools. Over the past several Administrations its use appears to have waned significantly, perhaps owing to an increased reliance on resolution agreements, voluntary or otherwise, to achieve compliance. OCR's administrative docket for Title VI is considerable, covering a wide variety of allegations involving race and national origin discrimination. Among the issues raised in those complaints, three appear especially common: different treatment, retaliation, and racial harassment. In 2016, for instance, OCR reported receiving some 2,400 total complaints raising issues under 17 general categories of Title VI violations. Of those, 976 alleged some form of different treatment, while another 569 complaints alleged race-based retaliation and a further 548 made claims of racial harassment. In 2015, OCR reported largely similar figures as well. The next section examines two recent examples of how OCR reviews complaints under Title VI, one involving a more typical allegation of indirect "disparate treatment," and another posing a less typical allegation of direct discrimination. The single largest category of complaints OCR receives involves allegations of "disparate treatment." That category covers a wide variety of conduct, covering any complaint that a recipient has singled out an individual or individuals by race for adverse treatment. Of those complaints two types are especially common: "intentionally disciplining students differently based on race" or else excluding them in some way. As noted, OCR will seek to confirm those allegations in either of two ways: either directly, by looking to evidence of overt discriminatory intent, or else indirectly, by establishing that any "apparent differences in the treatment of similarly-situated students of different races" have no legitimate, nondiscriminatory basis. And because Title VI has been read to overlap with the Equal Protection Clause, even where OCR believes a recipient has treated individuals differently by race, it still has to assess whether that treatment was a "narrowly tailored" means of "meet[ing] a compelling governmental interest." In one recent example, OCR received a complaint from an African American student, identified only as "Student A," alleging that he had been disciplined more severely than his white classmates, in violation of Title VI. As in many disciplinary cases, the student did not produce direct evidence of discrimination. And so OCR instead looked to whether there were any "apparent differences" in the way the school treated Student A from the way it handled "similarly-situated students of different races," and if so, whether those differences had a legitimate, nondiscriminatory basis. In the course of its investigation, OCR uncovered what it believed were four apparent differences in the way the school treated Student A. First, the school had repeatedly recorded disciplinary warnings it gave Student A, but "did not consistently record warnings given to similarly situated white students." Second, even though "the Principal employed an informal progressive discipline policy" that was applied to Student A, "increasing the severity of the disciplinary consequence after each incident," a "similarly situated white student who had a more extensive disciplinary history, did not face increasingly severe disciplinary consequences." Third, the evidence suggested that the school's principal "responded more favorably" to allegations made by a white student's mother than Student A's mother "that other students were teasing him to entice him to engage in misconduct." And, finally, Student A had pointed to a specific case where a white male student had been treated more leniently for assaulting another student. The school, for its part, sought to defend some of those decisions by pointing to differences in the students' misconduct. OCR, however, disagreed: according to its investigators, the students' files bore out no meaningful differences besides the students' race. Nor did OCR accept the school's admission that in the other cases it had simply made a mistake: the quantity, frequency, and variety of those mistakes, OCR found, "established a pattern of unjustified, discriminatory treatment on the basis of race in the discipline administered to Student A." That was enough, OCR concluded, to violate Title VI and its implementing regulations. Another recent case, also involving an allegation of disparate treatment, illustrates how OCR reads Title VI against the backdrop of the Equal Protection Clause. That case arose in the wake of events in Ferguson, MO, in 2014, following the fatal police shooting of an 18-year-old African American that provoked widespread protests in Ferguson and elsewhere. In response to the events there, an Illinois public school had decided to convene a special "Black Lives Matter" assembly, so that "black students [could] express their frustrations" in "a comfortable forum." To do that, however, the school chose to "limit the assembly to participation by students who self-identified as black." That decision, as the school district later admitted, clearly amounted to different treatment—excluding some students while admitting others solely based on whether they identified as African American. That finding alone, though, did not decide the school's liability under Title VI. Instead, OCR had to go on to examine whether the school's decision would satisfy constitutional requirements—whether the school had an "interest in holding a racially exclusive assembly [that] was compelling and that the means [it] used [would] survive strict scrutiny." Looking to relevant constitutional precedent, OCR ultimately sided with the complainant: even though the school did have a compelling interest in holding a racially exclusive assembly, it had nevertheless failed "to assess fully whether there were workable race-neutral alternatives" or to "conduct a flexible and individualized review of potential participants." The school had therefore violated Title VI, according to OCR. And to resume compliance, the school district agreed not to allow similarly exclusive assemblies again. Title VI has gone largely unchanged in the 50 years since it became law. As this report has explained, the debates over the statute have therefore centered on how the courts have read its two central provisions—Sections 601 and 602—and how federal agencies have gone about enforcing them. But Congress has the ultimate say over how Title VI works—rooted not only in its legislative power but in its authority to oversee the statute's use by federal agencies. As this section explains, recently two issues over the statute have drawn particular congressional interest: the viability of disparate impact regulations under Section 602, and the inclusion of new protected classes in Section 601. As explained earlier, with its 2001 decision in Alexander v. Sandoval , the Court seemed to cast doubt on the future of all disparate impact liability under Title VI as currently written, even when liability was premised on regulations issued under Section 602. In the last several months, following the release of a widely remarked report on school safety, the Trump Administration signaled that it may be rethinking altogether Title VI regulations that reach beyond intentional discrimination to address policies with a racially disparate impact. Given the continuing debate about the relation of Title VI's central provisions, Congress could opt to put down its own marker, by definitively clarifying Title VI's scope in either of two ways. On the one hand, Congress could make clear that Section 601 indeed prohibits only intentional discrimination, and that any rules under Section 602 may not find a recipient liable for discrimination absent proof of discriminatory intent. Congress, on the other hand, could expressly endorse disparate impact under Title VI by, for example, grafting that standard onto Section 601, as it has done in Title VII of the 1964 Civil Rights Act. That addition would unambiguously allow funding agencies to investigate policies and practices under Title VI based on their discriminatory effects, regardless of the underlying intent. In addition to clarifying the types of discrimination Title VI outlaws, Congress could also choose to revise the classes of individuals who come within its protection. One recent proposal, for example, would amend Section 601 to include "sex (including sexual orientation and gender identity)" along with race, color, and national origin among its protected classes. Although that or a similar amendment would clearly expand Title VI's coverage, its effects will likely hinge on how the courts choose to interpret Section 601 in light of such additions. Though a complete analysis lies beyond the scope of this report, at least two readings seem arguable. On the one hand, the courts could continue to read Section 601 to "enact[] constitutional principles," in which case they would presumably review claims based on sex discrimination under a heightened standard of review, while in the case of gender identity, possibly only for basic rationality. On the other hand, to the extent that an amendment introduces a statutory protection for a class of individuals not currently recognized by the Court as a constitutionally "suspect classification," that addition, especially if buttressed by supporting legislative history, could suggest that Congress had decided to amend the reach of Title VI altogether, to "independently proscribe conduct that the Constitution does not." In the 50 years since becoming law Title VI has played a central role in addressing racial discrimination in the nation's schools. Title VI provides that protection in a unique way: by making the promise of nondiscrimination a condition for any program or institution that receives federal financial support. For much of its history, the debates over Title VI have fastened on two basic ambiguities in the statute: the kind of "discrimination" Title VI was meant to outlaw and the types of rules a funding agency could issue to effectuate that prohibition. The Supreme Court appears to have definitively resolved the first of those ambiguities: because Title VI simply "enacts constitutional principles," as currently written, it prohibits only intentional discrimination. And on that basis the Court has suggested, but not definitively ruled on, how it might resolve the second ambiguity as well: to effectuate Title VI's purpose, an agency may outlaw only policies resulting from a provable discriminatory intent, not simply having a racially discriminatory effect. Whether the Court will turn that suggestion into a holding remains to be seen. Until then, however, federal agencies like OCR will likely continue to enforce Title VI consistent with constitutional standards that the Court has since read into the statute. In OCR's case, that enforcement work is already considerable, involving thousands of complaints every year culminating in significant resolutions across a wide range of schools and institutions of higher education. And in the background remains ED's ultimate authority under Title VI—to withdraw its financial support from any program or institution that refuses to comply with the statute's command that all individuals be treated equally, regardless of their race.
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Title VI of the Civil Rights Act of 1964 prohibits federally funded programs, activities, and institutions from discriminating based on race, color, or national origin. In its current form, largely unchanged since its adoption, Title VI incorporates a number of unique features. Besides barring federally funded programs from discriminating based on race, Title VI also authorizes and directs all federal funding agencies to promulgate rules effectuating that nondiscrimination mandate. Those rules were also made subject to presidential approval, an authority since delegated to the Attorney General by executive order. To enforce Title VI, agencies also have at their disposal a uniquely powerful tool: the termination or refusal to provide federal financial support to an institution or program seeking it. Although this power to withdraw federal funds was envisioned as the primary mechanism for enforcing Title VI, that authority was also hedged with a range of procedural requirements designed to spur agencies to resolve complaints against recipients through voluntary agreements. In the 50 years since Title VI became law much of the debate over the statute has centered on how the courts have read its two central provisions—Sections 601 and 602—and how federal agencies have gone about enforcing them. In the courts those debates have especially focused on what counts as unlawful "discrimination" under Section 601. The courts have long agreed that Title VI bars federally funded programs from intentionally singling out individuals by race for adverse treatment. In its first case involving Title VI the Supreme Court suggested that Section 601 might also reach beyond intentional discrimination to bar the use of policies with a disparate impact—policies that, irrespective of the intent, impose a discriminatory effect on different racial groups. With its 2001 ruling in Alexander v Sandoval, the Court appeared to put that interpretive question to rest: Title VI directly prohibits only intentional discrimination. For the agencies charged with enforcing Title VI, the primary concerns have tended to be more operational and programmatic—how to go about the business of reviewing and assessing particular practices under Section 602 of the statute. Section 602 authorizes and directs agencies to issue regulations "effectuat[ing]" Section 601. The breadth of that authority has produced a further point of uncertainty about the statute: what limits are there to funding agencies' rulemaking authority under Title VI? So far, two divergent views have emerged from the Court's decisions: (1) a largely deferential view that would give agencies leeway to issue prophylactic rules reaching conduct beyond intentional discrimination, and (2) a more exacting view under which agencies may redress only provable cases of intentional discrimination. Although Title VI's nondiscrimination prohibition accompanies nearly all awards of federal financial support, much of the statute's doctrine has been shaped by its use in the public schools. That doctrinal history has centered on one agency in particular: the Office for Civil Rights (OCR) in the U.S. Department of Education (ED). Title VI continues to play a central part in OCR's mission of protecting civil rights on campuses at all educational levels, and in institutions both public and private. OCR handles a large volume and variety of claims alleging race and national origin discrimination, which it administratively resolves through a series of investigative procedures laid out in its Case Processing Manual. Although the types of allegations OCR investigates vary, three major categories of complaint occupy much of its docket: disparate treatment, retaliation, and racial harassment. Congress has the ultimate say over how Title VI works—rooted not only in its legislative power but in its authority to oversee the statute's enforcement. In recent years two questions surrounding Title VI have drawn particular congressional interest: the viability of disparate impact regulations under Section 602 and the possible inclusion of new protected classes in Section 601. No matter how Congress may choose to address those subjects, however, they are likely only to raise further questions about the future of this landmark civil rights law.
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Kuwait's optimism after the 2003 fall of its nemesis, Saddam Hussein, soured after the January 15, 2006, death of Amir (ruler) Jabir Ahmad al-Jabir Al Sabah. From then until 2013, Kuwait underwent repeated political crises that produced economic stagnation. Under Kuwait's 1962 constitution, an Amir (Arabic word for prince, but which is also taken as "ruler") is the head of state and ruler of Kuwait. He is Commander-in-Chief of the Armed Forces, appoints all judges, and can suspend the National Assembly. The Amir appoints a Prime Minister as head of government, who in turn appoints a cabinet. The Prime Minister has always been a member of the Sabah family, and until 2003 the Prime Minister and Crown Prince/heir apparent posts were held by a single person. It is typical of Kuwaiti cabinets that most of the key ministries (defense, foreign policy, and finance) are led by Sabah family members. At the time of Amir Jabir's death, his designated successor, Shaykh Sa'ad bin Abdullah Al Sabah, was infirm. A brief succession dispute among rival branches of the ruling Al Sabah family was resolved with then-Prime Minister Shaykh Sabah al-Ahmad al-Jabir Al Sabah, the younger brother of the late Amir, becoming Amir on January 29, 2006, although the long-standing tacit agreement to alternate succession between the Jabir and Salem branches of the family was suspended. Amir Sabah appointed two members of his Jabir branch as Crown Prince/heir apparent and as prime minister (Shaykh Nawwaf al-Ahmad Al Sabah and Shaykh Nasser al Muhammad al-Ahmad Al Sabah respectively). The succession dispute was unprecedented for the involvement of an elected legislature in replacing a Kuwait leader. Amir Sabah tends to be more directly involved in governance than was his predecessor. He is 87 years old, but remains actively engaged in governing. Still, there reportedly is growing discussion within Al Sabah circles about the succession. The current Prime Minister, Shaykh Jabir al-Mubarak Al Sabah, has been in office since December 2011. The National Assembly, established by Kuwait's November 1962 constitution, is the longest-serving all-elected body among the Gulf monarchies. Fifty seats are elected, and up to 15 members of the cabinet serve in the Assembly ex-officio . The government has expanded the electorate gradually: in the 1990s, the government extended the vote to sons of naturalized Kuwaitis and Kuwaitis naturalized for at least 20 (as opposed to 30) years. Kuwaiti women obtained suffrage rights when the National Assembly passed a government bill to that effect in May 2005. In recent elections, about 400,000 Kuwaitis have been eligible to vote. Kuwait's National Assembly has more scope of authority than any legislative or consultative body in the GCC states. It can draft legislation, rather than merely act on legislation introduced by the government. The Assembly does not confirm cabinet nominees (individually or en bloc), but it frequently questions ministers ("grilling"). It can, by simple majority, remove ministers in a vote of "no confidence," and can oust a prime minister by voting "inability to cooperate with the government." The Assembly reviews government decrees issued during periods of Assembly suspension. Kuwait's leaders have, on nine occasions (1976-1981, 1986-1992, 2003, 2006, 2008, 2009, 2011, 2012, and 2016), used their constitutional authority to dissolve the Assembly. Suspension mandates new elections within 60 days. Some oppositionists seek a constitutional monarchy in which an elected Assembly majority would name a Prime Minister, who would form a cabinet. Political parties are not permitted, and factions compete in Assembly elections as "currents," "trends," or "political societies." These factions also organize at a parallel traditional Kuwaiti forum called the diwaniyya —informal evening social gatherings, hosted by elites of all ideologies. Factions in Kuwait generally group as follows. " T ribalists ." Generally less educated but who dominate two out of the five electoral districts. At times, some tribalists in the Assembly have grouped into a faction widely referred to as "service deputies"—members primarily focused on steering government largesse and patronage to their constituents. Shia s. Most Shias in the Assembly are Islamists, organized in a bloc called the National Islamic Alliance. These deputies tend to side with the government, perhaps out of concern about Sunni Islamists. Women . Elected women deputies have tended to align with the government. "Liberals. " Highly educated and mostly secular elites, many of whom supported Arab nationalist movements in the 1960s and 1970s. In prior years adherents of this view banded together in the "Kuwait Democratic Forum" political society. Sunni Islamists . There are two major Sunni Islamist tendencies in Kuwait: supporters of the Muslim Brotherhood, and harder-line "Salafists." Muslim Brotherhood supporters operate in Kuwait under a banner called the Islamic Constitutional Movement (ICM), with no record of violence. However, the government has sought to disband the Brotherhood's Kuwait charity arm, Islah . Youths . Since 2008, Kuwaiti youth groups have organized to support "liberal" deputies, using such names as the "Orange Movement" or "Fifth Fence." These groups participated in street protests in Kuwait during the 2011 Arab uprisings. Disputes between the Al Sabah and oppositionists in the Assembly after Amir Jabir's death in 2006 manifested as repeated Assembly suspensions and elections, none of which has resolved differences over the power balance between the executive and the Assembly. June 29, 2006, E lection . Five months after taking power, Amir Sabah suspended the Assembly in May 2006 to prevent oppositionists from questioning the Prime Minister over the government's refusal to reduce the number of electoral districts to 5 (from 25). The proposal sought to reduce "vote buying" and the effects of intratribal politics. In elections set for June 29, 2006, the opposition, backed by youths supporting the "Orange" banner, won 34 out of the 50 seats. Women were allowed to vote and run for the first time, but none of the 27 women won. After the election, the government reduced the number of electoral districts to 5. May 17, 2008 , Election . In March 2008, amid Assembly demands for government employee pay raises, the Amir dissolved the Assembly and set new elections for May 17, 2008. Sunni Islamists and conservative tribal leaders won 24 seats, and "liberals" won seven. Progovernment and other independent tribalists and Shias held the remaining 19 seats. No woman was elected. May 16, 2009 , Election . Amid an Assembly demand to question the Prime Minister for alleged misuse of public funds, the Amir suspended the Assembly and set elections for May 16, 2009. More than 20 new parliamentarians were elected, including 4 women (the first ever elected). Two votes of no confidence in the Prime Minister (in December 2009 and January 2011) failed, although the second vote was narrow (22 of the 50 Assembly deputies voted no confidence). The Arab uprisings that began in early 2011 broadened Kuwait's opposition. In January 2011, opposition deputies, supported by youths using names such as the "Fifth Fence," forced the Interior Minister to resign for failing to prevent the torture to death of a man in custody. In March 2011, a Shia parliamentarian's request to "grill" the Foreign Minister about Kuwait's sending of naval forces to support Bahrain's Sunni minority government against a Shia-led uprising prompted a cabinet resignation and reshuffling. Following reports that two Kuwaiti banks had deposited $92 million into the accounts of several parliamentarians, thousands protested in September 2011, compelling the cabinet to adopt an anticorruption law. On November 16, 2011, oppositionists in and outside the Assembly stormed the Assembly building, demanding the Prime Minister's resignation. On November 28, 2011, he did so, and the Amir appointed another royal family member, then-Defense Minister Shaykh Jabir al-Mubarak Al Sabah. He was sworn in without first naming a new cabinet, a technical constitutional breach. February 2, 2012, Election . On December 6, 2011, Amir Sabah dissolved the National Assembly and set new elections for February 2, 2012 (within the mandated 60 days). About 20 opposition deputies competed as one "Opposition Bloc," supported by youth leaders, advocating a fully elected government and legalization of political parties. Opposition candidates won 32 of the 50 seats, but none of the 19 woman candidates was elected. Turnout was about 62%. A leading opposition figure, Ahmad al-Sadun, returned to the Speaker post he held during 1985-1999, replacing the progovernment Jassim Al-Khurafi. The Prime Minister appointed four oppositionists to the cabinet. In June 2012, when the Assembly requested to grill the Interior Minister, the Amir exercised his authority, under Article 106 of the constitution, to suspend the Assembly for one month (renewable for two months, with the concurrence of the Assembly). December 2012 Election Triggered by Court Decision . On June 20, 2012, the constitutional court voided the December 2011 Assembly suspension on technical grounds and reinstated the May 2009 Assembly. The Amir set new elections for December 1, 2012, and decreed that each voter would cast a ballot for one candidate (per district), rather than four. In October 2012, an estimated 50,000-150,000 protesters called the decree an effort to complicate opposition efforts to forge alliances. The government responded by banning large public gatherings. A boycott by Sunni Islamist factions lowered turnout to 40% and produced a "progovernment" Assembly, including an unprecedented number of Shias (17). Three women were elected, as were some independent Sunni Islamists. Another Court-Triggered Election . On June 16, 2013, the Constitutional Court upheld the Amir's decree that each person would vote for only one candidate per district (see above), but dissolved the Assembly on the basis of improper technicalities in the Amir's election decree. New elections—the sixth in five years—were held on July 27, 2013, and eight women ran (out of 418 candidates registered). Several opposition groups, including the ICM, boycotted again, producing another progovernment Assembly that included nine Shias and several tribalists. Two women initially won seats, but a miscount deprived one of them of her seat, and the other resigned in 2014. Shaykh Jabir continued as Prime Minister, and his cabinet included one Shia and four Salafists. November 2016 Election . Public demonstrations generally subsided after 2013, and oppositionists indicated they would participate in the next Assembly elections. Citing "circumstances in the region" (an apparent reference to the Islamic State challenge and conflicts in Syria and Yemen), the Amir suspended the National Assembly and set new elections for November 26, 2016—earlier than planned. Of the 454 candidates, 15 were women. The main opposition political societies participated, and the vote produced an Assembly roughly split between progovernment and opposition deputies. The State Department called the elections "generally free and fair." Reflecting its altered balance of factions, the Assembly "grilled" the Prime Minister in 2017 for "administrative regularities." To forestall further Assembly challenges, the Amir dissolved the cabinet in October 2017. A new government was appointed on December 11, 2017, with a policy outlook similar to that of the previous cabinet. The Amir's son was appointed First Deputy Prime Minister and Defense Minister. Two of the appointees were women—the Minister of Social and Labor Affairs, and the Minister of State for Housing and for Services Affairs. The next National Assembly elections are due to be held in 2020. Elections for vacant seats are held periodically, including by-elections for two vacant seats to be held in March 2019. On broad human rights issues, the State Department identifies the principal human rights problems in Kuwait as allegations of torture of detainees; political prisoners; restrictions on freedom of speech, including criminalization of criticism of government officials and defamation of religion; limited rights for a stateless population referred to as Bidoon s ; trafficking in persons; criminalization of male same-sex sexual activity; and reports of forced labor, especially among foreign workers. Since 2011, Kuwait's government has increasingly imprisoned and revoked the citizenship of social media critics for "insulting the Amir," tarnishing Kuwait's reputation for political tolerance. In 2017, Kuwait also revived, after a four-year hiatus, the practice of executions by executing seven prisoners—one of which was a member of the ruling family—for capital offenses. Most were expatriates. Of the 140 Gulf-based activists identified in November 2016 by Human Rights Watch as struggling against government repression, 44 are from Kuwait. Two of the most prominent independent human rights organizations in Kuwait are the Kuwait Society for Human Rights and the Kuwait Association for the Basic Evaluation of Human Rights, both of which have been allowed access to Kuwait's prisons. U.S. democracy programs in Kuwait funds discussions with Kuwaiti leaders, public diplomacy, training civil society activists, enhancing the capabilities of independent Kuwaiti media, promoting women's rights, and providing a broad spectrum of educational opportunities. However, published readouts of most high-level U.S.-Kuwait meetings indicate that U.S.-Kuwait discussions focus mostly on security and regional issues. The National Endowment for Democracy, which obtains funds from the State Department, has in recent years given grants to Kuwaiti groups that promote civil society, human rights, women's rights, and the rights of noncitizens in Kuwait. Women enjoy substantial, but not equal, rights in Kuwait. Women serve in national appointed positions and, since 2006, have been able to run and vote in National Assembly elections. Women in Kuwait can drive, and many women own businesses. An estimated 16% of the oil sector workforce is female. Women run several nongovernmental organizations, such as the Kuwait Women's Cultural and Social Society, dedicated to improving rights for women. Still, Kuwait remains a traditional society and Islamists who want to limit women's rights have substantial influence. The law does not specifically prohibit domestic violence, although courts try such cases as assault. Kuwaiti women who marry non-Kuwaiti men cannot give their spouses or children Kuwaiti citizenship. Numerous international reports assert that violence, particularly against expatriate domestic workers, is frequent. Female police officers in public places combat sexual harassment. For eight years ending in 2015, Kuwait was designated by the State Department's Trafficking in Persons report as "Tier Three" (worst level). Kuwait's rating was assessed in the 2016, 2017, and 2018 reports as "Tier 2: Watch List," on the grounds that it is making significant efforts to meet minimum standards for the elimination of trafficking in persons. The 2018 report credited Kuwait for implementing a labor law that prohibits employers from confiscating domestic workers' passports, increases penalties for employers who engage in unscrupulous recruiting practices, makes more aggressive efforts to investigate and prosecute traffickers, and funds a five-year national strategy to combat trafficking in persons. Over many years, there have been repeated reports of beatings and rapes of domestic workers by their Kuwaiti employers, occasionally causing diplomatic difficulties for Kuwait. In July 2016, Kuwait set a minimum monthly wage for maids working in Kuwait, almost all of whom are expatriate women. In February 2018, following reports that a Filipina maid had been found dead in an apartment freezer in Kuwait, Philippines President Rodrigo Duterte barred travel by Philippines citizens to Kuwait. In April 2018, Kuwait expelled the Philippines' ambassador and recalled its ambassador from Manila. Kuwait's labor laws protect the right of workers to form and join unions, conduct legal strikes, and bargain collectively, but contain significant restrictions. The government allows one trade union per occupation, but the only legal trade federation is the Kuwait Trade Union Federation (KTUF). Foreign workers, with the exception of domestic workers, are allowed to join unions. Since 2011, strikes have taken place among customs officers and employees of Kuwait Airways, and oil workers conducted a three-day strike in April 2016. In 2014, the government prevented a strike by Kuwait Petroleum Company employees by threatening to imprison strikers. Non-Gulf Arabs, Asians, and stateless residents continue to face discrimination largely because of the perception that they are seeking to take advantage of generous Kuwaiti social benefits. The legal status of the approximately 100,000 stateless persons ("bidoons," the Arabic word for "without"), who have no proof of citizenship but claim that they have lived in Kuwait for many generations, has vexed Kuwait for decades. The U.N. High Commission on Refugees (UNHCR) estimates that about 43,000 of the bidoons have a legitimate claim to citizenship. In March 2011, the government set a deadline of 2017 to resolve the status of the bidoons. That deadline was not met, although over the past few years, the government has been giving citizenship to small numbers of bidoons who were children of soldiers killed resisting the 1990 Iraqi invasion of Kuwait. In 2017, the government opened a hospital closed to noncitizens. Successive State Department human rights reports have asserted that the government does not always respect constitutional provisions for freedom of speech and the press. Governmental press censorship ended in 1992, fostering the growth of a vibrant press, but the Press and Publications Law establishes topics that are off limits for publication and discussion. Publishers and bloggers must be licensed by the Ministry of Information. Kuwait (and other GCC states) has increasingly used and enacted laws against the use of social media to criticize the government. Kuwait's penal code (Article 25) provides for up to five years in jail for "objecting to the rights and authorities of the Amir or faulting him." In July 2015, Kuwait enacted a cybercrimes law that punishes insulting religious figures, criticizing the Amir, or harming Kuwait's relations with other countries. Since 2014, the government has revoked the citizenship of some naturalized Kuwaitis for criticizing the government, but Kuwait-born citizens cannot legally have their citizenship revoked. Recent State Department religious freedom reports have noted little change in Kuwait's respect for religious freedoms. Of the 30% of Kuwait's population that are Shia Muslims, about half are Arabs originally from Saudi Arabia, and half are of Persian origin. Kuwaiti Shias are well represented in the rank and file of the military and security apparatus as well as government institutions, and are able to select their own clerics without government interference. A national unity law prohibits "stirring sectarian strife," and the government continues to prosecute Sunnis for alleged violations. However, Kuwaiti Shias continue to report official discrimination, including limited access to religious education and places of worship. In contrast to some of the other Gulf states, there is no registration requirement for religious groups, but all non-Muslim religious groups must obtain a license to establish an official place of worship. Religious groups are generally able to worship without interference. Members of these groups report difficulties obtaining permission to construct new facilities. Despite opposition from Kuwaiti Islamists, the government has licensed seven Christian churches to serve the approximately 750,000 Christians in Kuwait (almost all are expatriates): Protestant, Roman Catholic, Greek Catholic (Melkite), Coptic Orthodox, Armenian Orthodox, Greek Orthodox, and Anglican. Members of religions not sanctioned in the Quran—including about 400 Baha'i's, 100,000 Buddhists, 100,000 Hindus, and 10,000 Sikhs—are mostly noncitizens working in Kuwait. In addition to a few hundred Christians, there are some Baha'i citizens. Kuwait was not strategically or politically close to the United States until the Iran-Iraq War (1980-1988), when Kuwait—a backer of Iraq—sought U.S. help against Iranian attacks. A U.S. consulate opened in Kuwait in October 1951 and was elevated to an embassy upon Kuwait's independence from Britain in 1961. Kuwait was the first Gulf state to establish relations with the Soviet Union in the 1960s, perhaps reflecting the political strength in Kuwait of relatively left-wing figures. Lawrence Robert Silverman is U.S. Ambassador to Kuwait. Iraq's invasion of Kuwait in August 1990, and the U.S. role in ending the Iraqi occupation, deepened the U.S.-Kuwait defense relationship. A formal bilateral Defense Cooperation Agreement (DCA) was signed on September 19, 1991, seven months after the U.S.-led expulsion of Iraqi forces from Kuwait in the 1991 Operation Desert Storm. The DCA had an initial duration of 10 years, but remains in effect. The text is classified, but reportedly provides for mutual discussions in the event of a crisis; joint military exercises; U.S. evaluation of, advice to, and training of Kuwaiti forces; U.S. arms sales; prepositioning of U.S. military equipment; and U.S. access to a range of Kuwaiti facilities. The DCA includes a Status of Forces Agreement (SOFA) that provides that U.S. forces in Kuwait be subject to U.S. rather than Kuwaiti law—a common feature of such accords. The visit of Amir Sabah to Washington, DC, on September 8, 2017, included convening of the second U.S.-Kuwait "Strategic Dialogue," which reaffirmed the U.S. commitment to enhance Kuwait's military capabilities. During a December 3-5, 2017, visit to Kuwait, then-Defense Secretary James Mattis said that the U.S.-Kuwait military relationship is "very close." The Amir has met with President Trump on three occasions, most recently September 5, 2018, focusing on regional issues including the U.S. concept of an anti-Iran Middle East Strategic Alliance (MESA). Another U.S.-Kuwait Strategic Dialogue meeting was to be held during Secretary of State Michael Pompeo's trip to the Gulf states in January 2019, but the Secretary was compelled to return to the United States before reaching Kuwait due to a death in his family. Kuwait's military has regained its pre-Iraq invasion strength of 17,000. U.S. officials say that the U.S. training and mentorship has improved the quality of the Kuwaiti military, particularly the Air Force. Since the U.S. withdrawal from Iraq in 2011, there have been about 13,500 U.S. troops in Kuwait under the DCA —constituting more than one-third of the 35,000 total U.S. forces in the Gulf. Defense Secretary Mattis noted during his December 2017 visit to Kuwait that only Germany, Japan, and South Korea host more U.S. forces than Kuwait does. The U.S. force includes Army combat troops, not purely support forces, giving the United States the capability to project ground force power in the region. Each spring, these forces participate in an annual three-week "Eagle Resolve" military exercise with forces from Kuwait and other GCC states. As discussed below, Kuwait hosts the headquarters for the U.S.-led operations against the Islamic State (Operation Inherent Resolve) and has made its military facilities available to coalition partners in that military campaign. U.S. forces in Kuwait are stationed at several facilities that include Camp Arifjan (the main U.S. headquarters in Kuwait, 40 miles south of Kuwait City); a desert training base and firing range called Camp Buehring (near the border with Saudi Arabia); Ali al-Salem Air Base; Shaykh Ahmad al-Jabir Air Base; and a naval facility called Camp Patriot. Under the DCA, the United States maintains 2,200 Mine Resistant Ambush Protected (MRAP) vehicles in Kuwait. U.S. armor prepositioned in Kuwait was used for the 2003 invasion of Iraq. (In December 2005, U.S. forces vacated Camp Doha, the headquarters for U.S. forces in Kuwait during the 1990s.) Recognizing Kuwait's consistent and multifaceted cooperation with the United States, on April 1, 2004, the Bush Administration designated Kuwait as a "major non-NATO ally (MNNA)," a designation held by only one other Gulf state (Bahrain). The designation opens Kuwait to increased defense-related research and development cooperation with the United States, but does not expedite U.S. executive branch approval of arms sales to Kuwait. The following sections discuss U.S.-Kuwait defense cooperation in recent regional conflicts. Iran-Iraq War . During the Iran-Iraq War, Iran had sought to compel Kuwait to end its financial and logistical support for Iraq by striking Kuwaiti oil facilities, such as the Al Ahmadi terminal, with cruise missiles. In 1987-1988, the United States established a U.S. naval escort and tanker reflagging program to protect Kuwaiti and international shipping from Iranian naval attacks (Operation Earnest Will). As part of the skirmishes between the United States and Iran in the course of that operation, Iran attacked a Kuwaiti oil installation (Sea Island terminal). Operation Desert Storm . Asserting that Kuwait was one of Iraq's key financiers during its fight against Iran in the Iran-Iraq War, Kuwait's leaders were shaken by the August 2, 1990, Iraqi invasion of Kuwait. Most experts believe that the invasion was a result of Saddam Hussein's intent to dominate the Persian Gulf. Iraq's occupation lasted until U.S.-led coalition forces of nearly 500,000 expelled Iraqi forces from Kuwait in "Operation Desert Storm" (January 16, 1991-February 28, 1991). Kuwait's leaders, who spent the occupation period in Saudi Arabia, were restored to power. Kuwait paid $16.059 billion to offset the U.S. incremental war costs. Iraq Containment Operations ( 199 1-2003 ) . After the 1991 war, about 4,000 U.S. military personnel—and enough prepositioned U.S. armor to outfit two combat brigades—were stationed at Kuwaiti facilities to contain Iraq. The 1992-2003 enforcement of a "no fly zone" over southern Iraq (Operation Southern Watch, OSW) involved 1,000 U.S. Air Force personnel deployed at Kuwaiti air bases. Kuwait contributed about $200 million per year for U.S. costs of these operations, and two-thirds of the $51 million per year U.N. budget for the 1991-2003 Iraq-Kuwait Observer Mission (UNIKOM) that monitored the Iraq-Kuwait border. Kuwait also hosted U.S. forces en route to participate in Operation Enduring Freedom in Afghanistan. Operation Iraqi Freedom (OIF) and Post-Saddam Iraq . Kuwait supported the U.S. decision to militarily overthrow Saddam Hussein by hosting the bulk of the U.S. OIF force of about 250,000, as well as the other coalition troops that entered Iraq in March 2003. Kuwait closed off its entire northern half for weeks before the invasion; allowed U.S. use of two air bases, its international airport, and sea ports; and provided $266 million to support the combat. Kuwaiti forces did not enter Iraq. During 2003-2011, there were about 25,000 U.S. troops based in Kuwait, not including those deploying to Iraq, and Kuwait was the gateway for U.S. troops deploying to that war zone. According to Defense Department budget documents, Kuwait contributed about $210 million per year in similar in-kind support to help defray the costs incurred by the U.S. military personnel that rotated through Kuwait into or out of Iraq during 2003-2011. Kuwait has supported efforts to promote greater military coordination among the GCC countries, including the GCC decision in 2013 to form a joint military command. Kuwait has also sought cooperation with other non-Arab U.S. partners. In December 2011, NATO and Kuwait began discussing opening a NATO center in Kuwait City as part of the Istanbul Cooperation Initiative (ICI) initiated in 2004. Kuwait joined the ICI in December 2004. The NATO center, formally titled the NATO-ICI Regional Center, opened on January 24, 2017, in a formal ceremony attended by NATO Secretary-General Jens Stoltenberg. On October 1, 2018, the NATO-ICI Regional Center held its first annual meeting to review the center's performance, discussing programs including maritime security, cybersecurity, and protection against the use of weapons of mass destruction. On November 26, 2018, Kuwait opened a diplomatic office at NATO. In late November 2017, Kuwait signed an agreement with France to strengthen their defense cooperation. In November 2018, the two countries held ground forces exercises in Kuwait. As do the other manpower-short GCC states, Kuwait has enlisted some military help from Pakistan; in April 2014, Kuwait set up an office in Pakistan to recruit Pakistani trainers for Kuwaiti soldiers. U.S. arms sales to Kuwait are intended, at least in part, to promote interoperability with U.S. forces. Kuwait is considered a wealthy state that can fund its own purchases. Kuwait has, in some years, received small amounts of U.S. assistance in order to qualify Kuwait for a discount to send its officers for training in the United States. As part of the U.S. effort to promote U.S. defense relations with the GCC as a whole, rather than individually, a December 16, 2013, Presidential Determination authorized U.S. defense sales to the GCC. U.S. arms sales have sought to enhance Kuwait's capability and the interoperability of its military with U.S. forces. Because of its ample financial resources, Kuwait is not eligible to receive U.S. excess defense articles. Major U.S. Foreign Military Sales (FMS) include the following: Missile Defense System s . In 1992, Kuwait bought five Patriot antimissile fire units, which were delivered by 1998. The system intercepted Iraqi missiles during the 2003 Iraq War. In July 2012, the Administration notified a sale of 60 Patriot Advanced Capability ("PAC-3") missiles and 20 Patriot launching stations, plus associated equipment, valued at $4.2 billion. Kuwait has not announced whether it will buy the more sophisticated Theater High Altitude Air Defense (THAAD) missile defense system that the United States has offered to the Gulf states. The United States also has deployed four U.S.-owned Patriot systems in Kuwait since the 1991 Gulf War, but the United States announced on September 26, 2018, that it was redeploying that system, as well as U.S. Patriots in Bahrain and Jordan, to areas pertinent to U.S. strategic competition with Russia and China. Combat Aircraft /F-18s . The core of Kuwait's fleet of combat aircraft is 40 F/A-18 combat aircraft Kuwait bought in 1992. In mid-2015, Kuwait asked to buy up to 40 additional F/A-18s, and the following year expressed frustration at delays in the DOD approval process, threatening to buy 28 Eurofighters instead. The Obama Administration notified to Congress on November 17, 2016, the potential sale of up to 32 F-18s to Kuwait along with support, equipment, and training. On November 28, 2016, U.S. officials stated that Kuwait had proceeded to order 28 of the jets—an agreement with a value of $5 billion. Tanks . In 1993, Kuwait bought 218 M1A2 tanks at a value of $1.9 billion. Delivery was completed in 1998. On October 16, 2017, the Defense Security Cooperation Agency notified Congress of a determination to sell Kuwait new tank hulls, armament, and engines for its U.S.-made tank force, at an estimated sale value of $29 million. Apache Helicopters . In September 2002, Kuwait ordered 16 AH-64 (Apache) helicopters equipped with the Longbow fire-control system, valued at about $940 million. Kuwait reportedly is seeking to buy additional Apaches. Tactical Missiles . In 2008, Kuwait bought 120 AIM-120C-7 Advanced Medium Range Air-to-Air Missiles (AMRAAM), along with equipment and services, with a total value of $178 million. In February 2012, the Administration notified Congress of a sale of 80 AIM-9X-2 SIDEWINDER missiles and associated parts and support, with an estimated value of $105 million. On July 30, 3018, DSCA notified Congress of a potential sale to Kuwait of 300 Hellfire air-to-ground missiles, with an estimated value of $30.4 million. Kuwait already has Hellfires in its inventory, according to DSCA. DSCA announced in June 2014, that Kuwait would fund $1.7 billion for the U.S. Army Corps of Engineers to build a Kuwait Armed Forces Hospital. In December 2015 Kuwait's government asked the National Assembly to approve $20 billion in additional funds for arms purchases. The funds will presumably pay for the F-18s Kuwait has ordered, as well as for additional U.S. Apache helicopters, French naval vessels and light armored vehicles, and Russian-made missile systems and heavy artillery. In some past years, Kuwait received very small amounts of funding under the International Military Education and Training (IMET) program—for the primary purpose of earning Kuwait discounts on the training it pays for its officers to undergo in the United States. It received $19,000 in IMET in FY2007, $14,000 in FY2008, and $10,000 in FY2010. Approximately 200 Kuwaiti military personnel study intelligence, pilot training, and other disciplines at various U.S. military institutions. Kuwait spends a total of about $10 million per year on this program. After the United States, Kuwait's most important alliances are with the other GCC states. Kuwait has tended to act within a GCC consensus and to try to preserve GCC unity. Kuwaiti leaders argue for GCC unity as the optimal means for dealing with regional threats. Amir Sabah has been the key Gulf mediator of the intra-GCC rift that erupted in June 2017 when Saudi Arabia, UAE, and Bahrain—asserting that Qatar implements policies fundamentally at odds with other GCC states—broke relations with Qatar and denied it land, air, and sea access to their territories. Then-Secretary of State Rex Tillerson conducted unsuccessful "shuttle diplomacy" on the issue from Kuwait in July 2017. After Amir Sabah's meeting with President Trump in September 2017, President Trump brokered brief direct talks between Qatar's Amir and Saudi Arabia's heir apparent, Crown Prince Mohammad bin Salman Al Saud. Kuwait convened the annual GCC summit on December 4, 2017), but Amir Sabah adjourned it after a few hours. The rift reportedly was a focus of Amir Sabah's meeting with President Trump on September 5, 2018, but, with no apparent imminent resolution of the rift, the Administration has repeatedly postponed a U.S.-GCC summit planned first planned for early 2018. Kuwait's reluctance to adopt the Saudi/UAE/Bahrain hard-line position on Qatar reportedly caused the abbreviation of the visit of Saudi Crown Prince Mohammad bin Salman Al Saud to Kuwait on September 30, 2018—his first visit to a Gulf state since becoming Crown Prince. In support of a resolution of the rift, Kuwait hosted the military chiefs of staff of the GCC, Egypt, and Jordan, as well as the commander of U.S. Central Command, on September 12, 2018. Kuwait did not join Saudi Arabia, Bahrain, and UAE in withdrawing their ambassadors from Qatar for several months in 2014 over similar issues. Kuwait has sometimes acted militarily to defend GCC leaderships. Kuwait sent a naval unit to support the March 14, 2011, intervention of the GCC's "Peninsula Shield" unit to assist Bahraini security forces, but did not send ground troops into Bahrain. The Kuwaiti naval unit departed in July 2011. Kuwait's involvement came despite opposition from some Kuwaiti Shias. Kuwait has built political ties to the Shia-dominated government in Iraq in order to move beyond the legacy of the Saddam era invasion of Kuwait and to prevent any Iraqi Shia-led violence in Kuwait such as occurred in the 1980s. On July 18, 2008, Kuwait named its first ambassador to Iraq since the 1990 Iraqi invasion. On January 12, 2011, then-Prime Minister Nasser became the first Kuwait Prime Minister to visit Iraq since the 1990 invasion. Then-Iraqi Prime Minister Nuri al-Maliki visited Kuwait in 2011 and 2012, paving the way for Amir Sabah's attendance at the March 27-29, 2012, Arab League summit in Baghdad that marked Iraq's return to the Arab fold. The speaker of Kuwait's National Assembly visited Iraq on February 28, 2019, to mark the anniversary of the liberation from the Iraqi invasion. As part of its outreach to post-Saddam Iraq, Kuwait ran a humanitarian operation center (HOC) that gave over $550 million in assistance to Iraqis from 2003 to 2011. In 2008, Kuwait hosted a regional conference on Iraq's stability attended by the United States and Iran. In 2018, Kuwait held a conference that raised $30 billion for Iraq reconstruction to help it recover from the Islamic State challenge. Some residual issues from the Iraqi invasion remain. In August 2012, the Iraqi government vowed to "end all pending issues with Kuwait before the start of [2013]"—a statement that furthered Iraq's argument that the U.N. Security Council should remove any remaining "Chapter 7" (of the U.N. Charter) mandates on Iraq stemming from the invasion. During a visit to Iraq by Kuwait's Prime Minister on June 12, 2013, the two countries agreed to take the issues of still-missing Kuwaitis and Kuwaiti property out of the Chapter 7 supervision of the United Nations and replace them with alternative mechanisms, as discussed below. On December 15, 2010, the U.N. Security Council passed three resolutions—1956, 1957, and 1958. These resolutions ended Saddam-era sanctions against Iraq, but did not end the "Chapter 7" U.N. mandate on Iraq and continued the 5% automatic revenue deductions for reparations payments, discussed below. Reparations Payments . Until 2014, 5% of Iraq's oil revenues were devoted to funding a U.N. escrow account that, since 1991, has been compensating the victims of the Iraqi invasion of Kuwait. The U.N. Compensation Commission (UNCC), created by the post-Desert Storm U.N. resolutions, paid out about $52 billion awarded to over 100 governments and 1.5 million individual claimants by the time it ended in April 2015. As of that time, the process had paid $48 billion of that amount, leaving only about $4.6 billion left to be paid—the last remaining amount due from the $14.7 billion awarded for damage to Kuwaiti oilfields during the Iraqi occupation. In 2014, the UNCC, accounting for Iraqi budget shortfalls, extended the deadline for Iraq to make the final payments to early 2016. In 2015, Kuwait extended that deadline until 2018, and Iraq paid Kuwait $90 million in April 2018. The two countries agreed to retire the remaining balance through the payment of 1.5% of Iraq's oil revenues in 2019, and 3% in each of 2020 and 2021. However, budgetary difficulties in Iraq have caused Iraq's new government to request in November 2018 that Kuwait agree to another suspension of the payments. Missing Kuwaitis and Kuwaiti National Archives . The U.N. resolutions adopted in December 2010 also continued the effort, required under post-1991 war U.N. Security Council resolutions (primarily 687), to resolve the fate of the 605 Kuwaitis and third party nationals missing and presumed dead from the 1991 war, as well as that of the missing Kuwaiti national archives. A special U.N. envoy, Gennady Tarasov, was U.N. High-Level Coordinator for these issues. In September 2011 and in June 2012, Iraq called for an end to the mandate of that post and for Iraq and Kuwait to pursue the issue bilaterally. The June 16, 2013, visit of the Kuwaiti Prime Minister to Iraq—which followed progress on border demarcations issues—resulted in an Iraq-Kuwait joint recommendation to remove these issues of missing property and persons from the Chapter 7 U.N. mandate. That recommendation was endorsed in the U.N. Secretary-General's report of June 17, 2013. U.N. Security Council Resolution 2107 of June 27, 2013, abolished the High-Level Coordinator mandate and transferred the supervision of these issues to the U.N. Assistance Mission—Iraq (UNAMI)—under Chapter VI of the U.N. Charter. The search process has resulted in finding the remains of 236 Kuwaitis, to date. The cases of 369 Kuwaitis remain unresolved. Kuwait has been a donor to the Iraqi Ministry of Human Rights, which is the lead Iraqi agency trying to determine the fate of the Kuwaitis. More than 10,000 trenches have been dug to search for remains, and former members of Saddam's regime have been interviewed. In February 2019, a U.N. Security Council presidential statement urged reinvigoration of the process of determining the fate of the Kuwaiti missing, noting that no human remains had been exhumed since 2004. As far as the Kuwaiti National Archives, U.N. reports on December 14, 2012, and June 17, 2013, say there has been no progress locating the archives. However, Annex I to the June 17, 2013, report (U.N. document S/2013/357) contains a list of all the Kuwaiti property returned to Kuwait by Iraq since 2002. In June 2012, Iraq returned to Kuwait numerous boxes of tapes from Kuwait's state radio, books belonging to Kuwait University, and keys to Kuwait's Central Bank. In November 2018, visiting Iraqi President Barham Salih brought with him to Kuwait some Kuwaiti archival material that had been found. Kuwait-Iraq Border. Disputes over the Iraq-Kuwait border, some of which apparently were a factor in Iraq's 1990 invasion of Kuwait, have been mostly resolved. Under post-1991 Gulf War U.N. Security Council Resolution 833, the Council accepted the U.N.-demarcated border between them. Kuwait insisted that post-Saddam Iraqi governments formally acknowledge Iraq's commitments under that resolution to pay some of the costs of border markings and signs. As a consequence of the March 2012 Maliki visit to Kuwait, Iraq agreed to pay its portion of the costs of maintaining the border markings, and sea border markings and related issues were resolved in 2013. In 2017, Iraq ceded to Kuwait greater access to the shared Khor Abdullah waterway. Other Outstanding Bilateral Disputes /Iraqi Airways . Kuwait has not forgiven about $25 billion in Saddam-era debt, but Kuwait does not appear to be pressing the Iraqi government for payment. The March 2012 Maliki visit resolved Kuwait Airways' assertion that Iraq owed Kuwait $1.2 billion for planes and parts stolen during the Iraqi invasion with agreement for Iraq to pay Kuwait $300 million in compensation, and to invest $200 million in an Iraq-Kuwait joint airline venture. Subsequent to the visit, Iraq-Kuwait direct flights resumed. Threat from Iraqi Extremist Groups . Kuwait remains wary of pro-Iranian Shia militia groups operating in Iraq, most of which grew out of pro-Iranian anti-Saddam elements. The December 1983 bombings of the U.S. and French embassies in Kuwait and an attempted assassination of the Amir in May 1985 were attributed to the Iran-inspired Iraqi Da'wa (Islamic Call) Party, composed of Shias. Seventeen Da'wa activists were arrested for those attacks, and Da'wa activists hijacked a Kuwait Airlines plane in 1987. Da'wa is the party that two of Iraq's previous prime ministers headed, although the party disbanded its militia wing long ago. In July 2011, the Iran-supported militia of Shia cleric Moqtada Al Sadr rocketed Kuwait's embassy in Iraq. Kuwait has undertaken consistent high-level engagement with Iran, reflecting a legacy of Kuwait's perception of Iran as a counterweight to Saddam Hussein's Iraq. After 1991, Kuwait often hosted pro-Iranian anti-Saddam Iraqi Shia oppositionists for talks, even though some of these same groups had conducted attacks in Kuwait in the 1980s. Amir Sabah visited Iran in June 2014, including meetings with Iran's Supreme Leader, Ayatollah Ali Khamene'i. Iran's President Hassan Rouhani visited Kuwait and Oman in February 2017, in conjunction with Kuwait's role as a mediator in an unsuccessful attempt to establish a broader Iran-GCC dialogue. Like the other GCC states, and despite engaging Iranian leaders, Kuwaiti leaders support U.S. efforts to reduce Iran's efforts to expand its influence in the region, while supporting continued implementation of the 2015 Iran nuclear agreement (Joint Comprehensive Plan of Action, JCPOA) to curb Iran's nuclear program. Kuwait has also purchased missile defense equipment that supports U.S. efforts to forge a joint GCC missile defense network against Iran, and it participates in all U.S.-led military exercises in the Persian Gulf. Kuwait enforces all U.S. sanctions against Iran, and it has not pursued a long-discussed plan to import Iranian natural gas. In January 2016, Kuwait downgraded relations with Iran over the sacking of Saudi diplomatic facilities in Tehran and Mashhad by demonstrators protesting the Saudi execution of dissident Saudi Shia cleric Nimr al Baqr Al Nimr. Kuwait recalled its Ambassador from Iran but it did not follow Saudi Arabia and Bahrain in breaking relations. In September 2018, Kuwait rebuffed Iranian entreaties to return its ambassador to Tehran. Amir Sabah represented Kuwait at the May 13-14, 2015, and April 21, 2016, U.S.-GCC summits in Camp David and in Riyadh respectively, during which then-President Obama reassured the GCC states of the U.S. commitment to Gulf security. Kuwait's Foreign Ministry reacted to the Trump Administration's May 8, 2018, announcement of its exit from the JCPOA by expressing "understanding" that U.S. suggestions for improving the accord were not adopted. Kuwaiti officials have indicated the country will join the U.S.-backed Middle East Strategic Alliance to counter Iran, if such a bloc is formed. Kuwait has been vigilant in preventing Iran from undermining security inside Kuwait. In 2010, Kuwait arrested some Kuwaiti civil servants and stateless residents for allegedly helping the Qods Force of the Islamic Revolutionary Guard Corps (IRGC-QF) of Iran (the IRGC unit that supports pro-Iranian movements in the region) plot to blow up Kuwaiti energy facilities. In September 2015, Kuwait arrested 25 Kuwaiti Shias and 1 Iranian who had reportedly hidden explosives near the border with Iraq. In January 2016, a criminal court sentenced 2 of the defendants, including the Iranian (in absentia), to death, and 12 to prison terms. Another 12 were acquitted. Kuwait joined the U.S.-led coalition against the Islamic State, along with the other GCC states, in September 2014. It has hosted the operational headquarters for Operation Inherent Resolve (OIR). "ARCENT"—the U.S. Army component of U.S. Central Command—is based in Kuwait, and the ARCENT commander serves as overall U.S. commander of OIR. Kuwait also has allowed Canada and Italy to base reconnaissance and combat aircraft in Kuwait for their participation in OIR. Unlike some of the other GCC states, Kuwait did not conduct any air operations against Islamic State forces in Syria. No GCC state deployed ground forces to Syria or Iraq, and Kuwaiti officials say the government does not fund or arm any rebel groups fighting in Syria. Kuwait's leaders asserted that Syrian President Bashar Al Asad should leave office and, along with the other GCC states, Kuwait closed its embassy in Damascus in 2012. In December 2014, Kuwait allowed Syria to reopen its embassy in Kuwait to perform consular services for the approximately 140,000 Syrians living there. Kuwait has focused on helping civilian victims of the conflicts in Syria and Iraq, including hosting several major donors' conferences for victims of the Syria and cochairing a donors' conference for victims of the conflict, held on April 4-5, 2017, in Brussels. It has provided over $9 billion in humanitarian support for this purpose, making Kuwait the largest single country donor to these efforts after the United States. All of Kuwait's donations have been composed mostly of donations to nine U.N. agencies and to the International Committee of the Red Cross (ICRC). Kuwait hosts about 145,000 Syrians who fled that conflict. In October 2018, Kuwait joined Saudi Arabia and the UAE in finalizing a $2.5 billion donation to Jordan to help it cope with the financial burdens of hosting Syrian and Iraqi refugees. The refugees are an economic burden that likely contributed to protests in Jordan over unemployment, rising prices, and the imposition of additional income taxes. After an Arab Spring-related uprising in Yemen in 2011, Kuwait and its GCC allies brokered a transition that led to the departure of longtime President Ali Abdullah Saleh in January 2012. However, the elected government of Abdu Rabbu Mansour Al Hadi fled in January 2015 under pressure from Iran-backed Zaydi Shia Houthi rebels. In 2015, Kuwait joined the Saudi-led combat against the Houthis to try to restore the Hadi government. In part because of its willingness to engage diplomatically with Iran, the key backer of the Houthis, and its membership in the GCC, since 2016 Kuwait has hosted U.N.-mediated talks between the warring sides. In July 2016, Kuwait issued an ultimatum to the two warring sides in the Yemen conflict to negotiate a resolution to the conflict by the conflict by the following month, but the maneuver was unsuccessful. Rouhani's visit to Kuwait in February 2017 was intended, at least in part, to explore potential cooperation between Iran and the GCC to resolve the Yemen conflict. Kuwait has generally acted in concert with—although not always as assertively as—other GCC states on regional issues that have stemmed from post-2011 unrest in the region. Kuwait adopted a position on Egypt's internal struggles that was similar to that of Saudi Arabia and UAE, but at odds with Qatar, which was a major benefactor of Egypt during the presidency of Muslim Brotherhood senior figure Mohammad Morsi. Kuwaiti leaders, as do those of Saudi Arabia and the UAE, assert that the Brotherhood in Egypt supports Brotherhood-linked oppositionists in the GCC. Since Morsi was deposed by the Egyptian military in July 2013, Kuwait has given at least $8 billion to Egypt in grant, loans, and investments, and has arrested and deported some Egyptians in Kuwait for conducting (pro-Muslim Brotherhood) political activities. Still, Kuwaiti leaders assert that differences over the Brotherhood do not justify the Saudi-led ostracism of Qatar. For many years after the 1990 Iraqi invasion, Kuwait was at odds with then-Palestinian leader Yasir Arafat for opposing war to liberate Kuwait. Kuwait sought to punish the Palestinian leadership by expelling about 450,000 Palestinian workers from Kuwait and building ties to Hamas, a rival to Arafat's Palestine Liberation Organization (PLO). That tilt was demonstrated again in June 2018 when Kuwait circulated a draft U.N. Security Council resolution calling for an international force at the Gaza border to protect pro-Hamas demonstrators who confronted Israeli forces at the border in March 2018. However, Kuwait remains staunchly critical of Israel. in line with the positions of the other GCC and Arab states, Kuwait has supported U.N. recognition of a Palestinian State and opposed the Trump Administration's recognition that Israel's capital is in Jerusalem. Kuwait's Foreign Ministers attended the U.S.-sponsored Middle East conference in Warsaw, Poland during February 13-14, 2019, during which the Arab states attending held discussions on regional topics, particularly Iran, alongside Israeli Prime Minister Benjamin Netanyahu. However, Kuwaiti officials denied that their participation indicated that they would follow the lead of Oman, UAE, and Saudi Arabia in building increasingly public ties to Israel's government. Kuwait's foreign minister visited the Old City of Jerusalem in September 2014, but the Kuwaiti government asserted it did not coordinate the visit with Israeli officials and that the Old City represents a part of Palestine that is occupied. In 2018, Kuwait used its seat on the U.N. Security Council to block U.S.-backed efforts to censure PA President Mahmoud Abbas for an anti-Semitic speech, and it blocked U.S. condemnation of Hamas attacks on Israel. In 2018, Kuwait pledged $50 million for the United Nations Relief and Works Agency (UNRWA) in part to compensate the agency for reduced U.S. donations. As part of U.S.-led Israeli-Palestinian peace process negotiations, during 1992 to 1997, Kuwait attended—but did not host—multilateral working group talks with Israel on arms control, water resources, refugees, and other issues. In 1994, Kuwait helped persuade the other Gulf monarchies to cease enforcement of the secondary (trade with firms that deal with Israel) and tertiary (trade with firms that do business with blacklisted firms) Arab boycotts of Israel. However, Kuwait did not, as did Qatar and Oman, subsequently exchange trade offices with Israel, and it retained the Arab League boycott on trade with Israel ("primary boycott"). As do several other GCC states, Kuwait has had a significant number of North Korean laborers working in Kuwait (about 3,000), whose earnings are mostly remitted to the North Korean government. In concert with increased U.S. pressure on North Korea in 2017 for its missile and nuclear tests, Kuwait curtailed its relationship with North Korea. On September 17, 2017, after a meeting between the Amir and President Trump, Kuwait gave North Korea's ambassador (the only North Korean ambassador in the Gulf) and four other North Korean diplomats 30 days to leave Kuwait. North Korea's embassy in Kuwait City subsequently remains open but with only four staff persons, including a charge d'affaires. Kuwait also ceased renewing visas for North Korean workers, causing them to start leaving, and it halted trade ties and direct flights between Kuwait and North Korea. Kuwait has prevented most, but not all, terrorist attacks by the Islamic State and other groups, since an attack on a mosque in Kuwait City on June 26, 2015, killed 27 persons. A local branch of the Islamic State claimed responsibility. In July 2016, Kuwait said its security forces thwarted three planned Islamic State terrorist attacks in Kuwait, including a plot to blow up a Shia mosque. On October 10, 2016, an Islamic State-inspired individual of Egyptian origin drove a truck into a vehicle carrying U.S. military personnel, but no U.S. personnel were injured or killed. In April 2017, a suspected mid-ranking leader of the Islamic State was extradited from the Philippines to Kuwait for involvement in operational planning to attack Kuwait. U.S. agencies help Kuwait's counterterrorism efforts, border control, and export controls. Recent State Department fact sheets on security cooperation with Kuwait, referenced earlier, state that Kuwait's Ministry of Interior and National Guard participate in U.S. programs to work with local counterterrorism units via training and bilateral exercises. At the September 8, 2017, U.S.-Kuwait Strategic Dialogue meeting in Washington, DC, Kuwait's Ministry of Interior signed a counterterrorism information sharing arrangement with the U.S. Federal Bureau of Investigation (FBI). And, the U.S. Customs and Border Control signed an agreement to share customs information with Kuwait's director general of customs. Kuwait also has ratified a Saudi-led GCC "Internal Security Pact" to enhance regional counterterrorism cooperation. In April 2011, Kuwait introduced biometric fingerprinting at Kuwait International Airport and has since extended that system to land and sea entry points. Kuwait long sought the return of two prisoners held at the U.S. facility in Guantanamo Bay, Cuba, under accusation of belonging to Al Qaeda. Both were returned to Kuwait by January 2016. Kuwait built a rehabilitation center to reintegrate them into society after their return. The State Department report on international terrorism for 2017, cited above, contains praise for recent Kuwait government steps to counter the financing of terrorism. The report praises Kuwait's October 2017 announcement, with the GCC and the United States, of 13 terrorist designations of individuals associated with the Islam State-Yemen and Al Qaeda in the Arabian Peninsula (AQAP). The report also cites the Central Bank of Kuwait for implementing a "same business-day" turnaround policy for imposing U.N. terrorist financing-related sanctions, requiring Kuwaiti banks to monitor U.N. sanctions lists proactively. Kuwait is a member of the Middle East North Africa Financial Action Task Force (MENAFATF), and many of the steps that Kuwait has taken to address the criticism were the product of an action plan Kuwait developed with the broader FATF to address Kuwait's weaknesses on anti-money laundering and counterterrorism financing (AML/CTF). A law Kuwait enacted in 2013 provided a legal basis to prosecute terrorism-related crimes and freeze terrorist assets. In May 2014, the Ministry of Social Affairs warned Kuwaiti citizens that the fundraising campaigns for Syrian factions were a violation of Kuwait law that requires that financial donations only go to authorized charity organizations. As of mid-2014, Kuwait has been no longer deemed deficient on AML/CFT by the FATF. In June 2015, the National Assembly passed a law that criminalized online fundraising for terrorist purposes. In 2017, Kuwait joined two counter terrorism-financing conventions, the Egmont Group and the U.S.-GCC "Terrorist Financing Targeting Center." Still, Kuwait's record on this issue has been mixed. Kuwaiti donors have been able, in recent years, to raise funds for various regional armed factions, including the Al Qaeda affiliate Al Nusra Front operating in Syria (which publicly severed its connection to Al Qaeda and changed its name in August 2016). The then-Under Secretary for Terrorism and Financial Intelligence of the Department of the Treasury said on March 4, 2014, that the appointment of a leading Kuwaiti donor to Al Nusra, Nayef al-Ajmi, as Minister of Justice and Minister of Islamic Endowments (Awqaf), was "a step in the wrong direction." Subsequently, Ajmi resigned his government posts. On August 6, 2014, the Treasury Department imposed sanctions on two Ajmi tribe members and one other Kuwaiti under Executive Order 13224 sanctioning support for international terrorism. Two Kuwaitis were sanctioned by the United Nations Security Council for allegedly providing financial support to Al Nusra Front, and the Treasury Department sanctioned a Kuwaiti person in March 2017 under E.O 13324 for providing support to Al Nusrah Front and Al Qaeda. Earlier, in June 2008, the Department of the Treasury froze the assets of a Kuwait-based charity—the Islamic Heritage Restoration Society—for alleged links to Al Qaeda, under E.O. 13224. The United States has, at times, provided very small amounts of aid to help Kuwait counter terrorism financing. In FY2013, about $83,000 was provided to training Kuwaiti authorities on methods to counter terrorism financing. In FY2015, about $100,000 was provided for similar purposes. Countering Violent Extremism . State Department terrorism reports also praise Kuwait's programs to encourage moderation in Islam in Kuwait. The government supports a number of local counter-messaging campaigns on radio, television, and billboards. In late 2015, the government moved a "Center for Counseling and Rehabilitation" from Central Prison to a new facility with an expanded faculty and broadened mandate. In July 2017, the government established a new Directorate for Cybersecurity within the Higher Authority for Communication to "fight violent extremism." Political infighting and the drop in oil prices since 2014 have affected Kuwait's economy, but the country is taking steps to try to reduce its economic vulnerability. Hydrocarbons sales still represent about 90% of government export revenues and about 60% of its gross domestic product (GDP). Because Kuwait requires that crude oil sell for about nearly $75 per barrel to balance its budget—well above prices for most of the time since 2014—Kuwait has run budget deficits of about $15 billion per year since 2015. Kuwait deferred capital infrastructure investment and reduced public sector salaries and subsidies, according to the IMF and other observers. Subsidy reductions were contemplated even before the decline in oil prices: in October 2013, Prime Minister Jabir said the subsidies system—which cost the government about $17.7 billion annually—had produced a "welfare state" and was "unsustainable" and must be reduced. On the other hand, Kuwait still has a large sovereign wealth fund, managed by the Kuwait Investment Authority, with holdings estimated at nearly $600 billion. Kuwait, which produces about 3 million barrels per day of crude oil, agreed to slightly reduce its crude oil production (by 130,000 barrels per day) as part of a November 2016 OPEC production cut agreement that remains in effect. Kuwait and Saudi Arabia, including during a September 30, 2018, visit to Kuwait by Saudi Crown Prince Mohammad bin Salman Al Saud, discussed jointly increasing production by 500,000 barrels per day by reactivating two closed fields in their joint "neutral zone." The Khafji field closed in October 2014 due to environmental concerns and the Wafra field closed in May 2015 over technical issues. However, the Crown Prince's visit did not result in any announced agreement to resume production at the two fields. Using National Assembly legislation that took effect in 2010, the government has moved forward with long-standing plans to privatize some state-owned industries. However, the privatization of Kuwait Airways was cancelled, despite the passage of legislation in January 2014 authorizing that privatization, in part because of opposition from the airline's workforce. Political disputes also delayed movement on several major potential drivers of future growth, most notably opening Kuwait's northern oil fields to foreign investment to generate about 500,000 barrels per day of extra production. The Assembly blocked the $8.5 billion project for over 15 years because of concerns about Kuwait's sovereignty. However, a fourth oil refinery, estimated to cost $8 billion, is under construction and is scheduled to open in 2019. At an investment forum in March 2018, Kuwait announced a vision to attract foreign direct investment through development of a large "Northern Gateway" economic opportunity zone encompassing five natural islands in northern Kuwait. That project has since been retitled "Silk City," after attracting investment from China as part of that country's region-wide Belt and Road Initiative (BRI). The project, which might involve almost $90 billion in total investment, will encompass a new airport, railways, and port facilities. Kuwait and China have formed a $10 billion "Kuwait-China Silk Road Fund" to finance initial stages of the expansion. The development of the northern reaches of Kuwait is part of the country's overall "New Kuwait 2035" economic strategy. Nuclear Power. Like other Gulf states, Kuwait sees peaceful uses of nuclear energy as important to its economy, although doing so always raises fears among some in the United States, Israel, and elsewhere about the ultimate intentions of developing a nuclear program. In 2012, Kuwait formally abandoned plans announced in 2011 to build up to four nuclear power reactors. The government delegated any continuing nuclear power research to its Kuwait Institute for Scientific Research (KISR). Kuwait is cooperating with the International Atomic Energy Agency (IAEA) to ensure international oversight of any nuclear work in Kuwait. In FY2015, the United States provided about $38,000 to help train Kuwaiti personnel in nuclear security issues, and about $58,000 was provided in FY2016 for this purpose. In 1994, Kuwait became a founding member of the World Trade Organization (WTO). In February 2004, the United States and Kuwait signed a Trade and Investment Framework Agreement (TIFA), often viewed as a prelude to a free trade agreement (FTA), which Kuwait has said it seeks. In the course of the September 8, 2017, U.S.-Kuwait Strategic Dialogue, the U.S. Department of Commerce finalized a memorandum of understanding with Kuwait's Direct Investment Promotion Authority to encourage additional investments in both countries. Kuwait gave $500 million worth of oil to U.S. states affected by Hurricane Katrina. The United States' imports of oil from Kuwait have been declining as U.S. oil imports have declined generally. The United States imports about 100,000 barrels per day of crude oil from Kuwait, as of mid-2018. Total U.S. exports to Kuwait were about $5.1 billion in 2017, and total U.S. imports from Kuwait in 2017 were about $3 billion. Based on figures through November 2018, U.S. exports to Kuwait in 2018 were only about half of what they were the prior year, and imports from Kuwait fell by about 25% in that time period. U.S. exports to Kuwait consist mostly of automobiles, industrial equipment, and foodstuffs. Following his meeting with Amir Sabah on September 7, 2017, President Trump stated that Kuwait had taken delivery of 10 U.S.-made Boeing 777 commercial passenger aircraft in 2017, which might account for the spike in U.S. export figures to Kuwait in 2017. Because Kuwait's per capita GDP is very high, Kuwait receives negligible amounts of U.S. foreign assistance. The assistance Kuwait does receive is targeted to achieve selected objectives that benefit U.S. national security, including promoting civil society, and training on nuclear security and counterterrorism financing. In FY2016, about $3,000 was provided for counternarcotics programs in Kuwait.
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Kuwait has been pivotal to the decades-long U.S. effort to secure the Persian Gulf region because of its consistent cooperation with U.S. military operations in the region and its key location in the northern Gulf. Kuwait and the United States have a formal Defense Cooperation Agreement (DCA), under which the United States maintains over 13,000 military personnel in country and prepositioned military equipment in Kuwait to project power in the region. Only Germany, Japan, and South Korea host more U.S. troops than does Kuwait, which hosts the operational command center for U.S.-led Operation Inherent Resolve (OIR) that has combatted the Islamic State. Kuwait usually acts in concert not only with the United States but also with allies in the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain, and Oman). Kuwait is participating militarily in the Saudi-led coalition that is trying to defeat the Shia "Houthi" rebel movement in Yemen, but Kuwait tends to favor mediation of regional issues over the use of military force. Kuwait is trying to mediate a resolution of the intra-GCC rift that erupted in June 2017 when Saudi Arabia and the UAE moved to isolate Qatar. Kuwait has refrained from intervening in Syria's civil war, instead hosting donor conferences for victims of the Syrian civil conflict, Iraq's recovery from the Islamic State challenge, and the effects of regional conflict on Jordan's economy. Kuwait generally supports U.S. efforts to counter Iran and has periodically arrested Kuwaiti Shias that the government says are spying for Iran, but it also engages Iran at high levels. U.S. government reports have praised recent steps by Kuwait to counter the financing of terrorism, but reports persist that wealthy Kuwaitis are still able to donate to extreme Islamist factions in the region. Kuwait has consistently engaged the post-Saddam governments in Baghdad in part to prevent any repeat of the 1990 Iraqi invasion of Kuwait. Experts have long assessed Kuwait's political system as a potential regional model for its successful incorporation of secular and Islamist political factions, both Shia and Sunni. However, this assessment has evolved since 2011 because Kuwait has followed other GCC states in incarcerating and revoking the citizenship of social media and other critics. Kuwait's political stability has not been in question but long-standing parliamentary opposition to the ruling Sabah family's political dominance has broadened in recent years to visible public pressure for political and economic reform. Parliamentary elections in July 2013 produced a National Assembly amenable to working with the ruling family, but the subsequent elections held in November 2016 returned to the body Islamist and liberal opponents of the Sabah family who held sway in earlier assemblies. Assembly oppositionist challenges to government policy led to a cabinet resignation in early November 2017, although the current cabinet does not differ much from the previous cabinet on key policy questions. Kuwait has increased its efforts to curb trafficking in persons over the past few years. Years of political paralysis contributed to economic stagnation relative to Kuwait's more economically vibrant Gulf neighbors such as Qatar and the United Arab Emirates (UAE). Like the other GCC states, Kuwait has struggled with reduced income from oil exports during 2014-2018. Kuwait receives negligible amounts of U.S. foreign assistance, and has offset some of the costs of U.S. operations in the region since Iraq's 1990 invasion of Kuwait.
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Colombia, one of the oldest democracies in the Western Hemisphere and the third most populous Latin American country, has endured a multisided civil conflict for more than five decades until President Juan Ma nuel Santos declared the conflict over in August 2017 at the end of a U.N.-monitored disarmament. According to the National Center for Historical Memory 2013 report, presented to the Colombian government as part of the peace process to end the fighting, some 220,000 Colombians died in the armed conflict through 2012, 81% of them civilians. The report also provided statistics quantifying the scale of the conflict, which has taken a huge toll on Colombian society: more than 23,000 selective assassinations between 1981 and 2012; internal displacement of more than 5 million Colombians due to land seizure and violence; 27,000 kidnappings between 1970 and 2010; and 11,000 deaths or amputees from anti-personnel land mines laid primarily by Colombia's main insurgent guerrilla group, the Revolutionary Armed Forces of Colombia (FARC). To date, more than 8 million Colombians, or roughly 15% of the population, have registered as conflict victims. Although the violence has scarred Colombia, the country has achieved a significant turnaround. Once considered a likely candidate to become a failed state, Colombia, over the past two decades, has overcome much of the violence that had clouded its future. For example, between 2000 and 2016, Colombia saw a 94% decrease in kidnappings and a 53% reduction in homicides (below 25 per 100,000 in 2016). Coupled with success in lowering violence, Colombia has opened its economy and promoted trade, investment, and growth. Colombia has become one of Latin America's most attractive locations for foreign direct investment. Yet, after steady growth over several years, Colombia's economy slowed to 3.1% growth in 2015 and declined to 1.7% in 2017. Many analysts identified Colombia's dependence on oil and other commodity exports as the primary cause. Between 2012 and 2016, the Colombian government held formal peace talks with the FARC, Colombia's largest guerrilla organization. Upon taking office for a second term in August 2014, President Santos declared peace, equality, and education as his top priorities, although achieving the peace agreement remained his major focus. In August 2016, the government and FARC negotiators announced they had concluded their talks and achieved a 300-page peace agreement. The accord was subsequently narrowly defeated in a popular referendum held in early October 2016, but was revised by the Santos government and agreed to by the FARC and then ratified by the Colombian Congress at the end of November 2016. The Colombian conflict predates the formal founding of the FARC in 1964, as the FARC had its beginnings in the peasant self-defense groups of the 1940s and 1950s. Colombian political life has long suffered from polarization and violence based on the significant disparities and inequalities suffered by landless peasants in the country's peripheral regions. In the late 19 th century and a large part of the 20 th century, the elite Liberal and Conservative parties dominated Colombian political life. Violence and competition between the parties erupted in a period of extreme violence in Colombia, known as La Violencia , set off in 1948 by the assassination of Liberal presidential candidate Jorge Gaitán. The violence continued for the next decade. After a brief military rule (1953-1958), the Liberal and Conservative parties agreed to a form of coalition governance, known as the National Front. Under the arrangement, the presidency of the country alternated between Conservatives and Liberals, each holding office in turn for four-year intervals. This form of government continued for 16 years (1958-1974). The power-sharing formula did not resolve the tension between the two historic parties, and many leftist, Marxist-inspired insurgencies took root in Colombia, including the FARC, launched in 1964, and the smaller National Liberation Army (ELN), which formed the following year. The FARC and ELN conducted kidnappings, committed serious human rights violations, and carried out a campaign of terrorist activities to pursue their goal of unseating the central government in Bogotá. Rightist paramilitary groups formed in the 1980s when wealthy ranchers and farmers, including drug traffickers, hired armed groups to protect them from the kidnapping and extortion plots of the FARC and ELN. In the 1990s, most of the paramilitary groups formed an umbrella organization, the United-Self Defense Forces of Colombia (AUC). The AUC massacred and assassinated suspected supporters of the insurgents and directly engaged the FARC and ELN in military battles. The Colombian military has long been accused of close collaboration with the AUC, accusations ranging from ignoring their activities to actively supporting them. Over time, the AUC became increasingly engaged in drug trafficking, and other illicit businesses. In the late 1990s and early 2000s, the U.S. government designated the FARC, ELN, and AUC as Foreign Terrorist Organizations (FTOs). The AUC was formally dissolved in a collective demobilization between 2003 and 2006 after many of its leaders stepped down. However, former paramilitaries joined armed groups (called criminal bands, or Bacrim, by the Colombian government) who continued to participate in the lucrative drug trade and commit other crimes and human rights abuses. When the FARC demobilized in 2017, other illegally armed groups began aggressive efforts to take control of former FARC territory and its criminal enterprises as FARC forces withdrew. (For more, see " The Current Security Environment ," below.) The inability of Colombia's two dominant parties to address the root causes of violence in the country led to the election of an independent, Álvaro Uribe, in the presidential contest of 2002. Uribe, who served two terms, came to office with promises to take on the violent leftist guerrillas, address the paramilitary problem, and combat illegal drug trafficking. During the 1990s, Colombia had become the region's—and the world's—largest producer of cocaine. Peace negotiations with the FARC under the prior administration of President Andrés Pastrana (1998-2002) had ended in failure; the FARC used a large demilitarized zone located in the central Meta department (see map, Figure 1 ) to regroup and strengthen itself. The central Colombian government granted the FARC this demilitarized zone, a traditional practice in Colombian peace negotiations, but the FARC used it to launch terror attacks, conduct operations, and increase the cultivation of coca and its processing, while failing to negotiate seriously. Many analysts, noting the FARC's strength throughout the country, feared that the Colombian state might fail and some Colombian citizens thought the FARC might at some point successfully take power. The FARC was then reportedly at the apogee of its strength, numbering an estimated 16,000 to 20,000 fighters under arms. This turmoil opened the way for the aggressive strategy advocated by Uribe. At President Uribe's August 2002 inauguration, the FARC showered the event with mortar fire, signaling the group's displeasure at the election of a hardliner, who believed a military victory over the Marxist rebels was possible. In his first term (2002-2006), President Uribe sought to shore up and expand the country's military, seeking to reverse the armed forces' losses by aggressively combating the FARC. He entered into peace negotiations with the AUC. President Pastrana had refused to negotiate with the rightist AUC, but Uribe promoted the process and urged the country to back a controversial Justice and Peace Law that went into effect in July 2005 and provided a framework for the AUC demobilization. By mid-2006, some 31,000 AUC paramilitary forces had demobilized. The AUC demobilization, combined with the stepped-up counternarcotics efforts of the Uribe administration and increased military victories against the FARC's irregular forces, helped to bring down violence, although a high level of human rights violations still plagued the country. Uribe became widely popular for the effectiveness of his security policies, a strategy he called "Democratic Security." Uribe's popular support was evident when Colombian voters approved a referendum to amend their constitution in 2005 to permit Uribe to run for a second term. Following his reelection in 2006, President Uribe continued to aggressively combat the FARC. For Uribe, 2008 was a critical year. In March 2008, the Colombian military bombed the camp of FARC's second-in-command, Raul Reyes (located inside Ecuador a short distance from the border), killing him and 25 others. Also in March, another of FARC's ruling seven-member secretariat was murdered by his security guard. In May, the FARC announced that their supreme leader and founder, Manuel Marulanda, had died of a heart attack. The near-simultaneous deaths of three of the seven most important FARC leaders were a significant blow to the organization. In July 2008, the Colombian government dramatically rescued 15 long-time FARC hostages, including three U.S. defense contractors who had been held captive since 2003 and Colombian senator and former presidential candidate Ingrid Bentancourt. The widely acclaimed, bloodless rescue further undermined FARC morale. Uribe's success and reputation, however, were marred by several scandals. They included the "parapolitics" scandal in 2006 that exposed links between illegal paramilitaries and politicians, especially prominent members of the national legislature. Subsequent scandals that came to light during Uribe's tenure included the "false positive" murders allegedly carried out by the military (primarily the Colombian Army) in which innocent civilians were executed and then dressed to look like guerilla fighters to increase the military's rebel body count. In 2009, the media revealed another scandal of illegal wiretapping and other surveillance by the government intelligence agency, the Department of Administrative Security (DAS), to discredit journalists, members of the judiciary, and political opponents of the Uribe government. (In early 2012, the tarnished national intelligence agency was replaced by Uribe's successor, Juan Manuel Santos.) Despite the controversies, President Uribe remained popular and his supporters urged him to run for a third term in 2010. Another referendum was proposed to alter the constitution to allow a third term; however, it was turned down by Colombia's Constitutional Court. Once it became clear that President Uribe was constitutionally ineligible to run again, Juan Manuel Santos of the pro-Uribe National Unity party (or Party of the U) quickly consolidated his preeminence in the 2010 presidential campaign. Santos, a centrist, who came from an elite family that once owned the country's largest newspaper, had served as Uribe's defense minister through 2009. In 2010, Santos campaigned on a continuation of the Uribe government's approach to security and its role encouraging free markets and economic opening, calling his reform policy "Democratic Prosperity." In the May 2010 presidential race, Santos took almost twice as many votes as his nearest competitor, Antanas Mockus of the centrist Green Party, but he did not win a majority. Santos won the June runoff with 69% of the vote. Santos's "national unity" ruling coalition formed during his campaign included the center-right National Unity and Conservative parties, the centrist Radical Change Party, and the center-left Liberal party. On August 7, 2010, President Santos said in his first inauguration speech that he planned to follow in the path of President Uribe, but that "the door to [peace] talks [with armed rebels] is not locked." The Santos government was determined to improve relations with Ecuador and Venezuela, which had become strained under Uribe. Santos sought to increase cooperation on cross-border coordination and counternarcotics. He attempted to reduce tensions with Venezuela that had become fraught under Uribe, who claimed that Venezuelan President Hugo Chávez had long harbored FARC and ELN forces. During his first two years in office, President Santos reorganized the executive branch and built on the market opening strategies of the Uribe administration and secured a free-trade agreement with the United States, Colombia's largest trade partner, which went into effect in May 2012. To address U.S. congressional concerns about labor relations in Colombia, including the issue of violence against labor union members, the United States and Colombia agreed to an "Action Plan Related to Labor Rights" (Labor Action Plan) in April 2011. Many of the steps prescribed by the plan were completed in 2011 while the U.S. Congress was considering the free trade agreement. Significantly, the Santos government maintained a vigorous security strategy and struck hard at the FARC's top leadership. In September 2010, the Colombian military killed the FARC's top military commander, Victor Julio Suárez (known as "Mono Jojoy"), in a bombing raid. In November 2011, the FARC's supreme leader, Guillermo Leon Saenz (aka "Alfonso Cano") was assassinated. He was replaced by Rodrigo Londoño Echeverri (known as "Timoleón Jiménez" or "Timochenko"), the group's current leader. While continuing the security strategy, the Santos administration began to re-orient the Colombian government's stance toward the internal armed conflict through a series of reforms. The first legislative reform that moved this new vision along, signed by President Santos in June 2011, was the Victims' and Land Restitution Law (Victims' Law), to provide comprehensive reparations to an estimated (at the time) 4 million to 5 million victims of the conflict. Reparations under the Victims' Law included monetary compensation, psycho-social support and other aid for victims, and the return of millions of hectares of stolen land to those displaced. The law was intended to process an estimated 360,000 land restitution cases. The government's implementation of this complex law began in early 2012. Between 2011 and 2016, there were more than 100,000 applications for restitution and 5,000 properties, or about 5%, were resolved by judges. The Victims' Law, while not a land reform measure, tackled issues of land distribution including the restitution of stolen property to displaced victims. Given the centrality of land issues to the rural peasant-based FARC, passage of the Victims' Law was a strong indicator that the Santos government shared its interest in addressing land and agrarian concerns. In June 2012, another government initiative—the Peace Framework Law, also known as the Legal Framework for Peace—was approved by the Colombian Congress, which signaled that congressional support for a peace process was growing. In August 2012, President Santos announced he had opened exploratory peace talks with the FARC and was ready to launch formal talks. The countries of Norway, Cuba, Venezuela, and Chile each held an international support role, with Norway and Cuba serving as peace talk hosts and "guarantors." Following the formal start in Norway, the actual negotiations began a month later in mid-November 2012 in Cuba, where the FARC-government talks continued until their conclusion in August 2016. In the midst of extended peace negotiations, Colombia's 2014 national elections presented a unique juncture for the country. During the elections, the opposition Centro Democrático (CD) party gained 20 seats in the Senate and 19 in the less powerful Chamber of Representatives, and its leader, former President Uribe, became a popular senator. His presence in the Senate challenged the new ruling coalition that backed President Santos. During his second-term inaugural address in August 2014, President Santos declared three pillars—peace, equality, and education—as his focus, yet his top priority was to conclude the peace negotiations with the FARC. In February 2015, the Obama Administration provided support to the peace talks by naming Bernard Aronson, a former U.S. assistant secretary of state for Inter-American Affairs, as the U.S. Special Envoy to the Colombian peace talks. Talks with the FARC concluded in August 2016. In early October, to the surprise of many, approval of the accord was narrowly defeated in a national plebiscite by less than a half percentage point of the votes cast, indicating a polarized electorate. Regardless, President Santos was awarded the Nobel Peace Prize in December 2016, in part demonstrating strong international support for the peace agreement. In response to the voters' criticisms, the Santos government and the FARC crafted a modified agreement, which they signed on November 24, 2016. Rather than presenting this agreement to a plebiscite, President Santos sent it directly to the Colombian Congress, where it was ratified on November 30, 2016. Although both chambers of Colombia's Congress approved the agreement unanimously, members of the opposition CD party criticized various provisions in the accord that they deemed inadequate and boycotted the vote. The peace process was recognized as the most significant achievement of the Santos presidency and lauded outside of Colombia and throughout the region. Over the course of two terms, the President's approval ratings rose and fell rather significantly. His crowning achievement, the accord negotiated over 50 rounds of talks, covered five substantive topics: rural development and agricultural reform; political participation by the FARC; an end to the conflict, including demobilization, disarmament and reintegration; a solution to illegal drug trafficking; and justice for victims. A sixth topic provided for mechanisms to implement and monitor the peace agreement. Colombians elected a new congress in March 2018 and a new president in June 2018. Because no presidential candidate won more than 50% of the vote on May 27, 2018, as required for a victory in the first round, a second-round runoff was held June 17 between the rightist candidate Iván Duque and the leftist candidate Gustavo Petro (see results for presidential contest, Figure 3 ). Duque was carried to victory with almost 54% of the vote. Runner-up Petro, a former mayor of Bogotá, a former Colombian Senator, and once a member of the M-19 guerilla insurgency, nevertheless did better than any leftist candidate in a presidential race in the past century; he won 8 million votes and nearly 42% of the votes cast. Around 4.2% were protest votes, signifying Colombian voters who cast blank ballots. Through alliance building, Duque achieved a functional majority or a "unity" government, which involved the Conservative Party, Santos's prior National Unity or Party of the U, joining the CD, although compromise was required to keep the two centrist parties in sync with the more conservative CD. In the new Congress, two extra seats, for the presidential and vice presidential runners up, became automatic seats in the Colombian Senate and House, due to a constitutional change in 2015, allowing presidential runner up Gustavo Petro to return to the Senate. The CD party, which gained seats in both houses in the March vote, won the majority in the Colombian Senate (see Figure 2 for seat breakouts by party). Duque, who was inaugurated on August 7, 2018, at the age of 42, was the youngest Colombian president elected in a century. He possessed limited experience in Colombian politics. Duque was partially educated in the United States and worked for at decade at the Inter-American Development Bank in Washington, DC. He was the handpicked candidate of former president Uribe, who vocally opposed many of Santos's policies. Disgruntled Colombians perceived Santos as an aloof president whose energy and political capital were expended accommodating an often-despised criminal group, the FARC. President Duque appeared to be technically oriented and interested in economic reform, presenting himself as a modernizer. During his campaign, Duque called for economic renewal and lower taxes, fighting crime, and building renewed confidence in the country's institutions through some reforms. On September 26, 2018, in a speech before the U.N. General Assembly, the new president outlined his policy objectives . Duque called for increasing legality, entrepreneurship, and fairness by (1) promoting peace; (2) combating drug trafficking and recognizing it as a global menace, and (3) fighting corruption, which he characterized as a threat to democracy. He also maintained that the humanitarian crisis in neighboring Venezuela, resulting in more than 1 million migrants fleeing to Colombia, was an emergency that threatened to destabilize the region. Duque proposed a leadership role for Colombia in denouncing the authoritarian government of President Nicolás Maduro and containing his government's damage. By late November 2018, 1.2 million Venezuelans already present in Colombia were putting increasing pressure on the government's finances, generating a burden estimated at nearly 0.5% of the country's gross domestic product (GDP). President Duque, along with his vice president, Marta Lucía Ramírez, who initially ran as the Conservative Party candidate in the first round, recommended that drug policy shift back to a stricter counterdrug approach rather than a model endorsed in the peace accord, which focuses on voluntary eradication and economic support to peasant farmers to transition away from illicit drug crops. Duque campaigned on returning to spraying coca crops with the herbicide glyphosate. This would reverse Colombia's decision in mid-2015 to end aerial spraying, which had been a central—albeit controversial—feature of U.S.-Colombian counter-drug cooperation for two decades. Colombians' concerns with corruption became particularly acute during the 2018 elections, as major scandals were revealed. Similar to many countries in the region, government officials, including Santos during his 2014 campaign for reelection and the opposition candidate during that campaign were accused of taking payoffs (bribes) from the Odebrecht firm, the Brazilian construction company that became embroiled in a region-wide corruption scandal. In December 2018, presidential runner up Gustavo Petro was accused of taking political contributions from Odebrecht in a video released by a CD senator, indicating that both the left and the right of the Colombian political spectrum has been tainted by corruption allegations. In June 2017, the U.S. Drug Enforcement Administration arrested Colombia's top anti-corruption official, Gustavo Moreno. In mid-September 2017, the former chief justice of Colombia's Supreme Court was arrested for his alleged role in a corruption scandal that involved other justices accused of taking bribes from Colombian congressmen, some with ties to illegal paramilitary groups. The series of corruption charges made against members of Colombia's judicial branch, politicians, and other officials made the issue a prominent one in Colombian politics and was the focus of a left-centrist candidate's campaign in the presidential contest. In late August 2018, an anti-corruption referendum was defeated by narrowly missing a high vote threshold by less than a half percentage point, although the actual vote favored all seven proposed changes on the ballot. President Duque endorsed the referendum and maintains he will seek to curb many of the abuses identified in the referendum through legislation that his administration will propose. The Duque Administration's first budget for 2019 presented in late October 2018 was linked to an unpopular tax reform that would expand a value-added tax to cover basic food and agricultural commodities (some 36 items in the basic basket of goods, such as eggs and rice, previously exempted). The 2019 budget totals $89.7 billion, providing the education, military and police, and health sectors with the biggest increases, and reducing funding for peace accord implementation. Duque's own Democratic Center party split with him on the value-added tax, which quickly sank his approval ratings from 53% in early September 2018 to a low of 27% in November 2018, among the lowest levels in the early part of a presidential mandate in recent Colombian history. Colombia's economy is the fourth largest in Latin America after Brazil, Mexico, and Argentina. The World Bank characterizes Colombia as an upper middle-income country, although its commodities-dependent economy has been hit by oil price declines and peso devaluation related to the erosion of fiscal revenue. Between 2010 and 2014, Colombia's economy grew at an average of more than 4%, but slowed to 3.1% GDP growth in 2015. In 2017, Colombia's GDP growth slowed further to 1.7%. Despite its relative economic stability, high poverty rates and inequality have contributed to social upheaval in Colombia for decades. The poverty rate in 2005 was slightly above 45%, but declined to below 27% in 2016. The issues of limited land ownership and high rural poverty rates remain a problem. According to a United Nations study published in 2011, 1.2% of the population owned 52% of the land, and data revealed in 2016 that about 49% of Colombians continued to work in the informal economy. Colombia is often described as a country bifurcated between metropolitan areas with a developed, middle-income economy, and some rural areas that are poor, conflict-ridden, and weakly governed. The fruits of the growing economy have not been shared equally with this ungoverned, largely rural periphery. Frequently these more remote areas are inhabited by ethnic minorities or other disadvantaged groups, such as Afro-Colombians, indigenous populations, or landless peasants and subsistence farmers, who are vulnerable to illicit economies due to few connections to the formal economy. The United States is Colombia's leading trade partner. Colombia accounts for a small percentage of U.S. trade (approximately 1%), ranking 22 nd among U.S. export markets and 27 th among foreign exporters to the United States in 2017. Colombia has secured free trade agreements with the European Union, Canada, and the United States, and with most nations in Latin America. Colombian officials have worked over the past decade to increase the attractiveness of investing in Colombia, and foreign direct investment (FDI) grew by 16% between 2015 and 2016. This investment increase came not only from the extractive industries, such as petroleum and mining, but also from such areas as agricultural products, transportation, and financial services. Promoting more equitable growth and ending the internal conflict were twin goals of the two-term Santos administration. Unemployment, which historically has been high at over 10%, fell below that double-digit mark during Santos's first term and remained at 9.2% in 2016 but rose slightly to an estimated 9.6% in 2018. Although Colombia is ranked highly for business-friendly practices and has a favorable regulatory environment that encourages trade across borders, it is still plagued by persistent corruption and an inability to effectively implement institutional reforms it has undertaken, particularly in regions where government presence is weak. According to the U.S. State Department in its analysis of national investment climates, Colombia has demonstrated a political commitment to create jobs, develop sound capital markets, and achieve a legal and regulatory system that meets international norms for transparency and consistency. Despite its macroeconomic stability, several issues remain, such as a still-complicated tax system, a high corporate tax burden, and continuing piracy and counterfeiting issues. Colombia's rural-sector protestors formed strikes and blockades beginning in 2013 with demands for long-term and integrated-agricultural reform in a country with one of the most unequal patterns of land ownership. In October and November 2018, Colombian secondary and university students protested in high numbers during six large mobilizations, taking place over 60 days, to demand more funding for education. The four-year peace talks between the FARC and the Santos administration started in Norway and moved to Cuba where negotiators worked through a six-point agenda during more than 50 rounds of talks that produced agreements on six major topics. The final topic—verification to enact the programs outlined in the final accord—all parties knew would be the most challenging, especially with a polarized public and many Colombians skeptical of whether the FARC would be held accountable for its violence and crimes during the years of conflict. Some analysts have estimated that to implement the programs required by the commitments in the accord to ensure stable post-conflict development may require 15 years and cost from $30 billion to $45 billion. The country faces steep challenges to underwrite the post-accord peace programs in an era of declining revenues. While progress has been uneven, some programs (those related to drug trafficking) had external pressure to move forward quickly and some considered urgent received "fast track" treatment to expedite their regulation by Congress. The revised peace accord that was approved by the Colombian Congress in late 2016 was granted fast track implementation by the Colombian Constitutional Court in a ruling on December 13, 2016, particularly applied to the FARC's disarmament and demobilization. However, in May 2017, a new ruling by the high court determined that all legislation related to the implementation of the accord needed to be fully debated rather than passed in an expedited fashion, which some analysts maintain started to slow the process of implementing the accord significantly. The Kroc Institute for International Peace Studies at the University of Notre Dame is responsible for monitoring and implementing the agreement. It issued two interim reports in November 2017 and August 2018. At the end of the last reporting period (June 2018), the Kroc Institute estimated that 63% of the 578 peace accord commitments have begun implementation. In relation to other peace accords it had studied, the Kroc Institute found that the implementation of Colombia's accord was on course as about average, although that progress took place prior to President Duque's election. The first provision undertaken was the demobilization of the FARC, monitored by a U.N. mission that was approved by the U.N. Security Council to verify implementation of the accords. U.N. monitors also emptied large arm caches identified by FARC leaders, seizing the contents of more than 750 of the reported nearly 1,000 caches by the middle of 2017. With the final disarmament, President Santos declared the conflict over in mid-August 2017. The U.S. State Department reported in its Country Reports on Terrorism 201 , that by September 25, 2017, the United Nations had verified the collection of 8,994 arms, 1.7 million rounds, and more than 40 tons of explosives. The report states that the Colombian government had accredited "roughly 11,000 ex-combatants for transition to civilian life." The FARC also revealed its hidden assets in September 2017, listing more than $330 million in mostly real estate investments. This announcement drew criticism from several analysts who note that the FARC assets are likely much greater. In July 2017, the U.N. Security Council voted to expand its mandate and launch a second mission for three years to verify the reintegration of FARC guerrillas into civil society beginning September 20, 2017. One of Colombia's greatest challenges continues to be ensuring security for ex-combatants and demobilized FARC. The FARC's reintegration into civil society is a charged topic because the FARC's efforts in the 1980s to start a political party, known as the Patriotic Union, or the UP by its Spanish acronym, resulted in more than 3,000 party members being killed by rightwing paramilitaries and others. As of the end of 2018, reportedly 85 FARC members and their close relatives had been killed. In addition to unmet government guarantees of security, the FARC also has criticized the government for not adequately preparing for the group's demobilization. According to observers, the government failed to provide basic resources to FARC gathered throughout the country in specially designated zones for disarmament and demobilization (later renamed reintegration zones). The demobilization areas or cantonments had been so little prepared in early 2017 that the FARC had in many cases to construct their own housing and locate food and other provisions. Reintegration of former combatants has proceeded slowly. The Constitutional Court's May 2017 ruling to restrict fast track, and controversy about the new court to try war crimes and other serious violations, the "Special Jurisdiction of Peace" led to further delays. Peace process advocates have cited limited attention to include ethnic Colombians, such as Afro-Colombian leaders and indigenous communities, into the accord's implementation, as required by the "ethnic chapter" of the peace accord. A U.N. deputy human rights official warned in October 2017 that after a successful demobilization it would be dangerous not to reintegrate FARC former combatants by providing them realistic options for income and delaying effective reintegration could undermine peace going forward. Under the peace accord, Territorially Focused Development Programs (PDETs in Spanish) are a tool for planning and managing a broad rural development process, with the aim of transforming170 municipalities (covering 16 subregions) most affected by the armed conflict. PDETs target those municipalities in Colombia with the highest number of displacements and those that have experienced the most killings, massacres, and forced disappearances. These marginal areas generally have experienced chronic poverty, high inequality, the presence of illicit crops such as coca, and low levels of local government institutional performance. Violence and forced displacements in some of the PDET municipalities increased in the last half of 2018. Colombia's Constitutional Court determined in October 2017 that over the next three presidential terms (until 2030), Colombia must follow the peace accord commitments negotiated by the Santos administration and approved by the Colombian Congress in 2016. The Special Jurisdiction of Peace, set up to adjudicate the most heinous crimes of Colombia's decades-long armed conflict, began to hear cases in July 2018. However, Colombians remain skeptical of its capacity. A key challenge is the case of a FARC leader and lead negotiator in the peace process, Jesús Santrich, alleged to have committed drug trafficking crimes in 2017 after the accord was ratified, who has been jailed. Colombia has confronted a complex security environment of armed groups: two violent leftist insurgencies, the FARC and the ELN, and groups that succeeded the AUC following its demobilization during the Uribe administration. The FARC, whittled down by the government's military campaign against it, continued to conduct a campaign of terrorist activities during peace negotiations with the government through mid-2015, but it imposed successive temporary unilateral cease-fires that significantly reduced violence levels. In August 2016, the FARC and the government concluded negotiations on a peace accord that was subsequently approved by Congress with modifications in November 2016. Authorities and some analysts maintain that since the peace accord was ratified, 5% to 10% of the FARC have become dissidents who reject the peace settlement, although other estimates suggest a higher percentage. These armed individuals remain a threat. As agreed in the peace accord, the demobilized rebels transitioned to a political party that became known as the Common Alternative Revolutionary Force (retaining the acronym FARC) in September 2017. On November 1, 2017, the FARC announced their party's presidential ticket: current FARC leader Rodrigo Londoño (aka Timochenko) for president and Imelda Daza for vice president. The FARC Party ran several candidates in congressional races but failed to win any additional congressional race for which it competed in the March 2018 legislative elections, so the automatic seats in Congress were the only ones that it filled. The ELN, like the FARC, became deeply involved in the drug trade and used extortion, kidnapping, and other criminal activities to fund itself. The ELN, with diminished resources and reduced offensive capability, according to government estimates, declined to fewer than 2,000 fighters, although some analysts maintain in 2018 the forces grew as high as 3,400, including former FARC who were recruited to join the ELN as the larger rebel group demobilized. In 2015, ELN leadership began exploratory peace talks with the Santos government in Ecuador, although the ELN continued to attack oil and transportation infrastructures and conduct kidnappings and extortions, at least periodically. Formal talks with the ELN finally opened in February 2017 in Quito, Ecuador. After the talks moved to Cuba in May 2018, at the request of Ecuador's President Lenín Moreno, several negotiating sessions took place. The ELN's central leadership, including Nicolás Rodríguez Bautista (aka "Gabino"), arrived in Cuba to continue the talks. However, President Duque in September 2018 suspended the talks and recalled the government negotiating team. The ELN is far more regionally oriented, decentralized, and nonhierarchical in its decisionmaking than the FARC. Late in 2018, a Colombian political online magazine claimed a meeting had been held two months earlier between FARC dissident groups and the ELN in Venezuela in which the parties discussed how to increase their coordination. On January 17, 2019, a car bomb attack at a National Police academy in southern Bogotá shattered illusions that Colombia's long internal conflict with insurgents was coming to an end. The bombing, allegedly carried out by an experienced ELN bomb maker, killed 20 police cadets and the bomber and injured more than 65 others. The ELN took responsibility for the attack in a statement published on January 21. Large demonstrations took place in Bogotá protesting the return of violence to Colombia's capital city. The Duque government ended peace talks with the ELN, which had been ongoing sporadically since 2017. The Duque government then requested extradition of the ELN's delegation of negotiators to the peace talks in Cuba on terrorism charges. The Cuban government, which condemned the bombing, responded that the protocols for the peace talks required that the negotiators be returned to Colombia without arrest. The Duque government has persisted in requesting the negotiators to be extradited. The AUC, the loosely affiliated national umbrella organization of paramilitaries, officially disbanded a decade ago. The organization was removed from the State Department's Foreign Terrorist Organizations list in July 2014. More than 31,000 AUC members demobilized between 2003 and 2006, and many AUC leaders stepped down. However, as noted, many former AUC paramilitaries continued their illicit activities or re-armed and joined criminal groups—known as Bacrim . Many observers view the Bacrim as successors to the paramilitaries, and the Colombian government has characterized these groups as the biggest threat to Colombia's security since 2011. The Bacrim do not appear to be motivated by the dream of defeating the national government, but they seek territorial control and appear to provide rudimentary justice in ungoverned parts of the country. In 2013, the criminal group Los Urabeños, launched in 2006, emerged as the dominant Bacrim. Over its lifetime, the group has been referred to as the Gaitanistas, the Clan Úsuga, and most recently El Clan del Golfo, growing to about 3,000 members by 2015. The Urabeños organization is heavily involved in cocaine trafficking as well as arms trafficking, money laundering, extortion, gold mining, human trafficking, and prostitution. Early leaders of the group, such as founder Daniel Rendón Herrera (alias "Don Mario") and his brother Feddy Rendón Herrera were designated drug kingpins under the U.S. Kingpin Act in 2009 and 2010, respectively. However, because these men had been part of the AUC peace process, they could not be extradited to the United States until they had served time and paid reparations. In June 2015, the Justice Department unsealed indictments against 17 alleged Urabeños members. The Colombian government's efforts to dismantle the Urabeños and interrupt its operations began to result in the capture of top leaders and gradually to disrupt its illicit activities. The Urabeños faced an intense enforcement campaign by the Colombian police and military, especially after the Urabeños reportedly advertised and paid rewards to its subcontracted assassins to murder Colombian police. In September 2017, the Urabeños top leader, Dairo Antonio Úsuga (alias "Otoniel"), requested terms of surrender from the Santos government after the arrest of his wife and the killing or arrest of siblings and co-leaders, but this offer was never formalized. Colombia captured a vast amount of cocaine, approximately 12 metric tons, linked to the the Urabeños in November 2017. Splinter groups of the large Colombian drug cartels of the 1980s and 1990s, such as the Medellin Cartel and Cali Cartel, have come and gone in Colombia, including the powerful transnational criminal organizations (TCOs) the Norte del Valle Cartel and Los Rastrajos. The U.S. Drug Enforcement Administration's 2018 National Drug Threat Assessment maintains "large-scale Colombian TCOs" work closely with Mexican and Central American TCOs to export large quantities of cocaine out of Colombia every year. Traditionally, the FARC and ELN had cooperated with Bacrim and other Colombian crime groups in defense of drug trafficking and other illicit activities despite the groups' ideological differences. Venezuela is a major transit corridor for Colombian cocaine. According to the State Department's 2018 International Narcotics Control Strategy Report , Venezuela's porous western border with Colombia, current economic crisis, weak judicial system, sporadic international drug control cooperation, and a permissive and corrupt environment make it a preferred trafficking route for illicit drugs. A May 2018 report by Insight Crime identified more than 120 high-level Venezuelan officials who have engaged in criminal activity. The report analyzes how the Venezuelan military, particularly the National Guard, has been involved in the drug trade since 2002 and colluded with other illegally armed groups. Another Bacrim, Los Rastrojos, reportedly controls important gasoline smuggling routes between Venezuela and Colombia in 2018. Similarly, in the past year, ELN guerrillas reportedly have moved from seeking safe haven in Venezuela to taking control of illicit gold mining areas near Venezuela's border with Guyana. Both the ELN, which is still engaged in armed conflict with the Colombian government, and its rival, the Popular Liberation Army (EPL), reportedly recruit Venezuelans to cultivate coca in Colombia. Human trafficking and sexual exploitation of Venezuelan migrants throughout Colombia is prevalent. Dissident FARC guerrillas are using border areas and other remote areas in the countryside to regroup and could eventually seek to consolidate into a more unified organization or coordinate with other criminal groups sheltering in Venezuela. The State Department's 2017 terrorism report published in April 2018 maintained that the number of terrorist incidents in Colombia—carried out by the FARC and ELN—decreased significantly, by 40%, over the already much-diminished level of 2016. ELN aggression included high-impact attacks, such as launching mortars at police stations and bombing pipelines, although the report also states that ELN demobilizations and surrenders have increased. The humanitarian crisis in Venezuela has set in motion a mass exodus of desperate migrants, who have come temporarily (or for extended stays) to Colombia. Although Venezuela has experienced hyperinflation (the highest in the world), a rapid contraction of its economy, and severe shortages of food and medicine, as of November 2018 Venezuelan President Nicolás Maduro has refused most international humanitarian assistance. Based on estimates from the U.N. High Commissioner for Refugees (UNHCR), as of November 2018, more than 3 million Venezuelans were living outside Venezuela; of these, an estimated 2.3 million left after 2015. As conditions in Venezuela have continued to deteriorate, increasing numbers of Venezuelans have left the country. Neighboring countries, particularly Colombia, are straining to absorb a migrant population that is often malnourished and in poor health. The spread of previously eradicated diseases, such as measles, is also a major regional concern. In January 2019, the Trump Administration announced backing for the president of the Venezuelan National Assembly, Juan Guaidó, as interim president of Venezuela. The Trump Administration has called for Maduro's departure, and Colombia joined many other countries in Latin America and Europe to recognize Guaidó. U.S. Secretary of State Michael Pompeo announced that the United States was prepared to provide $20 million in humanitarian assistance to the people of Venezuela. Colombia joined 11 countries in the Lima Group that declared on February 4, 2019, their desire to hasten a return to democracy in Venezuela by working with Guaidó for a peaceful transition without the use of force. Colombia's multisided internal conflict over the last half century generated a lengthy record of human rights abuses. Although it is widely recognized that Colombia's efforts to reduce violence, combat drug trafficking and terrorism, and strengthen the economy have met with success, many nongovernmental organizations (NGOs) and human rights groups continue to report significant human rights violations, including violence targeting noncombatants, that involves killings, torture, kidnappings, disappearances, forced displacements, forced recruitments, massacres, and sexual attacks. The Center for Historical Memory report issued to the Colombian government in July 2013 traces those responsible for human rights violations to the guerrillas (the FARC and ELN), the AUC paramilitaries and successor paramilitary groups, and the Colombian security forces. In analyzing nearly 2,000 massacres between 1980 and 2012 documented in the center's database, the report maintains that 58.9% were committed by paramilitaries, 17.3% by guerrillas, and 7.9% by public security forces. According to the U.S. State Department's annual report on human rights covering 2017, Colombia's most serious human rights abuses centered on extrajudicial and unlawful killings; torture and detentions; rape and sexual crimes. In addition to the State Department, numerous sources report regularly on human rights conditions in Colombia. (See Appendix .) Colombia continues to experience murders and threats of violence against journalists, human rights defenders, labor union members, social activists such as land rights leaders, and others. Crimes of violence against women, children, Afro-Colombian and indigenous leaders, and other vulnerable groups continue at high rates. In December 2018, the U.N. special rapporteur on human rights defenders came out with strong criticism of heightened murders of human rights defenders, which he maintained were committed by hitmen paid no more than $100 per murder, according to reports he heard from activists and other community members whom he met with during a trip to Colombia. These ongoing issues reflect constraints of the Colombian judicial system to effectively prosecute crimes and overcome impunity. For many years, human rights organizations have raised concerns about extrajudicial executions committed by Colombian security forces, particularly the military. In 2008, it was revealed that several young men from the impoverished community of Soacha—who had been lured allegedly by military personnel from their homes to another part of the country with the promise of employment—had been executed. When discovered, the Soacha murder victims had been disguised as guerrilla fighters to inflate military claims of enemy body counts, resulting in the term false positives . Following an investigation into the Soacha murders, the military quickly fired 27 soldiers and officers, including three generals, and the army's commander resigned. The Colombian prosecutor general's criminal investigations of soldiers and officers who allegedly participated in the Soacha executions have proceeded quite slowly. Some 48 of the military members eventually charged with involvement in the Soacha cases were released due to the expiration of the statute of limitations. Whereas some soldiers have received long sentences, few sergeants or colonels have been successfully prosecuted. In 2009, the false positive phenomenon was investigated by the U.N.'s Special Rapporteur on Extrajudicial Executions, who issued a report that concluded with no finding that such killings were a result of an official government policy. However, the Special Rapporteur did find, "the sheer number of cases, their geographic spread, and the diversity of military units implicated, indicate that these killings were carried out in a more or less systematic fashion by significant elements within the military." The majority of the cases took place between 2004 and 2008, when U.S. assistance to Colombia peaked. In recent years, the number of new alleged false positive cases declined steeply, but human rights NGOs still reported a few cases in 2012 through 2015. To address the military's human rights violations, the Santos administration proposed a change to policy that did not prevail. This reform was a constitutional change to expand the jurisdiction of military courts and, it was approved by the Colombian Congress in late December 2012 by a wide margin despite controversy. Human rights groups criticized the legislation's shift in the jurisdiction over serious human rights crimes allegedly committed by Colombia's public security forces from the civilian to the military justice system. In its review of the constitutional amendment, the Colombian Constitutional Court struck down the law over procedural issues in October 2013. Human Rights Watch in a 2015 report on the false positive cases noted that prosecutors in the Human Rights Unit of the Prosecutor General's Office conducted investigations into more than 3,000 false positive homicide cases allegedly committed by army personnel that resulted in about 800 convictions, mostly of lower-ranking soldiers. Only a few of those convictions involved former commanders of battalions or other tactical units, and none of the investigations of 16 active and retired army generals had produced charges. In 2016, the prosecutions against generals accused of responsibility for false positives continued, although a few were closed and 12 remained under investigation at year's end. Additionally, in October 2016, the Colombian prosecutor general indicted Santiago Uribe, the brother of former President Uribe, on charges of murder and association to commit crimes for his alleged role in the paramilitary group "The 12 Apostols" in the 1990s. The State Department human rights report covering 2017, maintains that during the year through July, four new cases involving "aggravated homicide" committed by security forces and 11 new convictions were reached for "simple homicide" by security force members. Although estimates diverge, the number of human rights defenders murdered in 2016 totaled 80 and another 51 in the first half of 2017, according to Somos Defensores ("We are Defenders"), a Colombian NGO that tracks violence against defenders and is cited by the State Department. Some groups, such as the Colombian think tank, Indepaz, say the numbers are higher, up to 117 murders in 2016. In the two years since the approval of the 2016 peace accord, social leaders, ethnic community leaders, and human rights defenders have suffered from continued high levels of violence. Human rights organizations cite the murders of more than 100 activists in 2017 and in 2018. Of the 109 human rights and civil society activists killed in 2018 through November, some were leaders of efforts to implement the 2016 peace accord. For instance, 13 social leaders were assassinated in the southwest department of Cauca in the first six months of the year, a department in Colombia with the fourth largest area devoted to coca cultivation in the country and host to several peace accord programs associated with rural development, including voluntary eradication of drug crops. Few, if any, of those accused of making threats and ordering or carrying out assassinations have been prosecuted. According to these activists, perpetrators still have little to fear of legal consequences. Since early 2012, violence against land rights activists has risen sharply with the start of implementation of the Victims' Law that authorized the return of stolen land. A September 2013 report by Human Rights Watch pointing to the rise in violence against land activists and claimants maintained that the environment had turned so threatening that claimants who had received land judgments were too frightened to return, and the government had received more than 500 serious threats against claimants in less than 18 months. According to Human Rights Watch, many of the threats and killings have been conducted by paramilitary-influenced Bacrim, although they may be operating at the behest of third-party "landowners," who are trying to protect their land from seizure. For more than a decade, the Colombian government tried to suppress violence against groups facing extraordinary risk through the National Protection Unit (UPN) programs. Colombia's UPN provides protection measures, such as body guards and protective gear, to individuals in at-risk groups, including human rights defenders, journalists, trade unionists, and others. However, according to international and Colombian human rights groups, the UPN has been plagued by corruption issues and has inadequately supported the prosecution of those responsible for attacks. According to the State Department's Report on Human Rights Practices covering 2017, the UPN protected roughly 6,067 at-risk individuals, including 575 human rights activists, with a budget of $150 million. Journalists, a group that has traditionally received protection measures from the UPN, continue to operate in a dangerous environment in Colombia. According to the Committee to Protect Journalists (CPJ), 47 journalists have been killed in work-related circumstances since 1992. Three Ecuadorian journalists were killed by a FARC dissident group close to the border of Ecuador in 2018, leading to the end of the Colombian government's peace talks with the ELN in Ecuador and their subsequent move to Cuba. To help monitor and verify that human rights were respected throughout implementation of the peace accord, the government formally renewed the mandate of the U.N.'s High Commissioner of Human Rights in 2016 for three years. The issue of violence against the labor movement in Colombia has sparked controversy and debate for years. Many human rights groups and labor advocates have maintained that Colombia's poor record on protecting its trade union members and leaders from violence is one reason to avoid closer trade relations with Colombia. The U.S.-Colombia Free Trade Agreement (also known as the U.S.-Colombia Trade Promotion Agreement) could not be enacted without addressing the deep concern of many Members of Congress that Colombia must enforce basic labor standards and especially measures to mitigate the alleged violence against trade union members and bring perpetrators of such violence to justice. In April 2011, the United States and Colombia agreed to an "Action Plan Related to Labor Rights" (the Labor Action Plan, LAP), which contained 37 measures that Colombia would implement to address violence, impunity, and workers' rights protection. Before the U.S.-Colombia Free Trade Agreement entered into force in April 2012, the U.S. Trade Representative determined that Colombia had met all the important milestones in the LAP to date. Despite the programs launched and measures taken to implement the LAP, human rights and labor organizations claim that violence targeting labor union members continues. (Some analysts continue to debate whether labor activists are being targeted because of their union activities or for other reasons.) The Colombian government has acknowledged that violence and threats continue, but points to success in reducing violence generally and the number of homicides of labor unionists specifically. Violence levels in general are high in Colombia, but have steadily been decreasing. According to the data reported by the U.N. Office on Drugs and Crime (UNODC) in its annual homicide report, rates have decreased dramatically since 2002, when the homicide rate was at 68.9 per 100,000. The Colombian Ministry of Defense reported in 2016 that the homicide rate had declined to 24.4 per 100,000. In this context of an overall steady decline in homicides, the number of labor union killings has also declined. For many years, the government and the leading NGO source that tabulates these crimes did not agree on the number of labor union murders because they used different methodologies. Both sources recorded a decline, but the government generally saw a steeper decline. According to the Colombian labor rights NGO and think tank, the National Labor School ( Escuela Nacional Sindical , ENS), there has been a significant decline from 191 labor union murders in 2001 to 20 reported in 2012. In 2017, through the month of August the ENS reported 14 labor murders. Of the cases covering homicides between January 2011 and August 2017, 162 homicide cases in which victims were labor union members, were 409 convictions, 31 for cases after 2011 and 378 for cases before 2011. In addition, labor advocates note that tracking homicides does not capture the climate of intimidation that Colombian labor unions face. In addition to lethal attacks, trade union members encounter increased death threats, arbitrary detention, and other types of harassment. Measures to strengthen the judicial system to combat impunity for such crimes are also part of the Labor Action Plan. Nevertheless, many analysts maintain there remains a large backlog of cases yet to be investigated involving violent crimes against union members. The internal conflict has been the major cause of a massive displacement of the civilian population that has many societal consequences, including implications for Colombia's poverty levels and stability. Colombia has one of the largest populations of internally displaced persons (IDPs) in the world. Most estimates place the total at more than 7 million IDPs, or more than 10% of Colombia's estimated population of 49 million. This number of Colombians, forcibly displaced and impoverished as a result of the armed conflict, continues to grow and has been described by many observers as a humanitarian crisis. Indigenous and Afro-Colombian people make up an estimated 15%-22% of the Colombian population. They are, however, disproportionately represented among those displaced. The leading Colombian NGO that monitors displacement, Consultancy for Human Rights and Displacement (CODHES), reports that 36% of the victims of forced displacement nationwide in 2012 came from the country's Pacific region where Afro-Colombian and indigenous people predominate. The Pacific region has marginal economic development as a result of weak central government presence and societal discrimination. (Some 84% of the land in the Pacific region is subject to collective-title rights granted to Afro-Colombian and indigenous communities. ) Illegal armed groups are active in usurping land in this region, which is valued for its proximity to a major port and drug trafficking routes, and the Afro- and indigenous communities are also caught in the middle of skirmishes between illegal groups and Colombian security forces. IDPs suffer stigma and poverty and are often subject to abuse and exploitation. In addition to the disproportionate representation of Colombia's ethnic communities among the displaced, other vulnerable populations, including women and children, have been disproportionally affected. Women, who make up more than half of the displaced population in Colombia, can become targets for sexual harassment, violence, and human trafficking. Displacement is driven by a number of factors, most frequently in more remote regions of the country where armed groups compete and seek to control territory or where they confront Colombian security forces. Violence that uproots people includes threatened or actual child recruitment or other forced recruitment by illegal armed groups, as well as physical, psychological, and sexual violence. Other contributing factors reported by NGOs include counternarcotics measures such as aerial spraying, illegal mining, and large-scale economic projects in rural areas. Inter-urban displacement is a growing phenomenon in cities such as Buenaventura and Medellin, which often results from violence and threats by organized crime groups. The Victims' Law of 2011, which began to be implemented in 2012, is the major piece of legislation to redress Colombian displacement victims with the return of their stolen land. The historic law provides restitution of land to those IDPs who were displaced since January 1, 1991. The law aims to return land to as many as 360,000 families (impacting up to 1.5 million people) who had their land stolen. The government notes that some 50% of the land to be restituted has the presence of land mines and that the presence of illegally armed groups in areas where victims have presented their applications for land restitution has slowed implementation of the law. Between 2011 and 2016, 100,000 applications for land restitution were filed and approximately 5,000 properties (roughly 5% of applications) were successfully returned following judgements on the cases. With the international support from U.S. Agency for International Development (USAID) and other donors, a Victims Unit was established to coordinate the range of services for victims, including financial compensation and psychosocial services, provided by a host of government agencies. The 2011 Victims' Law is considered a model and particularly the implementation of a Victims' registry, which was supported by USAID. Through its Victims Unit, the Colombian government had provided financial reparations to over 800,000 victims and psychosocial support to 700,000 as of October 2018. The Global Report on Internal Displacement from the Internal Displacement Monitoring Centre (IDMC) reported, however, displacement inside Colombia continued with more than 171,000 internally displaced in 2016. As the political crisis in Venezuela has grown, a wave of refugees and migrants have come across the border into Colombia reversing an earlier trend. Venezuelans were fleeing political instability and economic turmoil in Colombia's once-wealthy neighboring nation. Venezuela's economic crisis worsened throughout 2018, prompting a sharp increase in migrants seeking to escape into Colombia. In response to the growing flood of Venezuelans, former President Santos initially announced that he would impose stricter migratory controls and deploy thousands of new security personnel along the frontier. Nevertheless, he acknowledged that Venezuela had once served as a vital escape valve for Colombian refugees fleeing their half century internal conflict, for which he was grateful. Colombia shares long borders with neighboring countries, and some of these border areas have been described as porous to illegal armed groups that threaten regional security. Colombia has a 1,370-mile border with Venezuela, approximately 1,000-mile borders with both Peru and Brazil, and shorter borders with Ecuador and Panama. Much of the territory is remote and rugged and suffers from inconsistent state presence. Although all of Colombia's borders have been problematic and subject to spillover effects from Colombia's armed conflict, the most affected are Venezuela, Ecuador, and Panama. Over the years, Colombia's relations with Venezuela and Ecuador have been strained by Colombia's counterinsurgency operations, including cross-border military activity. The FARC and ELN insurgents have been present in shared-border regions and in some cases the insurgent groups used the neighboring countries to rest, resupply, and shelter. Former President Uribe accused the former Venezuelan government of Hugo Chávez of harboring the FARC and ELN and maintained that he had evidence of FARC financing the 2006 political campaign of Ecuador's leftist President Rafael Correa. Relations between Ecuador and Colombia remained tense following the Colombian military bombardment of a FARC camp inside Ecuador in March 2008. Ecuador severed diplomatic relations with Colombia for 33 months. Also in 2008, Ecuador filed a suit against Colombia in the International Court of Justice (ICJ), claiming damages to Ecuadorian residents affected by spray drift from Colombia's aerial eradication of drug crops. In September 2013, Colombia reached an out-of-court settlement awarding Ecuador $15 million. Once in office, President Santos reestablished diplomatic ties with both countries and in his first term (2010-2014) cooperation greatly increased between Colombia and Venezuela on border and security issues and with Ecuador's Correa. However, concerns about Venezuelan links to the FARC and the continued use of Venezuela by the FARC and ELN as a safe haven to make incursions into Colombia remained an irritant in Colombian-Venezuelan relations. Nevertheless, the Venezuelan and Colombian governments committed to jointly combat narcotics trafficking and illegal armed group activities along the porous Venezuelan-Colombian border and Venezuela remained a supporting government of the FARC-government peace talks (along with Chile, Norway, and Cuba) through 2016, even after former President Chávez died in office in March 2013. Ecuador's government hosted exploratory talks between the ELN and the Santos government beginning in 2015, which became formal talks hosted in Quito in February 2017, although Ecuador's president requested that the talks move to Cuba in May 2018, due to a spate of border violence that could have been related to the ELN. For many years, the region in Panama that borders Colombia, the Darien, was host to a permanent presence of FARC soldiers who used the remote area for rest and resupply as well to transit drugs north. By 2015, according to the State Department, the FARC was no longer maintaining a permanent militarized presence in Panamanian territory, in part due to effective approaches taken by Panama's National Border Service in coordination with Colombia. Nevertheless, the remote Darien region still faces challenges from smaller drug trafficking organizations and criminal groups such as Bacrim and experiences problems with human smuggling with counterterrorism implications. When Colombia hosted the Sixth Summit of the Americas in April 2012, President Obama and President Santos announced a new joint endeavor, the Action Plan on Regional Security Cooperation. This joint effort, built on ongoing security cooperation, addresses hemispheric challenges, such as combating transnational organized crime, bolstering counternarcotics, strengthening institutions, and fostering resilient communities. The Action Plan focuses on capacity building for security personnel in Central America and the Caribbean by Colombian security forces (both Colombian military and police). To implement the plan, Colombia undertook several hundred activities in cooperation with Panama, Costa Rica, El Salvador, Honduras, Guatemala and the Dominican Republic, and between 2013 and 2017 trained almost 17,000 individuals (see Figure 4 ). The Colombian government notes that this program grew dramatically from 34 executed activities in 2013 to 441 activities planned for 2018. Colombia has increasingly trained military and police from other countries both under this partnership and other arrangements, including countries across the globe. According to the Colombian Ministry of Defense, around 80% of those trained were from Mexico, Central America, and the Caribbean. U.S. and Colombian officials maintain that the broader effort is designed to export Colombian expertise in combating crime and terrorism while promoting the rule of law and greater bilateral and multilateral law enforcement cooperation. Critics of the effort to "export Colombian security successes" maintain that human rights concerns have not been adequately addressed. Some observers question the portion of these activities that are funded by the U.S. government and want to see more transparency. In one analysis of the training, a majority of the training was provided by Colombian National Police rather than the Colombian Army, in such areas as ground, air, maritime, and river interdiction; police testimony; explosives; intelligence operations; psychological operations; and Comando JUNGLA, Colombia's elite counternarcotics police program. Other analysts praise the Colombian training and maintain that U.S. assistance provided in this way has helped to improve, professionalize, and expand the Colombian military, making it the region's second largest. As that highly trained military shifts from combating the insurgency and the Colombian National Police take the dominant role in guaranteeing domestic security, Colombia may play a greater role in regional security and even in coalition efforts internationally. In September 2017, President Trump announced that he had considered designating Colombia in noncompliance with U.S. counternarcotics requirements, but noted that he had not proceeded with the step in part because of Colombian training efforts to assist others in the region with combating narcotics and related crime. Colombia is a key U.S. ally in the region. With diplomatic relations that began in the 19 th century following Colombia's independence from Spain, the countries have enjoyed close and strong ties. Because of Colombia's prominence in the production of illegal drugs, the United States and Colombia forged a close partnership over the past 16 years. Focused initially on counternarcotics, and later counterterrorism, a program called Plan Colombia laid the foundation for a strategic partnership that has broadened to include sustainable development, human rights, trade, regional security, and many other areas of cooperation. Between FY2000 and FY2016, the U.S. Congress appropriated more than $10 billion in assistance from U.S. State Department and Department of Defense (DOD) accounts to carry out Plan Colombia and its follow-on strategies. During this time, Colombia made notable progress combating drug trafficking and terrorist activities and reestablishing government control over much of its territory. Its economic and social policies have reduced the poverty rate and its security policies have lowered the homicide rate. Counternarcotics policy has been the defining issue in U.S.-Colombian relations since the 1980s because of Colombia's preeminence as a source country for illicit drugs. Peru and Bolivia were the main global producers of cocaine in the 1980s and early 1990s. However, successful efforts there in reducing supply pushed cocaine production from those countries to Colombia, which soon surpassed both its Andean neighbors. The FARC and other armed groups in the country financed themselves primarily through narcotics trafficking, and that lucrative illicit trade provided the gasoline for the decades-long internal armed conflict at least since the 1990s. Colombia emerged to dominate the cocaine trade by the late 1990s. National concern about the crack cocaine epidemic and extensive drug use in the United States led to greater concern with Colombia as a source. As Colombia became the largest producer of coca leaf and the largest exporter of finished cocaine, heroin produced from Colombian-grown poppies was supplying a growing proportion of the U.S. market. Alarm over the volumes of heroin and cocaine being exported to the United States was a driving force behind U.S. support for Plan Colombia at its inception. The evolution of Plan Colombia took place under changing leadership and changing conditions in both the United States and Colombia. Plan Colombia was followed by successor strategies such as the National Consolidation Plan, described below, and U.S.-Colombia policy has reached a new phase anticipating post-conflict Colombia. Announced in 1999, Plan Colombia originally was a six-year strategy to end the country's decades-long armed conflict, eliminate drug trafficking, and promote development. The counternarcotics and security strategy was developed by the government of President Andrés Pastrana in consultation with U.S. officials. Colombia and its allies in the United States realized that for the nation to gain control of drug trafficking required a stronger security presence, the rebuilding of institutions, and extending state presence where it was weak or nonexistent. Initially, the U.S. policy focus was on programs to reduce the production of illicit drugs. U.S. support to Plan Colombia consisted of training and equipping counternarcotics battalions in the Colombian Army and specialized units of the Colombian National Police, drug eradication programs, alternative development, and other supply reduction programs. The original 1999 plan had a goal to reduce "the cultivation, processing, and distribution of narcotics by 50%" over the plan's six-year timeframe. The means to achieve this ambitious goal were a special focus on eradication and alternative development; strengthening, equipping, and professionalizing the Colombian Armed Forces and the police; strengthening the judiciary; and fighting corruption. Other objectives were to protect citizens from violence, promote human rights, bolster the economy, and improve governance. U.S. officials expressed their support for the program by emphasizing its counterdrug elements (including interdiction). The focus on counternarcotics was the basis for building bipartisan support to fund the program in the U.S. Congress because some Members of Congress were leery of involvement in fighting a counterinsurgency, which they likened to the "slippery slope" of the war in Vietnam. President George W. Bush came to office in 2001 and oversaw some changes to Plan Colombia. The primary vehicle for providing U.S. support to Plan Colombia was the Andean Counterdrug Initiative, which was included in foreign operations appropriations. The Bush Administration requested new flexibility so that U.S.-provided assistance would back a "unified campaign against narcotics trafficking, terrorist activities, and other threats to [Colombia's] national security" due to the breakdown of peace talks between the FARC and the Pastrana government in February 2002. Congress granted this request for a unified campaign to fight drug trafficking and terrorist organizations as Members of Congress came to realize how deeply intertwined the activities of Colombia's terrorist groups were with the illicit drug trade that funded them. However, Congress prohibited U.S. personnel from directly participating in combat missions. Congress placed a legislative cap on the number of U.S. military and civilian contractor personnel who could be stationed in Colombia, although the cap was adjusted to meet needs over time. The current limit (first specified in the FY2015 National Defense Authorization Act, as amended) caps total military personnel at 800 and civilian contractors at 600, although numbers deployed have been far below the 1,400-person cap for years and now total fewer than 200. President Uribe (2002-2010) embraced Plan Colombia with an aggressive strategy toward the insurgent forces that prioritized citizen security. His Democratic Security Policy, implemented first in a military campaign called Plan Patriota, relied on the military to push FARC forces away from the major cities to remote rural areas and the borderlands. Like his predecessor, President Pastrana, Uribe continued to expand the Colombian military and police. He enhanced the intelligence capacity, professionalization, and coordination of the forces, in part with training provided by U.S. forces. His strategy resulted in expanded state control over national territory and a significant reduction in kidnappings, terrorist attacks, and homicides. In 2007, the Uribe administration announced a shift to a "Policy of Consolidation of Democratic Security." The new doctrine was based on a "whole-of-government" approach to consolidate state presence in marginal areas that were historically neglected—vulnerable to drug crop cultivation, violence, and control by illegal armed groups. Called a strategic leap forward by then-Defense Minister Juan Manuel Santos, in 2009 the new strategy came to be called the National Consolidation Plan (see below). Colombian support for Plan Colombia and for the nation's security program grew under Uribe's leadership. President Uribe levied a "wealth tax" to fund Colombia's security efforts, taxing the wealthiest taxpayers to fund growing defense and security expenditures. Overall U.S. expenditures on Plan Colombia were only a modest portion of what Colombians spent on their own security. By one 2009 estimate, U.S. expenditures were not more than 10% of what Colombians invested in their total security costs. In 2000, Colombia devoted less than 2% of its GDP to military and police expenditures and in 2010 that investment had grown to more than 4% of GDP. One assessment notes "in the end there is no substitute for host country dedication and funding" to turn around a security crisis such as Colombia faced at the beginning of the millennium. In 2008, congressional support for Plan Colombia and its successor programs also shifted. Some Members of Congress believed that the balance of programming was too heavily weighted toward security. Prior to 2008, the emphasis had been on "hard side" security assistance (to the military and police) compared with "soft side" traditional development and rule of law programs. Members debated if the roughly 75%/25% mix should be realigned. Since FY2008, Congress has reduced the proportion of assistance for security-related programs and increased the proportion for economic and social aid. As Colombia's security situation improved and Colombia's economy recovered, the United States also began turning over to Colombians operational and financial responsibility for efforts formerly funded by the U.S. government. The Colombian government "nationalized" the training, equipping, and support for Colombian military programs, such as the counterdrug brigade, Colombian Army aviation, and the air bridge denial program. U.S. funding overall began to decline. The nationalization efforts were not intended to end U.S. assistance, but rather to gradually reduce it to pre-Plan Colombia levels, adjusted for inflation. A key goal of Plan Colombia was to reduce the supply of illegal drugs produced and exported by Colombia but the goals became broader over time. Bipartisan support for the policy existed through three U.S. Administrations—President Bill Clinton, President George W. Bush, and President Barack Obama. Plan Colombia came to be viewed by some analysts as one of the most enduring and effective U.S. policy initiatives in the Western Hemisphere. Some have lauded the strategy as a model. In 2009, William Brownfield, then-U.S. Ambassador to Colombia, described Plan Colombia as "the most successful nation-building exercise that the United States has associated itself with perhaps in the last 25-30 years." Other observers, however, were critical of the policy as it unfolded. Many in the NGO and human rights community maintained the strategy, with its emphasis on militarization and security, was inadequate for solving Colombia's persistent, underlying problems of rural violence, poverty, neglect and institutional weakness. Nevertheless, it appears that improvements in security conditions have been accompanied by substantial economic growth and a reduction in poverty levels over time. The National Consolidation Plan first launched during the Uribe Administration, (renamed the National Plan for Consolidation and Territorial Reconstruction), was designed to coordinate government efforts in regions where marginalization, drug trafficking, and violence converge. The whole-of-government consolidation was to integrate security, development, and counternarcotics to achieve a permanent state presence in vulnerable areas. Once security forces took control of a contested area, government agencies in housing, education, and development would regularize the presence of the state and reintegrate the municipalities of these marginalized zones into Colombia. The plan had been restructured several times by the Santos government. The United States supported the Colombian government's consolidation strategy through an inter-agency program called the Colombia Strategic Development Initiative (CSDI). CSDI provided U.S. assistance to "fill gaps" in Colombian government programming. At the U.S. Embassy in Colombia, CSDI coordinated efforts of the U.S. Agency for International Development (USAID), the State Department's Narcotics Affairs Section, the U.S. Military Group, and the Department of Justice to assist Colombia in carrying out the consolidation plan by expanding state presence and promoting economic opportunities in priority zones. It combined traditional counternarcotics assistance for eradication, interdiction, alternative development, and capacity building for the police, military, and justice sector institutions with other economic and social development initiatives. As the peace agreement between the FARC and the government moved forward into implementation, the focus of U.S. assistance to Colombia has shifted again. With a foundation of the work done to advance consolidation, U.S. assistance has begun to aid in post-conflict planning and support Colombia's transition to peace by building up democratic institutions, protecting human rights and racial and ethnic minorities, and promoting economic opportunity. USAID's country cooperation strategy for 2014-2018 anticipated the Colombian government reaching a negotiated agreement with the FARC, but remained flexible if an agreement was not signed. It recognized early implementation efforts, especially in the first 24 months after signature, would be critical to demonstrate or model effective practices. In the next five years, it envisioned Colombia evolving from aid recipient to provider of technical assistance to neighbors in the region. Consolidating state authority and presence in the rural areas with weak institutions remains a significant challenge following the FARC's disarmament in the summer of 2017. Reintegration of the FARC and possibly other insurgent forces, such as the ELN, will be expensive and delicate. In particular, critics of the consolidation efforts of the Colombian government maintain that the Santos administration often lacked the commitment to hand off targeted areas from the military to civilian-led development and achieve locally led democratic governance. Consolidation efforts suffered from low political support, disorganization at the top levels of government, and failure to administer national budgets effectively in more remote areas, among other challenges. In August 2018, shortly after President Duque took office, USAID announced a framework of priorities for U.S. economic development assistance to Colombia. Some of these priorities include promoting and supporting a whole-of-government strategy to include the dismantling of organized crime; increasing the effectiveness of Colombia's security and criminal justice institutions; promoting enhanced prosperity and job creation through trade; improving the investment climate for U.S. companies; and advancing Colombia's capacity to strengthen governance and transition to sustainable peace, including reconciliation among victims, ex-combatants, and other citizens. The U.S. Congress initially approved legislation in support of Plan Colombia in 2000, as part of the Military Construction Appropriations Act of 2001 ( P.L. 106-246 ). Plan Colombia was never authorized by Congress, but it was funded annually through appropriations. From FY2000 through FY2016, U.S. funding for Plan Colombia and its follow-on strategies exceeded $10 billion in State Department and Defense Department programs. From FY2000 to FY2009, the United States provided foreign operations assistance to Colombia through the Andean Counterdrug Program (ACP) account, formerly known as the Andean Counterdrug Initiative, and other aid accounts. In FY2008, Congress continued to fund eradication and interdiction programs through the ACP account, but funded alternative development and institution building programs through the Economic Support Fund (ESF) account. In the FY2010 request, the Obama Administration shifted ACP funds into the International Narcotics Control and Law Enforcement (INCLE) account. Since FY2008, U.S. assistance has gradually declined because of tighter foreign aid budgets and nationalized Plan Colombia-related programs. In FY2014, in line with other foreign assistance reductions, funds appropriated to Colombia from State Department accounts declined to slightly below $325 million. In FY2015, Congress appropriated $300 million for bilateral assistance to Colombia in foreign operation. The FY2016 Omnibus Appropriations bill ( P.L. 114-113 ) provided Colombia from U.S. State Department and U.S. Agency for International Development accounts, slightly under $300 million, nearly identical to that appropriated in FY2015 (without P.L. 480, the Food for Peace account, the total for FY2016 was $293 million as shown in Table 1 ). In FY2017, Congress funded a program the Obama Administration had proposed called "Peace Colombia" to re-balance U.S. assistance to support the peace process and implementation of the accord. In May 2017, Congress approved a FY2017 omnibus appropriations measure, the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ), which funded the various programs of Peace Colombia at $391.3 million. In the FY2017 legislation, Congress appropriated the following: The ESF account increased to $187 million (from $134 million in FY2016) to build government presence, encourage crop substitution to replace drug crops, and provide other assistance to conflict victims, including Afro-Colombian and indigenous communities. However, only $180 million was subsequently allocated. INCLE funding increased to $143 million with a focus on manual eradication of coca crops, support for the Colombian National Police, and judicial reform efforts. INCLE funding also included $10 million for Colombian forces' training to counterparts in other countries. $38.5 million in Foreign Military Financing (FMF); and $21 million in Nonproliferation, Anti-Terrorism, Demining, and Related Programs (NADR), which was a relatively large increase from under $4 million in FY2016 to focus on the demining effort. How the Trump Administration will engage with the issues of supporting post-conflict stability in Colombia has not been clearly defined by either the State Department or other executive departments. For example, the Trump Administration's proposed foreign aid budget for FY2018 would have reduced assistance to Colombia to $251 million. However, the FY2018 omnibus appropriations measure, approved by Congress in March 2018 ( P.L. 115-114 ), again included $391.3 million to support Colombia's transition to peace. The Trump Administration's FY2019 budget request for Colombia is $265 million, approximately a 32% reduction from the $391.3 million appropriated by Congress in FY2018. However, the House and Senate appropriations bills, H.R. 6385 and S. 3108 , again would support the funding level of $391.3 million. The FY2019 Administration request would reduce post-conflict recovery programs and place greater emphasis on counternarcotics and security. Below, Table 1 provides account data from the annual international affairs congressional budget justification documents. The information about DOD-funded programs was provided to the Congressional Research Service by DOD analysts in December 2015 and October 2017 (and has not been updated). The breakout of DOD assistance to Colombia is shown in Table 2 . . Colombia also has received additional U.S. humanitarian funding to help it cope with more than 1 million Venezuelan migrants. As of September 30, 2018, U.S. government humanitarian funding for the Venezuela response totaled approximately $96.5 million for both FY2017 and FY2018 combined, of which $54.8 million was for Colombia. (Humanitarian funding is drawn primarily from the global humanitarian accounts in annual Department of State/Foreign Operations appropriations acts.) In addition, the U.S. Navy hospital ship USNS Comfort is on an 11-week medical support mission deployed through the end of 2018 to work with government partners, in part to assist with arrivals from Venezuela. In Colombia, the U.S. response aims to help the Venezuelan arrivals as well as the local Colombian communities that are hosting them. In addition to humanitarian assistance, the United States is providing $37 million in bilateral assistance to support medium- and longer-term efforts by Colombia. Some Members of Congress have been deeply concerned about human rights violations in Colombia—especially those perpetrated by any recipients or potential recipients of U.S. assistance. In Colombia's multisided, 50-year conflict, the FARC and ELN, the paramilitaries and their successors, and Colombia's security forces have all committed serious violations. Colombians have endured generations of noncombatant killings, massacres, kidnappings, forced displacements, forced disappearances, land mine casualties, and acts of violence that violate international humanitarian law. The extent of the crimes and the backlog of human rights cases to be prosecuted have overwhelmed the Colombian judiciary, which some describe as "inefficient" and overburdened. The United Nations and many human rights groups maintain that although some prosecutions have gone forward, most remain unresolved and the backlog of cases has been reduced slowly. In addition to the problem of impunity for such serious crimes, continued violations remain an issue. Since 2002, Congress has required in the annual foreign operations appropriations legislation that the Secretary of State certify annually to Congress that the Colombian military is severing ties to paramilitaries and that the government is investigating complaints of human rights abuses and meeting other human rights statutory criteria. (The certification criteria have evolved over time. ) For several years, certification was required before 30% of funds to the Colombian military could be released. The FY2014 appropriations legislation requires that 25% of funding under the Foreign Military Financing (FMF) program be held back pending certification by the Secretary of State. Some human rights groups have criticized the regular certification of Colombia, maintaining that evidence they have presented to the State Department has contradicted U.S. findings. However, even some critics have acknowledged the human rights conditions on military assistance to Colombia to be "a flawed but useful tool" because the certification process requires that the U.S. government regularly consult with Colombian and international human rights groups. Critics acknowledge that over time, conditionality can improve human rights compliance. Additional tools for monitoring human rights compliance by Colombian security forces receiving U.S. assistance are the so-called "Leahy Law" restrictions, which Congress first passed in the late 1990s prior to the outset of Plan Colombia. First introduced by Senator Patrick Leahy, these provisions deny U.S. assistance to a foreign country's security forces if the U.S. Secretary of State has credible information that such units have committed "a gross violation of human rights." The provisions apply to security assistance provided by the State Department and DOD. The Leahy Law under the State Department is authorized by the Foreign Assistance Act (FAA) of 1961, as amended, and is codified at 22 U.S.C. 2378d (§520M of the FAA). The DOD Leahy provisions, which for years applied just to DOD training, now include a broader range of assistance, as modified in the FY2014 appropriations legislation. The provision related to the Leahy Laws for DOD assistance is codified at 10 U.S.C. 362, and prohibits "any training, equipment, or other assistance," to a foreign security force unit if there is credible information that the unit has committed a gross violation of human rights. Both the State Department and DOD Leahy provisions require the State Department to review and clear—or vet—foreign security forces to determine if any individual or unit is credibly believed to be guilty of a gross human rights violation. Leahy vetting is typically conducted by U.S. embassies and State Department headquarters. Reportedly on an annual basis about 1% of foreign security forces are disqualified from receiving assistance under the Leahy provisions, although many more are affected by administrative issues and are denied assistance until those conditions are resolved. Tainted security force units that are denied assistance may be remediated or cleared, but the procedures for remediation differ slightly between the DOD and State (or FAA) provisions. Because of the large amount of security assistance provided to Colombian forces (including the military and police), the State Department reportedly vets more candidates for assistance in Colombia than in any other country. In the late 1990s, poor human rights conditions in Colombia were a driving concern for developing the Leahy Law provisions. The U.S. Embassy in Bogotá, with nearly two decades of experience in its vetting operations, has been cited as a source of best practices for other embassies seeking to bring their operations into compliance or enhance their performance. State Department officials have cited Colombia as a model operation that has helped Colombia to improve its human rights compliance. However, some human rights organizations are critical of the Leahy vetting process in Colombia, and cite the prevalence of extrajudicial executions allegedly committed by Colombian military units as evidence that these restrictions on U.S. assistance have failed to remove human rights violators from the Colombian military. A human rights nongovernmental organization, Fellowship of Reconciliation, has published reports alleging an association between false positive killings and Colombian military units vetted by the State Department to receive U.S. assistance. However, some have questioned the group's methodology. Some human rights organizations contend that the U.S. government has tolerated abusive behavior by Colombian security forces without taking action or withholding assistance. Measured exclusively in counternarcotics terms, Plan Colombia has been a mixed success. Colombia remains the dominant producer of cocaine and in the DEA's National Drug Threat Assessment for 2017 continued to be the source for 95% of cocaine seized in the United States. Enforcement, eradication, and improved security squeezed production in Colombia, so that in 2012, Peru reemerged as the global leader in cocaine production, surpassing Colombia, for a year or so. In the early 2000s, given Colombia's predominance as the source of cocaine destined for U.S. markets and its status as the second-largest producer of heroin consumed in the United States, eradication of coca bush and opium poppy (from which heroin is derived) was an urgent priority and became the preferred tool for controlling the production of these drugs. Another critical component of the drug supply reduction effort was alternative development programs funded by the U.S. Agency for International Development (USAID) to assist illicit crop cultivators with transitioning to licit crop production and livelihoods. Analysts have long debated how effective Plan Colombia and its follow-on strategies were in combating illegal drugs. Although Plan Colombia failed to meet its goal of reducing the cultivation, processing, and distribution of illicit drugs by 50% in its original six-year time frame, Colombia has sustained significant reductions in coca cultivation in recent years. According to U.S. estimates, cultivation of coca declined from 167,000 hectares in 2007 to 78,000 hectares in 2012. (Poppy cultivation declined by more than 90% between 2000 and 2009.) According to U.S. government estimates, Colombia's potential production of pure cocaine fell to 170 metric tons in 2012, the lowest level in two decades. However, it started to rise slightly in 2013, and more dramatically in 2014 through 2016. In those years, cultivation of coca and production of cocaine grew significantly in part due to ending the aerial eradication of coca crops. In 2015, following a U.N. agency determination that the herbicide used to spray coca crops was probably carcinogenic, Colombia's minister of health determined that aerial eradication of coca was not consistent with requirements of Colombia's Constitutional Court. In 2016, as noted above, the U.S. DEA reported that 95% of cocaine seized in the United States originated in Colombia. According to U.S. Office of National Drug Control Policy, Colombia in 2017 cultivated an unprecedented 209,000 hectares of coca, from which cocaine is derived, capable of generating 921 metric tons of cocaine. The United Nations estimates for 2017, which typically differ in quantity but follow the same trends as U.S. estimates, maintained that Colombia's potential production of cocaine reached nearly 1,370 metric tons, 31% above its 2016 estimate. Even with Colombia's economic stability and improving security, cocaine exports (primarily to the U.S. market) remain a major concern for U.S. lawmakers. However, in drug interdiction, Colombia has set records for many years and is considered a strong and reliable U.S. partner. The United Nations Office on Drugs and Crime ( Table 4 ), shows Colombia cultivating 146,000 hectares of coca in 2016, a 52% increase over 2015 and another increase to 171,000 hectares, a 17% increase, in 2017. Although cocaine seizures were quite high in both years, the interdiction of cocaine was insufficient to counter the large increases in production. Both manual eradication and aerial eradication were central components of Plan Colombia to reduce coca and poppy cultivation. Manual eradication is conducted by teams, usually security personnel, who uproot and kill the plant. Aerial eradication involves spraying the plants from aircraft with an herbicide mixture to destroy the drug crop, but it may not kill the plants. In the context of Colombia's continuing internal conflict, manual eradication was far more dangerous than aerial spraying. U.S. and Colombian policymakers recognized the dangers of manual eradication and, therefore, employed large-scale aerial spray campaigns to reduce coca crop yields, especially from large coca plantations. Colombia is the only country globally that aerially sprayed its illicit crops, and the practice has been controversial for health and environmental reasons, resulting in a Colombian decision to end aerial eradication in 2015. Since 2002, as a condition of fully funding the spraying program, Congress has regularly directed the State Department, after study and consultation with the U.S. Environmental Protection Agency and other relevant agencies, to certify that the spraying did not "pose unreasonable risks or adverse effects to humans or the environment." This certification requirement was included most years in the annual foreign operations appropriations legislation. Some analysts have also raised questions about the monetary and collateral costs of aerial eradication compared with other drug supply control strategies, its effectiveness, and its limited effect on the U.S. retail price of cocaine. U.S. State Department officials attribute Colombia's decline in coca cultivation after 2007 and prior to 2013 to the persistent aerial eradication of drug crops in tandem with manual eradication where viable. Between 2009 and 2013, Colombia aerially sprayed roughly 100,000 hectares annually. In 2013, however, eradication efforts declined. Colombia aerially eradicated roughly 47,000 hectares. It manually eradicated 22,120 hectares, short of the goal of 38,500 hectares. This reduction had a number of causes: the U.S.-supported spray program was suspended in October 2013 after two U.S. contract pilots were shot down, rural protests in Colombia hindered manual and aerial eradication efforts, and security challenges limited manual eradicators working in border areas. In late 2013, Ecuador won an out-of-court settlement in a case filed in 2008 before the International Court of Justice in The Hague for the negative effects of spray drift over its border with Colombia. In negotiations with the FARC, the government and the FARC provisionally agreed in May 2014 that voluntary manual eradication would be prioritized over forced eradication. Aerial eradication remained a viable tool in the government's drug control strategy, according to the agreement, but would be permitted only if voluntary and manual eradication could not be conducted safely. In April 2015, the Santos administration determined that glyphosate, a broad-spectrum, nonselective herbicide used commercially, but in Colombia sprayed on coca plants to eradicate them, was "probably carcinogenic" to humans in a review published by a World Health Organization (WHO) affiliate. In October 2015, the government ended spraying operations and began to implement a new public health approach toward illicit drugs, one that proponents suggested would reduce human rights violations. On the supply side, Colombia's new drug policy gives significant attention to expanding alternative development and licit crop substitution while intensifying interdiction efforts. The State Department in its 2015 International Narcotics Control Strategy Report (INCSR), however, warned that illicit cultivation was expanding in areas long off-limits to aerial spraying, including national parks, a buffer zone with Ecuador where aerial eradication has been restricted, and in indigenous or protected Afro-Colombian territories. Colombian interdiction practices are deemed some of the most effective in the world. The Colombian government reported seizing more than 207 metric tons (mt) of cocaine base in 2014 and that seizure total doubled by 2017 with capture of 442 mt of cocaine. According to the U.S. State Department's 2018 INCSR , Colombia also seized 197 mt of marijuana, 348 kilograms of heroin, and destroyed more than 3,400 cocaine base and hydrochloride labs. USAID funds and runs alternative development programs in Colombia to assist communities with transitioning from a dependency on illicit crops to licit employment and livelihoods. Alternative development was once focused narrowly on crop substitution and assistance with infrastructure and marketing. Since the Colombian government's shift to a consolidation strategy, USAID has supported "consolidation and livelihoods" programming in 40 of the 58 strategically located, conflict-affected municipalities targeted by the government's National Consolidation Plan. To facilitate economic development, USAID funds initiatives that assist farmers and others with shifting from coca growing to licit economic opportunities. These programs are designed to strengthen small farmer producer organizations, improve their productivity, and connect them to markets. Some observers maintain that poor and unsustainable outcomes from alternative development programs while the Colombian conflict was still under way resulted from ongoing insecurity and lack of timeliness or sequencing of program elements. The renewed commitment to alternative development and crop substitution in the 2016 peace accord with the FARC may be similarly challenged. Formal implementation of the peace accord on drug eradication and crop substitution began in late May 2017 with collective agreements committing communities to replace their coca crops with licit crops. In some regions, the program is extended to families who cultivate coca and also to producers of legal crops and landless harvesters. The Colombian government also committed to a combined approach of both voluntary and forced manual eradication. The government's goal set for 2017 was eradicating 100,000 hectares of coca, 50,000 through forced manual eradication and 50,000 through "crop substitution" accords reached with coca farming households who would voluntary eradicate. At the U.S.-Colombia High Level Dialogue held in Bogotá in March 2018, a renewed commitment to the enduring partnership between the United States and Colombia was announced. A major outcome was a U.S.-Colombia pledge to reduce illegal narcotics trafficking through expanded counternarcotics cooperation. The new goal set was to reduce Colombia's estimated cocaine production and coca cultivation to 50% of current levels by 2023. In addition, a memorandum of understanding was signed to combat the illegal gold mining that funds transnational criminal organizations. Although President Duque appears determined to pursue a more aggressive approach to drug policy, he has not clearly stated how his approach to counternarcotics will differ from that of his predecessor. The government may restart aerial eradication, a strategy that ended in 2015 due to the Colombian Health Ministry's concerns over cancer-causing potential of the herbicide glyphosate, but no precise plans for restarting the program have been announced in the Duque Administration's first three months in office. Experimentation with delivering glyphosate by drones (rather than planes) began in June 2018 under the Santos Administration and is continuing under the Duque government. On October 1, 2018, President Duque authorized police to confiscate and destroy any quantity of drugs found on persons in possession of them, resulting in the seizure of more than 7 metric tons of drugs in less than two weeks. This enforcement measure may violate a 1994 Colombian Constitutional Court ruling, however, in which Colombians may carry small doses of drugs for personal use, including marijuana, hashish, and cocaine. Several court challenges have been filed that seek to nullify the Duque decree on constitutional grounds of protected personal use. Drug trafficking continues to trigger conflict over land in Colombia while affecting the most vulnerable groups, including Afro-Colombian, peasant, and indigenous populations. Some analysts warn that national and international pressure for drug eradication could also lead to increased human rights violations, including health consequences by reviving aerial spraying of drug crops and government actions to forcibly break up demonstrations by coca producers who resist eradication. Some analysts have advocated that investments to lower drug supply need to go beyond eradication, which has not been a lasting approach to reducing drug crop cultivation. For instance, the government could provide economic and education opportunities to at-risk youth to enhance their role in peace building and to prevent their recruitment into the drug trade and other illegal activity. Economic relations between Colombia and the United States have deepened. The U.S.-Colombia Free Trade Agreement (FTA) entered into force in May 2012. By 2020, it will phase out all tariffs and other barriers to bilateral trade between Colombia and the United States, its largest trade partner. Since the U.S.-Colombia FTA went into force, the stock of U.S. investment in Colombia surpassed $7 billion in 2014 but dropped to $6.2 billion in 2016 (on a historical cost basis), concentrated mostly in mining and manufacturing. According to the U.S. Department of Commerce, U.S. exports to Colombia exceeded $26.8 billion in 2016 and Colombia was the 22 nd -largest market for U.S. exports; however, U.S. imports from Colombia declined between 2015 and 2016. Major U.S. exports to Colombia include oil (noncrude oil products including gasoline), machinery, cereals, organic chemicals, and plastic. Because 65% of U.S. imports from Colombia are crude oil imports, much of the decline in value was caused by the sharp fall in oil prices that began in 2014. Major U.S. imports beside crude oil, include gold, coffee, cut flowers, and fruits. Congressional interest in Colombia now extends far beyond security and counternarcotics and has grown in the area of bilateral trade following implementation of the U.S.-Colombia FTA, (also known at the U.S.-Colombia Trade Promotion Agreement). Colombia is a founding member of the Pacific Alliance, along with Chile, Mexico, and Peru, and has sought to deepen trade integration and cross-border investment with its partners in the alliance while reducing trade barriers. The Pacific Alliance aims to go further by creating a common stock market, allowing for the eventual free movement of businesses and persons, and serving as an export platform to the Asia-Pacific region. Colombia's leadership role in the Pacific Alliance and Colombia's accession to the Organization for Economic Cooperation and Development (OECD) in May 2018, following a review of the country's macroeconomic policies and changes, are major new developments. The accession to the OECD was approved by Colombia's lower house in October 2018 and the Senate in November 2018, but it remained under final review by Colombia's Constitutional Court in early February 2019. The Santos administration pushed to meet the criteria required for OECD membership because it maintained that such recognition signified Colombia's attainment of world-class development standards and policies. Colombia has made progress on trade issues such as copyright, pharmaceuticals, fuel and trucking regulations, and labor concerns (including subcontracting methods and progress on resolving cases of violence against union activists). Congress remains interested in Colombia's future because the country has become one of the United States' closest allies. With 17 years of investment in Colombia's security and stability, some maintain that there has already been a strong return on U.S. investment. Plan Colombia and its successor strategies broadened from counternarcotics to include humanitarian concerns, efforts to bolster democratic development and human rights protections, and trade and investment to spark growth. The record expansion of Colombia's coca crop and increasing cocaine exports to the United States, however, may significantly hinder the effort to consolidate peace in Colombia and could potentially increase corruption and extortion. A significant portion of the Colombian public remains skeptical of the peace process and the FARC's role in Colombia's democracy. Other Colombians maintain that support for peace programs in Colombia is important not only to benefit former FARC or other demobilized combatants but also to fulfill promises the government made in the peace accords to the country's 8.6 million victims of the five-decade conflict. As President Duque concluded his first 100 days in office, his government faced overlapping challenges: (1) an upsurge in illicit drug crops, which had set records in 2016 and 2017; (2) implementation of provisions of the peace accord negotiated by former president Santos but marred by slow implementation, attacks on land and human rights activists, and projected budgetary shortfalls; (3) renewed violent competition among criminal groups in rural areas, some of which reportedly are sheltering in Venezuela; and (4) Venezuela's humanitarian crisis, which resulted in a surge of migrants fleeing to or through Colombia. The annual level of foreign assistance provided by the U.S. Congress for Colombia began to decline in FY2008 and then gradually increased in FY2017 and FY2018 to support peace and implementation of the FARC-government peace accord. Some Members of Congress may want to build on cooperation with Colombian partners to continue to train Central Americans and other third-country nationals in counternarcotics and security, including programs in citizen security, crime prevention and monitoring, military and police capacity building, and hostage negotiation and cybersecurity. Congress may continue to closely monitor Colombia's domestic security situation. It also may continue to oversee issues such as drug trafficking; Colombia's effort to combat other illegal armed groups such as Bacrim; the status of human rights protections; and the expansion of health, economic, environmental, energy, and educational cooperation. Congress may seek to foster Colombian leadership in the region to counter growing political instability in Venezuela. The U.S. Congress has been interested in expanding investment and trade opportunities both bilaterally with Colombia and within regional groupings, such as the Pacific Alliance. Some analysts contend that U.S.-Colombian trade improvements rest on the strength of the overall relationship between Colombia and the United States.
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A key U.S. ally in the Latin American region, Colombia endured an internal armed conflict for half a century. Drug trafficking fueled the violence by funding both left-wing and right-wing armed groups. Some analysts feared Colombia would become a failed state in the late 1990s, but the Colombian government devised a new security strategy, known as Plan Colombia, to counter the insurgencies. Originally designed as a 6-year program, Plan Colombia ultimately became a 17-year U.S.-Colombian bilateral effort. The partnership focused initially on counternarcotics and later on counterterrorism; it then broadened to include sustainable development, human rights, trade, regional security, and many other areas of cooperation. Between FY2000 and FY2016, the U.S. Congress appropriated more than $10 billion to help fund Plan Colombia and its follow-on programs. For FY2018, Congress appropriated $391.3 million in foreign aid for Colombia, including assistance to promote peace and end the conflict. President Juan Manuel Santos (2010-2018) made concluding a peace accord with the Revolutionary Armed Forces of Colombia (FARC)—the country's largest leftist guerrilla organization—his government's primary focus. Following four years of formal peace negotiations, Colombia's Congress ratified the FARC-government peace accord in November 2016. During a U.N.-monitored demobilization effort in 2017, approximately 11,000 FARC disarmed and demobilized. This figure included FARC who had been held in prison for crimes of rebellion and those making up FARC militias, who were accredited by the Colombian government as eligible to demobilize. On August 7, 2018, Iván Duque, a senator from the conservative Democratic Center party, was inaugurated to a four-year presidential term. Duque, who also worked at the Inter-American Development Bank in Washington, DC, and is Colombia's youngest president in a century, campaigned as a critic of the peace accord with the FARC. His party objected to specific measures concerning justice and political representation. Some observers maintain that his election has generated uncertainty for implementation of the accord. Shortly after taking office, Duque suspended peace talks with the National Liberation Army (ELN), the country's second-largest rebel group, which had begun under President Santos. Since the ratification of the peace accord, Colombia's long-term strategy has evolved from defeating insurgents to post-conflict stabilization. Many considered Plan Colombia and its successor strategies a remarkable advance, given the country's improvements in security and economic stability. Nevertheless, recent developments have called into question Colombia's progress. The FARC's demobilization has triggered open conflict among armed actors (including FARC dissidents and transnational criminal groups), which seek to control drug cultivation and trafficking, illegal mining, and other illicit businesses that the demobilized FARC abandoned. The ongoing lack of governance in remote rural areas recalls the conditions that originally gave rise to the FARC and other armed groups. Many observers continue to raise concerns about the country's human-rights conditions, sharp increases in coca cultivation and cocaine production, and problems stemming from the failing authoritarian government of neighboring Venezuela, which shares a nearly 1,400-mile border with Colombia. Venezuela's humanitarian crisis has set in motion an exodus of migrants, many of whom have sought temporary residence (or extended stays) in Colombia. Political upheaval has added yet more uncertainty after the United States and many other Western Hemisphere and European nations, including Colombia, called for a democratic transition in Venezuela and recognized the president of the Venezuelan National Assembly, Juan Guaidó, as the country's interim president in January 2019. The U.S.-Colombia Trade Promotion Agreement went into force in May 2012. The United States remains Colombia's top trade partner. After several years of annual growth exceeding 4%, one of the steadiest expansion rates in the region, Colombia grew by an estimated 2.7% in 2018. The FARC-government peace accord is projected to cost more than $40 billion to implement over 15 years, adding to the polarization over the controversial peace process. For additional background, see CRS In Focus IF10817, Colombia's 2018 Elections, CRS Report R44779, Colombia's Changing Approach to Drug Policy, CRS Report R42982, Colombia's Peace Process Through 2016, and CRS Report RL34470, The U.S.-Colombia Free Trade Agreement: Background and Issues.
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In analyzing the effects of U.S. individual income tax rates, it is important to be clear about which rates are being discussed. Among tax analysts, the three most widely used measures are statutory rates (STRs), marginal effective rates (MERs), and average effective rates (AERs). Each has its own applications. Those interested in how individual income taxes affect the economic behavior of households should have a clear understanding of the ways in which the three rates differ and the implications of these differences for the economic analysis of income taxes. STRs are the rates prescribed by law that apply to specified ranges of taxable income. For any individual, the applicable rate depends on her/his taxable income. Since the federal income tax is progressive in nature, taxpayers with relatively low taxable incomes face lower STRs than do taxpayers with relatively high taxable incomes. Effective rates, by contrast, whether marginal or average, measure how STRs are affected by tax provisions that modify someone's taxable income or tax liability. A taxpayer's MER shows the percentage of an additional dollar of income that is taxed, while her/his AER indicates how much of her/his total income is taxed. In general, someone's average tax rate is lower than her/his marginal tax rate. Still, for many individuals, the interaction between special provisions in the tax code and their specific financial circumstances leads to differences between their effective and statutory rates. Among the provisions that can drive a wedge between the two rates are the earned income tax credit (EITC), the alternative minimum tax (AMT), and personal exemptions and deductions. Personal circumstances that can cause MERs to diverge from STRs include the sources of income, itemized deductions, the number of children (if any) eligible for the child tax credit and the EITC, and filing status. Most economists believe that taxpayers change their economic behavior in response to MERs, not to statutory rates. Drawing on a standard model of consumer behavior, they argue that a person's MER influences important decisions concerning whether and how much to work, how much to spend, and how much to save. For example, someone's MER may help determine whether he takes on an overtime shift, bargains for wages and benefits, takes a second job, or even enters the labor force. The idea that MERs help shape an individual's economic behavior can be extended to an entire tax system, including federal payroll and excise taxes and state and local taxes. A broader analysis along these lines, however, goes beyond the scope of this report. The current income tax is largely a product of the Tax Reform Act of 1986 (TRA86; P.L. 99-514 ). Among other things, the act reduced the individual tax rate structure to two statutory rates: 15% and 28%. TRA86 also imposed a 5% surcharge on the taxable income of certain upper-income households, effectively adding a third marginal tax rate of 33%. Since the enactment of TRA86, several other major changes in the federal individual income tax rate structure have been made. The Omnibus Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508 ) eliminated the 5% surcharge and replaced it with a statutory rate of 31%. In addition, OBRA90 imposed a limit on the amount of itemized deductions upper-income households could claim and accelerated the phaseout of personal exemptions for upper-income households. These provisions had the effect of raising effective tax rates above statutory tax rates for affected taxpayers. The Omnibus Budget Reconciliation Act of 1993 (OBRA93; P.L. 103-66 ) added two new statutory rates at the upper end of the income scale: 36% and 39.6%. It also delayed the indexation of the two new tax brackets for one year and permanently extended the limitation on itemized deductions and the accelerated phaseout of the personal exemption from OBRA90. Eight years later, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16 ) added a new 10% statutory rate. It also included a phased-in reduction in the top four statutory rates to 25%, 28%, 33%, and 35%. Several other provisions of the act modified the tax brackets and limitations on personal exemptions and deductions for higher-income taxpayers. The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L. 108-27 ), the Working Families Tax Relief Act of 2004 (WFTRA; P.L. 108-311 ), and the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA; P.L. 109-222 ) collectively accelerated and extended the tax rate reductions enacted under EGTRRA through 2010. Under a last-minute agreement between President Obama and congressional leaders from both parties, Congress extended the Bush-era individual income tax cuts through 2012 under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUC; P.L. 111-312 ). Facing the unwanted prospect of an across-the-board increase in all STRs, the 112 th Congress permanently extended (through the American Taxpayer Relief Act of 2012 [ATRA; P.L. 112-240 ]) each of the Bush-era STRs, with one exception: the top rate increased from 35% to 39.6%. Six years passed before Congress made another significant change in individual income tax rates. Through P.L. 115-97 , often referred to as the Tax Cuts and Jobs Act, Congress temporarily reduced five of the seven individual income tax rates under prior law. For tax years beginning after December 31, 2017, and before January 1, 2026, individual income tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%; they are set to return to the levels that applied in 2017, for tax years beginning on or after January 1, 2026. Each act is described in greater detail below. Among its many changes, TRA86 simplified the individual income tax rate structure for tax years after 1987 by replacing the 14 nonzero statutory rates that applied to the 1985 and 1986 tax years with two such rates: 15% and 28%. Table 3 shows the key elements of the 1988 tax rate structure. These rates applied to capital income as well as to labor income. Although TRA86 established only two statutory individual marginal income tax rates, it included a 5% surcharge on the taxable income of certain upper-income households. This surcharge effectively created a third statutory tax rate of 33% (a 28% statutory tax rate plus a 5% surcharge). Because the surcharge phased in over a certain range of income and then phased out as income increased, statutory tax rates rose to 33% but then fell back to 28%, producing what was known as an income tax rate "bubble." The intent of the surcharge was two-fold: (1) to prevent TRA86 from changing the distribution of the income tax burden among income groups, relative to the distribution under pre-1986 tax law, and (2) to meet specific revenue targets. More specifically, the surcharge was designed to eliminate the tax benefits of both the 15% tax bracket and the personal exemption for upper-income households. For joint returns in 1988, the phaseout of the 15% tax rate started when taxable income exceeded $71,900 and ended when it reached $149,250. For single returns, the 15% tax bracket phased out when taxable income was between $47,050 and $97,620. For heads of households, the phaseout occurred when taxable income fell in the range of $67,200 to $134,930. The phaseout of the personal exemption started immediately after the phaseout of the 15% tax bracket and occurred sequentially for each exemption. This meant that the taxable income range over which the 5% surcharge offset personal exemptions depended on the number of personal exemptions claimed on the tax return. For example, on a joint return claiming two personal exemptions, the 5% surcharge would apply to taxable income between $149,250 and $171,090 ($149,250 plus two times $10,920). On a joint return with four personal exemptions, the 5% surcharge would apply to taxable income between $149,250 and $192,930 ($149,250 plus four times $10,920). To demonstrate how the 5% surcharge worked to "phase out" the tax benefits of the 15% tax bracket, consider the following example based on joint returns for 1988. The difference between taxing the first $29,750 of taxable income at 28% instead of 15% was $3,867.50 (obtained as $29,750 multiplied by 13%, the difference between 28% and 15%). Five percent of the difference between the upper and lower phaseout limits also equaled $3,867.50 ($149,250 less $71,900 multiplied by 5%). Hence, assessing the 5% surcharge on taxable income between $78,400 and $162,770 was equivalent to taxing the first $32,450 of taxable income at 28% rather than 15%. OBRA90 created a three-tiered statutory marginal income tax rate structure. The rates were 15%, 28%, and 31% and applied to tax years beginning in 1991 and thereafter (see Table 5 ). OBRA90 eliminated the tax rate bubble created by TRA86, and replaced it with a limitation on itemized deductions and a new approach to phasing out the tax benefits of the personal exemption for upper-income households. OBRA90 also reintroduced a tax-rate differential for capital gains income. The act limited the tax on capital gains income to a maximum of 28%, starting in 1991. Under TRA86, capital gains was treated as ordinary income and taxed at regular rates that peaked at 33%. OBRA90's limitation on itemized deductions was based on a taxpayer's adjusted gross income (AGI). For tax years starting in 1991 to 1995, allowable deductions were reduced by 3% of the amount by which a taxpayer's AGI exceeded $100,000 (or $50,000 in the case of married couples filing separate returns). For example, if a taxpayer's AGI in 1991 was $110,000, then his itemized deductions would have been reduced by $300 ($110,000 less $100,000 multiplied by .03). This provision effectively raised the marginal income tax rate of affected taxpayers by approximately one percentage point. A dollar of income in excess of $100,000 was taxed as if it were $1.03, since in addition to the tax on an extra dollar of income, the taxpayer lost a tax deduction by giving up $0.03 of itemized deductions. This limitation was scheduled to expire after tax year 1995 under OBRA90, but was later extended. Allowable deductions for medical expenses, casualty and theft losses, and investment interest were not subject to this limitation. For tax years after 1991, the $100,000 threshold was indexed for inflation. OBRA90 phased out the tax benefits of the personal exemption for higher-income households. Each personal exemption was phased out by a factor of 2% for each $2,500 (or fraction thereof) by which a taxpayer's AGI exceeded a given threshold amount. In 1991, the threshold amounts were $150,000 for a joint return, $100,000 for a single return, and $125,000 for a head-of- household return. Starting in 1992, these amounts were indexed for inflation. The phaseout provision was scheduled to expire at the end of 1995. A simple example illustrated how the personal exemption phaseout increased the tax burden on affected taxpayers. In 1991, a joint household whose AGI was $183,000 would have lost 28% of their total personal exemptions. The AGI amount in excess of the threshold in this instance would have been $33,000, or $183,000 AGI minus the $150,000 threshold limit. The $33,000 excess divided by $2,500 would produce a factor of 13.2, which when rounded up would equal 14. This figure is multiplied by 2% to arrive at the final disallowance amount of 28%. Hence, if the family had claimed two personal exemptions, which at $2,150 each would have totaled $4,300, they would have been allowed to deduct $3,096 ($4,300 total personal exemptions less the $1,204 disallowance, which is 28% of the total). OBRA93 made several changes in the individual marginal income tax rate structure. First, it added two new marginal tax rates, 36% and 39.6%, at the upper end of the income spectrum. The 39.6% tax bracket was the result of adding a 10% surtax to the 36% rate for taxpayers with taxable incomes over $250,000 in 1993. Although OBRA93 was enacted in August 1993, the increase in the top marginal tax rates was made effective retroactively to January 1, 1993. Affected taxpayers, however, were not assessed penalties for underpayment of 1993 taxes resulting from the tax rate increase. Taxpayers were also allowed to pay any additional 1993 taxes in three equal installments over a two-year period. Second, OBRA93 delayed indexation of the new top marginal income tax brackets for one year. Hence, the nominal dollar tax brackets for the 36% and 39.6% marginal tax rates remained at the same level for both tax years 1993 and 1994. Finally, OBRA93 made permanent both the itemized deduction limitation and the phaseout of the tax benefits from personal exemptions. EGTRRA made several major changes to the marginal tax rate structure. Many of the act's provisions were set to phase in over a period of time, but subsequent legislation, described in the next section, overrode the schedule originally set by EGTRRA. All of the EGTRRA provisions, as amended, were set to expire at the end of 2010. First, the 2001 act created a new 10% bracket. It applied, beginning in tax year 2002, to the first $12,000 of taxable income for married couples filing jointly, the first $10,000 of taxable income for heads of households, and the first $6,000 of taxable income for single individuals. For tax year 2001, the act created a "rate reduction tax credit," mimicking the effects of the 10% tax rate bracket for most taxpayers. EGTRRA gradually phased in and expanded the bracket over several years, but in 2003-2007, these provisions of EGTRRA were accelerated by subsequent legislation. In 2008, EGTRRA became effective again, setting the 10% marginal tax rate bracket at $7,000 for single filers and $14,000 for joint filers. Starting with tax year 2009, these bracket amounts were indexed for inflation. Second, the 2001 act gradually reduced the top four marginal income tax rates. Under prior income tax law, the top four marginal tax rates were 28%, 31%, 36%, and 39.6%. When fully phased in, the 2001 act reduced the top four marginal income tax rates to 25%, 28%, 33%, and 35%. Once again, under EGTRRA the reductions were scheduled to take place in 2001 through 2006, but subsequent legislation accelerated the EGTRRA phase-in schedule. Third, EGTRRA also repealed the limitation on itemized deductions and personal exemptions for high-income taxpayers. The repeal was phased in between 2006 and 2009. The limitation was completely repealed for 2010, but it was scheduled to reappear again in 2011, once the EGTRRA's tax cuts expire. Fourth, some of the act's measures designed to reduce the marriage penalty affected the rate bracket structure. The act increased the income range of the 15% tax bracket for married couples filing joint returns to twice the income range of the 15% tax bracket for single returns. Under EGTRRA, this provision was scheduled to phase in from 2005 to 2008, but subsequent legislation accelerated the phase-in. Under EGTRRA, the upper dollar limit of the 15% tax bracket for joint returns was set at 180% of the upper dollar limit of the 15% tax bracket for single returns in 2005, 187% of that limit in 2006, 193% of that limit in 2007, and 200% of that limit in 2008 and subsequent years. Finally, the 2001 act increased the standard deduction for joint returns to twice the size of the standard deduction for single returns. The change was scheduled to be phased in over a five-year period, 2005 to 2009, but it was accelerated by the subsequent bills as well. This had the effect of raising the lower income threshold of the lowest tax bracket for married taxpayers. JGTRRA accelerated several changes to the individual income tax rate structure that were first enacted under EGTRRA. It moved forward to 2003 the tax rate reductions, the expansion of the 10% tax bracket, and the widening of the 15% tax bracket for joint returns to make it double the width of the 15% tax bracket for single returns. Under EGTRRA, some of these changes would not have been fully phased in until 2009. JGTRRA also lowered the tax rates for long-term capital gains and dividends. It reduced the top rate to 15%, and allowed a rate of 0% for certain low-income taxpayers. WFTRA extended several tax provisions of JGTRRA that were scheduled to expire at the end of 2004. It extended the expansion of the 10% income tax bracket through 2007, at which point EGTRRA's relevant provisions would be fully phased in, maintaining a constant amount of tax relief. WFTRA also extended marriage penalty relief under EGTRRA from 2005 to 2008. The standard deduction for a married couple filing jointly was set to be equal to double the standard deduction for an unmarried single filer over that period. In addition, the act made the size of the 15% tax bracket for joint filers double that of the tax bracket for single filers from 2005 to 2007. As a result, in both cases, the marriage penalty relief extended from 2005 to 2010, before ending under the EGTRRA sunset provision. The reductions in tax rates for long-term capital gains and dividends under JGTRRA were set to expire at the end of 2008; TIPRA extended them through the end of 2010. A last-minute agreement in 2010 between President Obama and congressional leaders of both parties cleared the way for an extension of all the Bush-era individual tax cuts through the end of 2012. TRUC served as the legislative vehicle for the extension. Facing a reversion of each statutory individual income tax rate to its level before the enactment of EGTRRA starting January 1, 2013, Congress and President Obama agreed on legislation (ATRA) to extend permanently each of the Bush-era rates and restore the top marginal tax rate to its pre-EGTRRA level of 39.6%. The act also permanently extended the repeal of the phaseout of the personal exemption included in EGTRRA, but it restricted the repeal of the phaseout to taxpayers with AGIs of $250,000 or less for single filers and $300,000 or less for married couples filing jointly. Taxpayers with AGIs above these inflation-adjusted amounts were subject to the phaseout. The same rule applied to the repeal under EGTRRA of the Pease limitation on the amount of itemized deductions an upper-income taxpayer could take. Individual marginal income tax rates did not change after ATRA until the enactment of P.L. 115-97 in December 2017. The act made significant changes to a number of individual income tax provisions, including individual tax rates and the standard deduction. For tax years beginning in 2018 and ending before 2027, the individual income tax rate structure consists of seven brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. (The rates are scheduled to revert to their levels in 2017 starting in 2026.) For individuals receiving income from passthrough businesses (i.e., partnerships, S corporations, and sole proprietorships), the current rates can be adjusted downward as a result of a new deduction under Section 199A; the deduction is equal to up to 20% of a noncorporate business owner's qualified income from a qualified trade or business. The 2017 tax revision also made the following changes in these key elements of the individual income tax for the 2018 to 2025 tax years: It terminated the personal exemption (which was $4,050 in 2017). It increased the standard deduction (which is indexed for inflation using the chained consumer price index for urban consumers) for nonitemizers to $24,000 for joint filers and $18,000 for head-of-household filers, and $12,000 for single filers, from 2018 to 2025. It eliminated the deduction for miscellaneous expenses from 2018 through 2025. It suspended the overall limit on itemized deductions for certain high-income taxpayers. During periods of relatively high inflation, a progressive income tax based on tax brackets set in nominal dollars can lead to automatic tax increases, and these increases can lead to unintended changes in the overall distribution of the tax burden by income class. This is because nominal incomes rise faster than real incomes, all other things being equal. As a result, tax burdens for taxpayers become larger than what lawmakers had intended when they established existing statutory tax rates. In the absence of indexation of the elements of the tax code determining the tax burdens of individuals, an increasing share of taxpayers will face growing tax liabilities because their nominal incomes are rising, irrespective of what happens to their real incomes. The effects of inflation on income tax liabilities can be substantial, even in periods of low inflation, such as the last two decades. According to the Bureau of Labor Statistics, $1,000 in November 1988 had the buying power of $2,095.08 in November 2018. Year-to-year changes can be negligible, but over a decade or so, those changes can add up to make a substantial difference through the power of compounding. A simplified hypothetical example illustrates the impact that a lack of indexation can have over time for the tax burdens (as measured by the average income tax rate) of individual taxpayers. The results are summarized in Table 1 . Assume that the individual income tax structure from 1988 applied without indexation (or any other changes) in 2017. Also assume that a household with a husband, wife, and two children had an adjusted gross income (AGI) of $35,000 in 1988, was eligible for no tax credits, and filed a joint tax return. If the family took the standard deduction, then its taxable income would have been $22,200 ($35,000 minus the standard deduction of $5,000 and four personal exemptions at $1,950 apiece), and its tax liability would have been $3,330. As a result, the household's average tax rate was 9.5% ($3,330 divided by $35,000 income) in 1988. Next consider what would happen to the household's tax burden in 2017 if the family's income had kept up with inflation but the 1988 tax structure had remained in place, with no indexation for inflation. The family's AGI would have been $71,766: $35,000 x 2.05 (the rise in the general price level as measured by the Consumer Price Index for all Urban Consumers (CPI-U) from 1988 to 2017). Its taxable income would have been $58,966; its tax liability would have totaled $12,643; and its average tax rate would have reached 17.6%. So in the absence of the indexation of the key income tax elements when the family's AGI rose in step with the rate of consumer inflation, keeping the buying power of its income constant, the family's income tax burden increased by 85% from 1988 to 2017. This difference exemplifies what is known as "bracket creep," an effect that is accelerated during periods of high inflation. Under an indexed individual income tax, however, the household would have experienced no change in their tax burden. With an inflation adjustment equal to the rise in the CPI-U, the value of the standard deduction for a joint return would have increased from $5,000 in 1988 to $10,252 in 2017, and the personal exemption for each family member would have increased from $1,950 to $3,998. Under these circumstances, the family's 2017 taxable income would have been $45,522 ($71,766 in income less the inflation-adjusted standard deduction and four personal exemptions). Tax brackets would have adjusted as well. Based on this taxable income and the adjusted brackets, their income tax liability would have been $6,828, yielding an average tax rate of 9.5%, the same as in 1988. While the nominal household's amount of income and tax owed rose, the value of both in 1988 dollars stayed approximately the same. Congress added indexation to the individual income tax as a part of the package of statutory tax rate reductions included in the Economic Recovery Tax Act of 1981. The U.S. rate of inflation was exceptionally high at the time, and this condition influenced congressional deliberations on the benefits of tax indexation. As the Joint Committee on Taxation noted in its explanation of the act: The Congress believed that "automatic" tax increases resulting from the effects of inflation were unfair to taxpayers, since their tax burden as a percentage of income could increase during intervals between tax reduction legislation, with an adverse effect on incentives to work and invest. In addition, the Federal Government was provided with an automatic increase in its aggregate revenue, which in turn created pressure for further spending. Since 1981, the list of indexed elements has gradually expanded and now includes more than three dozen tax items. TRA86 extended indexation to some newly created tax provisions, including the standard deductions for the elderly and the blind and the EITC. EGTRRA indexed the phaseout amounts for the EITC, starting in 2008. Table 2 lists the major indexed tax items and notes the first year of the adjustment. Indexing may compound the complexity of the individual income tax, but, given its benefits to taxpayers over time, this effect is arguably a minor matter. The year-to-year changes in dollar amounts are usually small, so taxpayers seldom, if ever, face unexpected changes that might materially affect them. On the revenue side, of course, indexing results in lower government receipts. But some key elements of the tax remain unadjusted for inflation. One such element is the child tax credit. Under current law, the amount of the credit itself and the phaseout thresholds for higher-income taxpayers are not adjusted for inflation. But the earned income threshold used in calculating the credit's refundable amount has been adjusted for inflation since 2001. Consequently, under current law, inflation erodes the value of the credit and reduces the number of eligible taxpayers over time. Another element not indexed for inflation is the threshold amounts for determining who pays the 3.8% tax on net investment income that was added in 2013. Most elements are indexed using the technical calculation described below. In some instances, the calculation methodology differs somewhat. Examples include the EITC or transportation benefits. The variations are insignificant, as long as they do not lead to systematic deviations from the actual rate of inflation. The adjustment for tax years before 2019 was based on the percentage by which the average Consumer Price Index for All Urban Consumers (CPI-U) in the 12 months ending on August 31 of the preceding year exceeded the average CPI-U during a 12-month base period. Not all indexed tax elements used the same base period, as shown in Table 2 . With the exception of the EITC, inflation adjustments were rounded down to the nearest multiple of $50. Although rounding down affected the accuracy of any given year's inflation adjustment, the effect was not cumulative since each year's adjustment reflected the total inflation that occurred between the adjustment year and the base period. For example, the adjustment factor for the personal exemption in 2017 was calculated as follows. By law, the base period for this factor was September 1987 through August 1988, when the average CPI-U was 116.6. The average CPI-U for September 2015 through August 2016, on which the 2017 value is based, was 238.6. Thus, the inflation adjustment factor in 2017 was 2.05 (238.6/116.6). This factor was then applied to $2,000, the value of the exemption in 1989, resulting in a personal exemption of $4,080 for the 2017 tax year. Rounding this number down to the nearest multiple of $50 produced the final value of the exemption in 2017: $4,050. For tax years beginning after December 31, 2018, a different consumer price index will be used to adjust the values of income tax elements subject to indexation. Under a provision of P.L. 115-97 , the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) replaces the CPI-U for this purpose. Both indices were designed by the Bureau of Labor Statistics (BLS) to measure price changes faced by the average urban consumer. Each of them tracks the prices of about 80,000 goods and services each month in cities throughout the United States. The BLS bases the indices on a fixed basket of goods and services obtained from a survey of the spending patterns of 7,000 American families. The survey determines which goods and services go into the basket and how much weight should be assigned to each item in calculating the overall change in prices. The market basket for the CPI-U is revised every two years. Many analysts have argued that the CPI-U overstates rises in the cost of living because it does not fully account for the changes consumers make in their buying patterns when the price of one item in the market basket goes up or the price of another goes down. When this tendency to substitute lower-priced items for other items whose prices have increased is ignored, the impact on consumers of inflation is overstated. The chained CPI-U is better at capturing changes in consumer spending patterns tied to price increases or decreases. This is because it compares details about what a consumer buys in the period before a price change with details about what he/she buys in the period after the change. In essence, the BLS calculates one measure of inflation for the first-period basket and a second measure of inflation for the second-period basket and then takes the average. The basket after the price change may contain different amounts of some items, as consumers respond to increases or decreases in the prices of other items in the same categories. For instance, the second-period basket may include more chicken than the first-period basket did when the price of beef increases while the price of chicken remains unchanged. This substitution softens the impact of the price rise for beef on the overall measure of inflation. The chained CPI-U does this every month, creating an index that links these changes from month to month. As a result, the index reflects shifts in consumer buying patterns between months and between basket items. It also leads to lower estimates of the rate of increase in the cost of living over time, since the chained CPI-U is built around the tendency of consumers in general to purchase lower-priced items that can be substituted for items whose prices have risen. From 2000 to 2012, the annual average for the chained CPI-U rose by 29.4%. In the same period, the CPI-U's annual average increased by 33.3%. Many analysts have noted that using the chained CPI-U to adjust the amount of individual income tax elements for inflation has one significant drawback: the index is revised several times, while the CPI-U is never revised. A final reading for the chained CPI-U is released between 10 and 16 months after its initial release. Consequently, starting in 2018, tax elements that are adjusted for inflation are indexed to a preliminary estimate that could be significantly revised. Switching to the chained CPI-U to adjust key tax elements for inflation is likely to result in more bracket creep than would occur if the elements were still adjusted for inflation using the CPI-U. Since the chained CPI-U increases more slowly than the CPI-U, tax bracket thresholds are likely to rise by smaller amounts from one year to the next. More individual taxpayers will be pushed into higher tax brackets than they would be if the CPI-U were still used for inflation adjustment. One significant result is an increase in federal tax revenue over time. The Joint Committee on Taxation has estimated that the revenue gain from switching to the chained CPI-U will total $134 billion from FY2018 to FY2027. Since the onset of the Great Recession in late 2007, the annual U.S. inflation rate has fluctuated between -0.4% and 3.2%, as measured by the CPI-U. Negative inflation, or deflation, occurred in 2009 relative to 2008. Deflation denotes a decrease in the general price level. As a result, the inflation adjustments in 2010 were very small or nonexistent. Several other federal programs experienced similar situations, even though they do not use the same indexing methodology. For example, there was no cost-of-living adjustment for Social Security benefits in 2010. If the United States were to experience a period of sustained deflation, the income tax elements could decline in constant dollars. By law, however, the elements cannot fall below their base-year values. Since their current values are much higher than their base values, which were established years ago in some cases, and the near-term outlook for inflation is projecting rates below 3%, this limitation is unlikely to come into play anytime soon for most indexed elements. The following tables present the personal exemption amounts, standard deductions, and statutory marginal tax rates schedules for each tax year from 1988 through 2019.
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Statutory individual income tax rates are the tax rates that apply by law to various amounts of taxable income. Statutory rates form the basis of marginal effective and average effective tax rates, which most economists believe have a greater impact on the economic behavior of companies and individuals than do statutory rates. Marginal effective rates capture the net effect of special tax provisions on statutory rates. They differ from average effective rates, which measure someone's overall income tax burden. Current statutory and effective individual tax rates are the result of the Tax Reform Act of 1986 (TRA86; P.L. 99-514) and several tax laws that have been enacted since then. Of particular importance among the latter are the Omnibus Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508), the Omnibus Budget Reconciliation Act of 1993 (OBRA93; P.L. 103-66), the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16), the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUC; P.L. 111-312), the American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240), and the tax rate changes contained in the 2017 tax revision (P.L. 115-97). TRA86 altered the income tax rate structure. EGTRRA established what are referred to as the Bush-era tax cuts for individuals. TRUC extended those cuts for another two years, through 2012. ATRA permanently extended the Bush-era tax rates for taxpayers with taxable incomes below $400,000 for single filers and $450,000 for joint filers but reinstated the 39.6% top rate established by OBRA93 for taxpayers with taxable incomes equal to or above those amounts. And P.L. 115-97 lowered individual tax rates for all income groups except those subject to the 10% and 35% brackets under previous law. Ordinary income is taxed at seven statutory individual income tax rates, from 2018 to 2026: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. (Starting in 2026, these rates will revert to their levels in 2017.) Income from long-term capital gains and dividends is taxed at 0% for single filers with capital gains below $39,375 (below $78,750 for joint filers), 15% for single filers with capital gains between $39,375 and $434,550 (between $78,750 and $488,850 for joint filers), and 20% for single filers with capital gains above $434,550 (above $488,850 for joint filers). Since 2013, a 3.8% tax has been imposed on the lesser of net investment income received by individuals, estates, or trusts, or the amount of their modified adjusted gross incomes above $250,000 for joint filers and $125,000 for single filers. In addition, the individual alternative minimum tax (AMT), which functions like a separate income tax in that its rate structure is narrower and tax base broader than those of the regular income tax, applies to income above exemption amounts in 2019 of $111,700 for joint filers and $71,700 for single filers; the AMT taxes income at two rates: 26% and 28%. Tax rates and the income brackets to which they apply are not the only elements of the individual income tax that determine the tax liabilities of taxpayers. Personal exemptions, exclusions, deductions, credits, and certain other elements have an effect as well. Some of these elements are indexed for inflation. Congress added annual indexation to the individual income tax in 1981, using the Consumer Price Index for All Urban Consumers. Such a mechanism helps prevent tax increases and unintended shifts in the distribution of the tax burden that are driven by inflation alone. The indexed elements are tax rate brackets, personal exemptions and their phaseout threshold, standard deductions, the itemized deduction limitation threshold, and the exemption amounts for the AMT. Starting in 2018, these items are indexed for inflation with the Chained Consumer Price Index for All Urban Consumers. This report summarizes the tax brackets and other key elements of the individual income tax that help determine taxpayers' marginal and average effective tax rates going back to 1988. It will be updated to reflect indexation adjustments and changes in the taxation of individual income.
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T he Senior Community Service Employment Program (SCSEP) authorizes the Department of Labor (DOL) to make grants to support part-time community service employment opportunities for eligible individuals who are age 55 or over and have limited employment prospects. Participation in the program is temporary, with the goal of transitioning participants to unsubsidized employment. In FY2019, appropriations for the SCSEP program were $400 million and supported approximately 41,000 positions. SCSEP appropriations accounted for approximately 20% of total Older Americans Act funding in FY2019. SCSEP is authorized by Title V of the Older Americans Act of 1965, as amended (OAA; 42 U.S.C. 3056 et seq.) Since enactment of the OAA, Congress has reauthorized and amended the act numerous times. Most recently, the Older Americans Act Reauthorization Act of 2016 ( P.L. 114-144 ) authorized appropriations for OAA programs for FY2017 through FY2019, and made other changes to the act. Prior to the 2016 OAA reauthorization, the OAA Amendments of 2006 ( P.L. 109-365 ) reauthorized all programs under the act through FY2011. Although the authorizations of appropriations under the OAA expired at the end of FY2011, Congress continued to appropriate funding for OAA-authorized activities through FY2016. Grants under the program are administered by the Employment and Training Administration (ETA) at the Department of Labor (DOL). (References to the Secretary in this report refer to the Secretary of Labor, unless otherwise specified.) SCSEP is the only OAA program administered by DOL. Other OAA programs are administered by the Administration for Community Living (ACL) at the Department of Health and Human Services (HHS). SCSEP is supported by discretionary appropriations under the DOL-HHS appropriations bill. SCSEP programs operate on DOL's program year (PY), which operates nine months behind the fiscal year. Activities in a given program year are supported by funding from the corresponding fiscal year. For example, PY2017 ran from July 1, 2017, through June 30, 2018, and was supported by FY2017 appropriations. Programs administered under Title V of the OAA may also be referred to as the Community Service Employment for Older Americans (CSEOA) programs. DOL uses the CSEOA and SCSEP terminology interchangeably. From its total appropriation, the OAA establishes three reservations: (1) up to 1.5% for DOL-selected pilots, demonstration, and evaluation projects; (2) a fixed percentage of 0.75% for the territories of Guam, American Samoa, the U.S. Virgin Islands, and the Northern Mariana Islands; and (3) a portion determined by the Secretary for activities that support eligible individuals who are American Indian and Pacific Islander/Asian American. The remaining funds are allocated to formula grants. Title V supports formula grants to both national organizations ("national grantees") and state agencies ("state grantees"). National grantees are typically nonprofit organizations that operate in more than one state. State grantees are state government agencies. State grantee agencies are typically housed in a state's workforce unit or aging unit. In PY2018, approximately 78% of funds for formula grants ($298 million) were distributed among national grantees. There are about 15-20 national grantee organizations, including AARP and the National Council on Aging. About 22% of PY2018 funds for grants ($84 million) were allocated to state agencies. Both national grantees and state grantees subgrant funds to partner organizations that work with host agencies that provide the actual employment (see Figure 1 ). The OAA specifies that in years where funds available for formula grants exceed the "funds necessary to maintain the fiscal year 2000 level of activities supported by grantees," the excess funds are allotted using a series of formulas that are directly correlated to the number of persons age 55 and over in the state and inversely correlated to the per capita income of the state. Thus, the formulas favor states with larger populations of persons age 55 or over and states with lower per capita incomes. The law contains hold harmless provisions that specify that in years where funds are less than their FY2000 level, funds are awarded proportionately "to maintain their fiscal year 2000 level of activities." The last year in which funds were allocated using the formula was PY2010. Since then, funding for grants has consistently been below the FY2000 level (see Table 1 ). As such, specific grant levels have varied but each state's relative share of grants funds has been proportionate to its FY2000 levels and a consistent share of the funding has been allocated to national grantees in each state as well as each state agency. The OAA defines a state's allotment (and corresponding hold harmless share of funding) as the sum of the allotment for national grants in the state and the grant to the state agency. The proportion of each state's total funding that comes from grants to national organizations versus grants to the state agency varies somewhat. As a condition of receiving SCSEP funds, each state's governor must develop and submit a state plan to DOL. The plan can be an independent document or part of a combined plan with the state's activities under the Workforce Innovation and Opportunity Act (WIOA), the primary federal workforce development legislation authorizing workforce services for the broader population. Whether the SCSEP plan is independent or part of a combined plan, it must provide information on individuals in the state who will be eligible for the program as well as the localities most in need of services. The plan must be developed in consultation with the state WIOA agency, national grantees operating in the state, and other stakeholders. The state plan must describe how the activities under SCSEP will be coordinated with activities under WIOA and how the state will minimize duplication between Title V and WIOA. Grantees that receive funds directly from DOL typically allocate funds to subgrantees and/or host agencies that provide the actual work site placements and part-time community service employment. Host agencies are responsible for recruiting program participants. To be eligible for the program, a prospective participant must be age 55 or older, unemployed, and a member of a family with income of not more than 125% of the poverty level ($15,613 for a family size of one in 2019). Statute specifies that priority will be given to prospective participants who demonstrate additional barriers to employment. Specifically, an individual may receive priority if the individual is 65 years of age or older; has a disability; has limited English proficiency or low literacy skills; resides in a rural area; is a veteran; has low employment prospects; has failed to find employment after utilizing services provided under Title I of the Workforce Innovation and Opportunity Act; or is homeless or at risk for homelessness. As is the case with other DOL programs, eligible veterans receive priority of service in the SCSEP program. The OAA allows host agencies to employ program participants part-time in a variety of community service activities, including (but not limited to) social, health, welfare, and educational services as well as conservation and community beautification activities. Some participants may be employed at senior centers and other facets of the Aging Network established by the OAA, such as an Area Agency on Aging. Program participants are paid by the host agency. Participants must earn the highest of (1) the federal minimum wage, (2) the prevailing minimum wage in the state or locality in which the participant works, or (3) the prevailing rate for individuals employed in similar occupations by the same employer. Title V of the OAA does not establish a definition for "part-time" and federal policy does not limit the number of hours participants can work. In establishing the cost per authorized position, however, Title V establishes a formula that includes the federal minimum wage "multiplied by the number of hours equal to the product of 21 hours and 52 weeks." As part of program orientation, the subgrantee or host agency is responsible for assessing the participant, including the participant's skills, interests, needs, and potential for unsubsidized employment. Using information from this assessment, the grantee works with the participant to develop an individual employment plan (IEP) that includes a post-service objective (including employment, if appropriate) and the timeline for achievement of that objective. In addition to employment, grantee organizations may also provide training and supportive services. These services can include (but are not limited to) costs of transportation, health and medical services, special job-related or personal counseling, and work-related incidentals such as eyeglasses or work shoes. Individual participants are typically limited to an aggregate maximum of 48 months of participation in the program. Grantees are required to manage programs such that the average duration of participation for all participants does not exceed 27 months. This cap may be increased to an average of 36 months in certain circumstances such as high unemployment in the service area. SCSEP participants are not federal employees. Regulations specify that grantees are responsible for determining whether or not a participant qualifies as an employee of the grantee, subgrantee, or host agency under applicable laws. Grantees must match SCSEP grants such that federal funds account for no more than 90% of the project cost. DOL may waive match requirements in cases of emergency or disaster projects or projects in economically depressed areas. At least 75% of federal grants must be used to pay wages and legally required benefits for program participants. In limited cases, this requirement may be reduced to 65% if the program allocates a certain portion of funds to training and supportive services. In most circumstances, grantees may not use more than 13.5% of their federal grant for administrative expenses. Federal law establishes six core indicators for CSEOA grantees. Three of the six CSEOA indicators focus on unsubsidized employment and earnings after participation in the program. The performance indicators are 1. hours (in the aggregate) of community service employment; 2. the percentage of project participants who are in unsubsidized employment during the second quarter after exit from the project; 3. the percentage of project participants who are in unsubsidized employment during the fourth quarter after exit from the project; 4. the median earnings of project participants who are in unsubsidized employment during the second quarter after exit from the project; 5. indicators of effectiveness in serving employers, host agencies, and project participants; and 6. the number of eligible individuals served, including the number of participating individuals with demonstrated barriers to employment. Indicators 2-4 are largely based on the performance accountability indicators for the general workforce programs under WIOA. Indicators 1, 5, and 6 do not have direct analogues in the WIOA performance accountability system. The current performance accountability measures were established by the Older Americans Act Reauthorization Act of 2016 ( P.L. 114-144 ). Grantees started reporting performance under these metrics beginning in PY2018, starting July 1, 2018. Grantees negotiate expected performance levels with DOL. Negotiating performance levels at the grantee level allows the expected performance levels to reflect the types of participants a particular grantee serves or the environment in which it operates (e.g., the grantee serves a disproportionate number of high-need participants or operates in an area with a high rate of unemployment.) Performance accountability is assessed at the level of the grantee (i.e., the entity that receives funding directly from DOL). Grantees are responsible for oversight of subgrantees and host agencies. Regulations establish that performance is measured as a percentage of the negotiated level of performance. For example, if a grantee negotiates a performance rate of 50% of participants in unsubsidized employment in the second quarter after exit and 48% of the program participants subsequently meet that standard, the grantee has reached 96% of its agreed-upon level of performance. Performance in the range of 80% to 100% constitutes meeting the core level of performance. If a national or state grantee fails to meets its negotiated level of performance, the grantee must receive technical assistance from DOL and submit a corrective action plan. If a national grantee fails to meet expected levels of performance for four consecutive years, the grantee may not compete in the subsequent grant competition. If a state grantee fails to meet the expected levels of performance for three consecutive program years, the state must conduct a competition to award its formula funds to a new grantee. DOL makes available several reports with SCSEP participation data. Data are reported by program year. Reports currently made available by DOL include the following: Aggregate and Individual Performance Reports . These reports include the performance of each national grantee and state agency relative to the negotiated levels of performance. Nationwide Quarterly Progress . These reports include total participation as well as data on demographics and participants' demonstrated barriers to employment. Service to Minority Individuals . These reports include information on the participation and outcomes of minorities for each grantee. The reports are required under Section 515 of the OAA.
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The Senior Community Service Employment Program (SCSEP) authorizes the Department of Labor (DOL) to make grants to support part-time community service employment opportunities for eligible individuals age 55 or over. In FY2019, appropriations for SCSEP programs were $400 million and supported approximately 41,000 positions. DOL may also refer to the SCSEP program as Community Service Employment for Older Americans (CSEOA) SCSEP is authorized by Title V of the Older Americans Act (OAA). The Older Americans Act Reauthorization Act of 2016 (P.L. 114-144) authorized appropriations for OAA programs for FY2017 through FY2019. In FY2019, SCSEP appropriations accounted for about 20% of the funding under the OAA. The bulk of SCSEP appropriations support two primary grant streams: one to national nonprofit organizations and one to state agencies. In the most recent program year, approximately 78% of formula grant funds were allocated to national grantees and about 22% were allocated to state grantees. Both the national organizations and state grantees subgrant funds to host agencies that provide the actual community service employment opportunities to participants. Host agencies are responsible for recruiting eligible participants. To be eligible for the program, prospective participants must be at least age 55, low-income, and unemployed. Federal law requires host agencies to give preference to prospective participants who demonstrate additional barriers to employment such as having a disability or being at risk of homelessness. Program participants work part-time in community service jobs, including employment at schools, libraries, social service organizations, or senior-serving organizations. Program participants earn the higher of minimum wage or the typical wage for the job in which they are employed. An individual may typically participate in the program for a cumulative total of no more than 48 months. During orientation, participants receive an assessment of their skills, interests, capabilities, and needs. This assessment informs the development of an individual employment plan (IEP). A participant's IEP is updated throughout their participation in the program. Grantees are subject to a performance accountability system. Performance metrics generally relate to participants' unsubsidized employment and earnings after exiting the program. In addition to outcome-based metrics, grantees are also assessed on participants' total number of hours of service and whether the grantee served participants with barriers to employment. Grantees that do not meet negotiated levels of performance may become ineligible for subsequent grants.
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The United States restricts the export of defense articles; dual-use goods and technology; certain nuclear materials and technology; and items that would assist in the development of nuclear, chemical, and biological weapons or the missile technology used to deliver them. A defense item is defined by regulation as one that "[m]eets the criteria of a defense article or defense service on the U.S. Munitions List" or "[p]rovides the equivalent performance capabilities of a defense article" on that list. Dual-use goods are commodities, software, or technologies that have both civilian and military applications. The United States also controls certain exports in adherence to several multilateral nonproliferation control regimes. In addition, U.S. export controls are used to restrict exports to certain countries on which the United States imposes economic sanctions, such as Cuba, Iran, and Syria. Through the Export Controls Act of 2018 (ECA), the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), and other authorities, Congress has delegated, in the context of broad statutory power, to the executive branch its express constitutional authority to regulate foreign commerce by controlling exports. Various aspects of the U.S. export control system have long been criticized by exporters, nonproliferation advocates, allies, and other stakeholders as being too restrictive, insufficiently restrictive, cumbersome, obsolete, inefficient, or any combination of these descriptions. Some contend that such controls overly restrict U.S. exports and make firms less competitive. Others argue that U.S. defense and foreign policy considerations should trump commercial concerns. In January 2007, the Government Accountability Office (GAO) designated government programs designed to protect critical technologies, including the U.S. export control system, as a "high-risk" area warranting a "strategic reexamination of existing programs to identify needed changes." GAO's report named poor coordination among export control agencies, disagreements over commodity jurisdiction between the Departments of State and Commerce, unnecessary delays and inefficiencies in the license application process, and a lack of systematic evaluative mechanisms to determine the effectiveness of export controls. A 2017 GAO report cited "progress" with regard to improving the export control system, but added that government-wide challenges remain, including the need to adopt a more consistent leadership approach, improve coordination among programs, address weaknesses in individual programs, and implement export control reform . The 2019 version of the GAO report noted improvements in the export control system, but still cited the need for further action. On August 13, 2009, President Barack Obama announced the launch of a comprehensive review of the U.S. export control system; then-Secretary of Defense Robert M. Gates announced key elements of the Administration's agenda for reform in an April 2010 speech, with additional elaborations in subsequent months. Former Secretary Gates proposed a four-pronged approach that would establish a single export control licensing agency for both dual-use, munitions and exports licensed to embargoed destinations; a unified control list; a single enforcement coordination agency; and a single integrated information technology system, which would include a single database of sanctioned and denied parties. This section describes the characteristics of the dual-use, munitions, and nuclear controls. The information contained in this section also appears in chart form in Appendix A . The Export Controls Act of 2018 (ECA; P.L. 115-232 , Subtitle B, Part I), which became law on August 13, 2018, provides broad, detailed legislative authority for the President to implement dual-use export controls. The law repeals the Export Administration Act EAA of 1979 (EAA; P.L. 96-72 ), which was the underlying statutory authority for dual-use export controls until it expired in 2001. After the EAA's expiration, the export control system created pursuant to that law was continued by a presidential declaration of a national emergency and the invocation of the International Emergency Economic Powers Act (IEEPA; P.L. 95-223 ). The ECA directs the President to implement the EAA nonproliferation sanctions provisions pursuant to IEEPA. The ECA, which has no expiration date, requires the President to control "the export, reexport, and in-country transfer of items subject to the jurisdiction of the United States, whether by United States persons or by foreign persons," as well as the activities of United States persons, wherever located, relating to specific (A) nuclear explosive devices; (B) missiles; (C) chemical or biological weapons; (D) whole plants for chemical weapons precursors; (E) foreign maritime nuclear projects; and (F) foreign military intelligence services. The ECA requires the Secretary of Commerce to "establish and maintain a list" of controlled items and "foreign persons and end-uses that are determined to be a threat to the national security and foreign policy of the United States"; require export licenses; "prohibit unauthorized exports, reexports, and in-country transfers of controlled items"; and "monitor shipments and other means of transfer." The Bureau of Industry and Security (BIS) in the Department of Commerce administers the export licensing and enforcement functions of the dual-use export control system. The Ronald Reagan Administration detached those functions from the International Trade Administration (ITA) in 1985 in order to separate them from the export promotion functions of that agency within the Department of Commerce. BIS also enforces U.S. antiboycott regulations concerning the Arab League boycott against Israel. The ECA is implemented by the Export Administration Regulations (EAR; 15 C.F.R. 730 et seq). As noted above, the EAR were continued under IEEPA's authority when the EAA was expired. The EAR set forth licensing policy for goods and destinations, the applications process used by exporters, and the CCL, which is the list of specific commodities, technologies, and software controlled by the EAR. The CCL has 10 categories nuclear materials, facilities, and equipment; materials, organisms, microorganisms, and toxins; materials processing; electronics; computers; telecommunications and information security; lasers and sensors; navigation and avionics; marine; and propulsion systems, space vehicles, and related equipment. Each of these categories is further divided into functional groups: equipment, assemblies, and components; test, inspection, and production equipment; materials; software; and technology. Each controlled item has an export control classification number (ECCN) based on the above categories and functional groups. Each ECCN is accompanied by a description of the item and the reason for control. In addition to discrete items on the CCL, nearly all U.S.-origin items are "subject to the EAR"; such items may be restricted to a destination based on the end-use or end-user of the product. For example, a commodity that is not on the CCL may be denied if the good is destined for a military end-use or an entity known to be engaged in weapons proliferation. The EAR set out the licensing policy for dual-use and certain military items; the regulations control items for reasons of national security, foreign policy, or short supply. National security controls are based on a common multilateral control list; however, the designation of countries to which those controls are applied is based on U.S. policy. Foreign policy controls may be unilateral or multilateral in nature. The EAR unilaterally control items for antiterrorism, regional stability, or crime control purposes. Antiterrorism controls proscribe nearly all exports to North Korea and the four countries designated as state sponsors of terrorism by the Secretary of State—Cuba, Iran, Sudan, and Syria. These regulations also impose foreign policy controls on encryption items and on hot section technology, which is "for the development, production, or overhaul of commercial aircraft engines, components, and systems." The EAR include "enhanced controls" on hot section technology and require a license "for exports and reexports to all destinations, except Canada." The U.S. government reviews license applications for such technology "on a case-by-case basis to determine whether the proposed export or reexport is consistent with U.S. national security and foreign policy interests." Foreign policy-based controls are also based on adherence to multilateral nonproliferation control regimes, such as the Nuclear Suppliers' Group, the Australia Group (chemical and biological precursors), and the Missile Technology Control Regime (MTCR). The EAR set out timelines for the consideration of dual-use licenses and the process for resolving interagency disputes. Within nine days of receipt, Commerce must refer the license to other agencies (State, Defense, and Energy, as appropriate), grant the license, deny it, seek additional information, or return it to the applicant. If Commerce refers the license to other agencies, the agency to which it is referred must recommend that the application be approved or denied within 30 days. The EAR provide a dispute resolution process for a dissenting agency to appeal an adverse decision. The entire licensing process, to include the dispute resolution process, is designed to be completed within 90 days. This process is depicted graphically in Appendix B . BIS noted in its Fiscal Year 2017 Budget Submission that its increased responsibility for exports as a result of export control reform has increased the burden on the bureau's licensing and enforcement functions. For criminal penalties, the ECA sanctions individuals up to $1 million or up to 20 years imprisonment, or both, per violation. This law also provides for civil penalties; for each violation, individuals may be fined up $300,000 "or an amount that is twice the value of the transaction that is the basis of the violation with respect to which the penalty is imposed, whichever is greater." Such penalties may also include revocation of export licenses and prohibitions on the offender's ability to export. Enforcement is carried out by the Office of Export Enforcement (OEE) at BIS. OEE's headquarters is in Washington, DC, and the office has 10 offices outside of Washington, DC. U.S. field offices, as well as export control officers in seven foreign countries. OEE is authorized to carry out investigations domestically and works with DHS to conduct investigations overseas. The office, along with in-country U.S. embassy officials overseas, also conducts prelicense checks and postshipment verifications. The AECA of 1976 (P.L. 90-629) provides the President with the statutory authority to control the export of defense articles and services. The AECA also contains the statutory authority for the Foreign Military Sales (FMS) program, under which the U.S. government sells U.S. defense equipment, services, and training on a government-to-government basis. The law also specifies criteria for Direct Commercial Sales (DCS), whereby eligible foreign governments and international organizations purchase some defense articles and services directly from U.S. firms. The AECA sets out foreign and national policy objectives for international defense cooperation and military export controls. Section 3(a) of the AECA specifies the general criteria for countries or international organizations to be eligible to receive U.S. defense articles and defense services provided under the act. The law also sets express conditions on the uses to which these defense articles may be put. Section 4 of the AECA states that U.S. defense articles and defense services shall be sold to friendly countries "solely" for use in "internal security"; for use in "legitimate self-defense"; to enable the recipient to participate in "regional or collective arrangements or measures consistent with the Charter of the United Nations"; to enable the recipient to participate in "collective measures requested by the United Nations for the purpose of maintaining or restoring international peace and security"; and to enable the foreign military forces "in less developed countries to construct public works and to engage in other activities helpful to the economic and social development of such friendly countries." A prominent feature of the AECA is the requirement for congressional consideration of certain foreign defense sales proposed by the President. This procedure includes consideration of proposals to sell major defense equipment and services, or to retransfer such military items to other countries. The procedure is triggered by a formal report to Congress under Section 36 of the AECA. In general, the executive branch, after complying with the terms of the applicable section of U.S. law (usually those contained in the AECA), is free to proceed with the sale unless Congress passes legislation prohibiting or modifying the proposed sale. Under Section 36(b) of the ACEA, Congress must be formally notified 30 calendar days before the Administration can take the final steps to conclude a government-to-government foreign military sale or issue an export license for commercial sales of major defense equipment valued at $14 million or more, defense articles or services valued at $50 million or more, or design and construction services valued at $200 million or more. In the case of such sales to NATO member states Japan, Australia, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with the sale. However, the prior notice thresholds are higher for Japan, Australia, and New Zealand. These higher thresholds are $25 million for the sale, enhancement, or upgrading of major defense equipment; $100 million for the sale, enhancement, or upgrading of defense articles and defense services; and $300 million for the sale, enhancement, or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of nations. The International Traffic in Arms Regulations (ITAR) set out licensing policy for exports (and temporary imports) of U.S. Munitions List (USML) items. A license is required for the export of nearly all items on the USML. There is a limited license exemption for USML items for Canada because the United States considers Canada to be part of the U.S. defense industrial base. In addition, the United States has treaties with the United Kingdom and Australia to exempt certain defense articles from licensing obligations to approved end-users in those countries; the Senate gave its advice and consent to ratification of these treaties in 2010. Unlike some Commerce Department dual-use controls, licensing requirements are based on the nature of the article and not the end-use or end-user of the item. The United States implements a range of prohibitions on munitions exports to countries unilaterally or based on adherence to United Nations (U.N.) arms embargoes. In addition, any firm engaged in manufacturing, exporting, or brokering any item on the USML must register with the Directorate of Defense Trade Controls (DDTC) at the State Department and pay a yearly fee whether or not the firm seeks to export during the year. Exports of defense goods and services are administered by DDTC, which is a component of the Department of State's Bureau of Political-Military Affairs and consists of four offices: Management, Policy, Licensing, and Compliance. DDTC also processes commodity jurisdiction requests, which determine the regulatory regime to which an item is subject. Critics of the defense trade system had previously decried the delays and backlogs in processing license applications at DDTC. A National Security Presidential Directive (NSPD-56), signed by President Bush on January 22, 2008, directed that the review and adjudication of defense trade licenses submitted under ITAR are to be completed within 60 days, except where six "national security exceptions apply." Previously, except for the congressional notification procedures discussed above, DDTC had no defined timeline for the application process. The AECA provides for criminal penalties of up to $1 million or 20 years of imprisonment, or both, for each violation. The AECA also authorizes civil penalties of up to $500,000 and debarment from future exports. Civil penalties increase annually pursuant to Section 701 of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 ( P.L. 114-74 ). DDTC has an enforcement staff and works with the Defense Security Service and the Customs and Border Protection and Immigration and Customs Enforcement (ICE) units at the Department of Homeland Security (DHS). In addition to adjudicating civil cases, DDTC assists DHS and the Department of Justice (DOJ) in pursuing criminal investigations and prosecutions. DDTC also coordinates the Blue Lantern end-use monitoring program, in which in-country U.S. embassy officials conduct prelicense checks and postshipment verifications of items transferred via DCS. The Department of Defense's Defense Security Cooperation Agency manages the department's Golden Sentry program, which performs an analogous function for FMS transfers. A subset of the above-mentioned dual-use and military controls are controls on nuclear items and technology. Controls on nuclear goods and technology are derived from the Atomic Energy Act of 1954 (P.L. 83-703), as amended, as well as from the ECA and the AECA. Controls on nuclear exports are divided among several agencies, based on the product or service being exported. The Nuclear Regulatory Commission (NRC) regulates exports of nuclear facilities and material. The NRC licensing policy and control list are located at 10 C.F.R. 110. BIS licenses "outside the core" civilian power plant equipment and maintains the Nuclear Referral List as part of the CCL. The Department of Energy authorizes the export of nuclear technology. DDTC exercises licensing authority over nuclear items in defense articles under the ITAR. A Department of Defense (DOD) Field Activity under the Under Secretary of Defense for Policy, DTSA coordinates the technical and national security review of direct commercial sales export licenses and commodity jurisdiction requests received from the Departments of Commerce and State. It develops the recommendation of DOD on these referred export licenses or commodity jurisdictions based on input provided by the various DOD departments and agencies and represents DOD in the interagency dispute resolution process. Not all licenses from DDTC or BIS are referred to DTSA; memorandums of understanding govern the types of licenses referred from each agency. DTSA coordinates the DOD position with regard to proposed changes to the ITAR and the EAR. It also represents DOD in the interagency process responsible for compliance with multinational export control regimes. Enforcement of the U.S. export control system is undertaken by the agencies responsible for export licensing, the Department of Homeland Security (DHS), the Department of Justice (DOJ) (National Security Division and the Federal Bureau of Investigation [FBI]), and the Defense Criminal Investigative Service (DCIS). Their activities can be summarized as follows: Offi ce of Export Enforcement (OEE) of the Bureau of Industry and Security (BIS) , Department of Commerce . OEE investigates criminal and administrative violations of the dual-use export control regime. OEE is authorized to conduct domestic investigations and works with ICE on investigations of export control violations overseas. OEE refers civil violations to the Office of Chief Counsel of BIS and criminal violations to DOJ. Office of Defense Trade Compliance (ODTC) in DDTC , Department of State . ODTC primarily administers civil enforcement actions, including charging letters and consent agreements, policies of denial, debarments, transaction exceptions, and reinstatements. ODTC provides agency support to investigations and criminal enforcement actions primarily conducted by ICE and the FBI. Office of Enforcement, Nuclear Regulatory Commission (NRC) . Investigates export control violations of nuclear facilities and material licensed by the NRC's Office of International Programs. The Office of Enforcement refers criminal violations to DOJ. ICE , Department of Homeland Security . As with its predecessor at the U.S. Customs Service, ICE has been the lead agency for criminal export enforcement activities. The Counter-Proliferation Investigations Unit investigates violations of dual-use and munitions export controls, exports to sanctioned countries, and violations of economic embargoes. ICE supplements and provides enforcement capacity to the export licensing agencies (BIS and DDTC) and undertakes investigations based on its own and other agency intelligence. In addition, export controls are enforced at the port of departure by DHS Customs and Border Protection. National Security Division of DOJ . The counterespionage section of this division undertakes criminal prosecutions resulting from investigations conducted by the licensing agencies, ICE, and the FBI. An October 2007 DOJ National Export Enforcement Initiative established task forces between the licensing and enforcement agencies and U.S. Attorney's Offices in 20 cities to coordinate export control prosecutions and has facilitated new counterproliferation coordination among law enforcement agencies, export licensing agencies, and the intelligence community. FBI . The FBI's Weapons of Mass Destruction Directorate receives and analyzes intelligence regarding proliferation networks, provides specialized training on counterproliferation for the National Export Enforcement Initiative, and cooperates with above-mentioned investigative partners and export licensing agencies. DCIS , Department of Defense . DCIS is the criminal investigative arm of the Inspector General of DOD. Among its varied activities, DCIS investigates the transfer of sensitive defense technologies to proscribed nations and criminal elements. In addition to U.S. controls, internationally there are four major multilateral control regimes: the Australia Group, the Missile Technology Control Regime (MTCR), the Nuclear Suppliers Group (NSG), and the Wassenaar Arrangement. The Commerce Department observed on December 9, 2010, that "[m]ost items on the CCL are controlled in accordance with the United States' commitments" to four major multilateral export control regimes. In addition to the controls described in the box below, all of these regimes have catch-all controls, which allow for the control of nonlisted items if they are to be used for a military or proliferation-related purpose. The Arms Export Control Act requires the Secretary of State to maintain, as part of the USML, "a list of all items on the MTCR Annex" that are not controlled as a dual-use item. The AECA requires the executive branch to control nuclear-related items, but the law does not explicitly require that these items be the same as those controlled by the NSG. On August 13, 2009, President Obama announced the launch of a comprehensive review of the U.S. export control system. Then-Defense Secretary Robert M. Gates announced key elements of the Administration's agenda for reform in a speech on April 20, 2010, with additional elaborations in subsequent months. Former Secretary Gates proposed a four-pronged approach that would create a single primary export control licensing agency for both dual-use and munitions exports; adopt a unified control list; establish a single enforcement coordination agency; and create a single integrated information technology system, which would include a single database of sanctioned and denied parties. The Administration's blueprint envisioned that these changes would be implemented in three phases, with the final phase requiring legislative action. Phase I would undertake preparatory work to harmonize the Commerce Control List (CCL) with the U.S. Munitions List (USML). This phase would also develop standardized licensing processes among the control agencies; it would also create an "Enforcement Fusion Center" to synchronize enforcement, along with a single electronic gateway to access the licensing system. Phase II would implement a harmonized licensing system with two identically-structured tiered control lists, potentially allowing for a reduction in the amount of licenses required by the system. This phase would include moving certain items from the USML to the CCL, for which congressional notification would be required; examining unilateral controls on certain items; and undertaking consultations with multilateral control regime partners to add or remove multilateral controls on certain items. Under the proposal, the new export control system would debut in Phase III, which would establish a single licensing agency; merge the two harmonized, tiered control lists, with mechanisms for review and updating; merge the two primary export control enforcement agencies, OEE and ICE; and operationalize a single IT system for licensing and enforcement. Changes in agency structure would require legislation. In a February 2011 speech, then-BIS Assistant Secretary Kevin Wolf elucidated seven principles driving the Administration's export control reform efforts Controls should focus on a small core set of key items that can pose a serious national security or intelligence threat to the United States and its interests; Controls should be fully coordinated with the multilateral export control regimes in order to be effective; Unilateral controls must address an existing legal or foreign policy objective; Control lists must clearly identify which items are controlled and be easily updated as technology emerges, matures, or becomes widely available; Licensing processes must be predictable and timely; Enforcement capabilities must be enhanced to address noncompliance and increase capacity to interdict unapproved transfers; and Controls must address counterterrorism policy and the need to export items that support homeland security priorities. In his speech introducing the Administration's reform efforts, then-Secretary Gates described the bureaucratic structure of the U.S. export control system as a "byzantine amalgam of authorities, roles, and missions scattered around different parts of the federal government." As noted above, licensing is divided among the Department of Commerce for dual-use and certain military items, the Department of State for munitions, the Department of the Treasury for certain sanctions, and the Nuclear Regulatory Commission and Department of Energy for certain nuclear materials and technologies. These entities operate under different statutory authorities and enforce different regulations. While there are mechanisms in place for license referrals and to address licensing disagreements, critics have long maintained that the multi-agency structure contributes to institutional disputes among the different agencies responsible for export control licensing. Having one licensing system would also end disputes about commodity jurisdiction over a given item. On June 30, 2010, then-National Security Adviser General Jim Jones announced that the Obama Administration intended to create an independent licensing agency with Cabinet members from existing control agencies serving as a board of directors. While that Administration did not provide specific details, this new agency is expected to take over the licensing functions of BIS, DDTC, and OFAC; this agency would likely house the civil and administrative enforcement functions of BIS and DDTC. The Obama Administration did not propose moving licensing procedures of the NRC for nuclear materials and of the Department of Energy for nuclear-related technology; an Obama Administration official attributed this decision to the relatively small volume of licensing undertaken by these agencies as well as by the small universe of exporters. General Jones argued that a unified licensing structure would end the situation in which no agency knew the total of export licenses granted or denied by the U.S. government. Under current referral processes, dual-use and certain military items licenses are referred by BIS to the Department of Defense, the Department of State (Economic Energy and Business Bureau [EEB], International Security and Non-Proliferation Bureau, and the regional bureaus), and the Department of Energy for review. However, BIS licenses are not referred to DDTC. DDTC refers munitions licenses to DOD and to the above-mentioned bureaus at State, and in some instances to Energy, but not to BIS. Some OFAC licenses are referred only to State's EEB. As a result, situations have arisen whereby licenses requested by the same exporter to the same destination have been approved by one license agency and denied by another. Brian Nilsson, then-Deputy Assistant Secretary of State for Defense Trade Controls, indicated during a February 2016 hearing that that the single information technology system in use by the Departments of Commerce, Energy, and State (see below) has begun to address the lack of agencies' visibility regarding license information. Yet, interagency policy differences may continue to exist because agencies would continue to refer licenses to ensure continued checks and balances. An issue concerning dual-nationals may provide an example of the effort that will be necessary to create a unified export control system. The White House announced on March 11, 2010, that it would take action to eliminate "obstacles to exporting to companies employing dual nationals." Specifically, the Obama Administration announced that it would "begin to harmonize" conflicting standards used by the Departments of Commerce and State to determine a foreign person's nationality—a step that these departments must take in order to make certain export control decisions. The Commerce Department, according to a 2010 Government Accountability Office (GAO) report, determines "nationality for release of technology to a foreign national" based on that person's "most recent citizenship or permanent residence." The State Department, however, considered not only a foreign national's current citizenship status, but also their country of birth if it differs from the person's country of citizenship or permanent residency. Even if a foreign entity is approved for a manufacturing license agreement or a technical assistance agreement with a U.S. firm, the State Department must approve the transfer of technical data, defense services, and defense articles to dual nationals and third-party nationals employed by the foreign entity. "If a person's country of birth is prohibited from receiving U.S. arms, as are China, Iran, and North Korea, State [collected] additional information to confirm that the individual has no significant ties to his or her country of birth," according to the GAO. However, the State Department stopped using "country of birth" as of 2015, although the department does "consider all current and former citizenships, in addition to current permanent residency." Both the State Department and private-sector experts argue that these requirements are contentious because, in addition to being administratively burdensome, they are a potential employment discrimination issue in other countries; in order to comply with the regulations, non-U.S. employers may need to limit employment opportunities in potential violation of their countries' employment laws. After publishing a proposed rule on August 11, 2010, the State Department published a final rule on May 16, 2011, amending the ITAR to allow the transfer of defense articles and technical data to dual or third-party nationals who are "bona fide, regular employees, directly employed by the foreign consignee or end-user." Such transfers must take place completely within the physical territory of the country where the end-user is located, where the governmental entity or international organization conducts official business, or where the consignee operates, and be within the scope of an approved export license, other export authorization, or license exemption. The end user or consignee must take a variety of measures designed to prevent the diversion of any exports; the final rule includes a requirement for the end user to screen employees for "substantive contacts with restricted or prohibited countries" listed in the ITAR. The rule, which became effective on August 15, 2011, also explains that, although "nationality does not, in and of itself, prohibit access to defense articles or defense services, an employee that has substantive contacts" with persons from prohibited countries "shall be presumed to raise a risk of diversion," unless the State Department determines otherwise. It is worth noting that, according to the State Department, "most diversions of U.S. Munitions List ... items appear to occur outside the scope of approved licenses, not within foreign companies or organizations providing access to properly screened dual national or third country national employees." The Obama Administration concentrated on rationalizing the control lists to form the basis from which other reforms will flow. The Administration first worked to transform the current USML from a "negative list" characterized by general descriptions of articles and design-intent-based criteria to one resembling the current CCL, a "positive" list of dual-use items that are controlled according to objective criteria or parameters. This is being done through the "bright line" process to determine which items should be controlled as dual-use goods and which should be controlled as munitions. The bright line is being determined at the commodity level, based on technical specification and military needs, and is not an overarching concept or framework. The Obama Administration argued that the bright line is necessary, in part, because of the USML's current reliance on design intent (i.e., whether an item was "specifically designed, modified, or adapted" for military use) and its catch-all controls of parts and components of these items. While the CCL is described as more "positive," it too contains entries containing the term "specially designed" for a specific purpose that may need to be modified to conform to bright line standards. Each category of the USML has been screened by an interagency team led by DOD; proposed rewrites to each USML category, including certain items proposed to be moved to the CCL, have been published as proposed rulemakings. Originally, each of the items on the resulting USML list was to have been assigned to a tier to determine its level of control. The Obama Administration created three tiers applicable to both the CCL and the USML to categorize a different level of control. However, the Administration postponed this process, reportedly because it would have been necessary to decide on the tiers for all USML items prior to publishing any revised USML categories. Deputy Assistant Secretary Nilsson testified that the Obama Administration prioritized revising the categories which have the greatest effect on U.S. military interoperability with allied governments. To date, the executive branch has completed transferring items in the following categories from the USML to the CCL: Category IV (launch vehicles, missiles, rockets, torpedoes, bombs, mines, and other military explosive devices; Category V (explosives and energetic materials, propellants, incendiary agents and their constituents); Category VI (vessels of war and naval equipment); Category VII (tanks and military vehicles); Category VIII (aircraft and associated equipment); Category IX (military training equipment); Category X (protective personal equipment and shelters); Category XI (military electronics); Category XII (fire control, range finder, optical and guidance and control equipment); Category XIII (auxiliary military equipment); Category XIV (toxicological agents, including chemical agents, biological agents, and associated equipment); Category XV(spacecraft and related articles); Category XVI (nuclear weapons related articles); Category XVIII (directed energy weapons); and Category XX (submersible vessels and oceanic equipment). The State Department also created a new USML Category XIX (gas turbine engines). Then-Deputy Assistant Secretary Nilsson stated in September 2017 that items would not be moved from USML Categories I-III (firearms, close assault weapons and combat shotguns, guns and armament, ammunition/ordnance) to the CCL until 2018. The executive branch posted proposed rules concerning movement of items from these categories on May 14, 2018. On February 8, 2019, Representative Norma Torres introduced H.R. 1134 , the Prevent Crime and Terrorism Act of 2019, which would prohibit the President from removing "any item" from "category I, II, or III" of the USML. Similarly, on February 12, 2019, Senator Robert Menendez introduced S. 459 , the Stopping the Traffic in Overseas Proliferation of Ghost Guns Act, which states that "the President may not remove any firearm, or technical information relating to such firearm" from the USML. A final rule on a new "0Y521" classification series became effective on April 12, 2013. This series is used for items that are neither identified under an existing ECCN nor controlled under an existing U.S. or multilateral export control regime, but warrant control for foreign policy reasons or because they could provide a significant military or intelligence advantage. According to the EAR, such items "are typically emerging technologies." BIS has subsequently added new items to this series. Items so classified "must be re-classified under another ECCN within one calendar year from the date they are listed" in the relevant part of the EAR. If they are not reclassified, the items "are designated as EAR99 items unless either the CCL is amended to impose a control on such items under another ECCN or the ECCN 0Y521 classification is extended." BIS may extend this classification "for two one-year periods, provided that the U.S. Government has submitted a proposal to the relevant multilateral regime(s) to obtain multilateral controls over the item." BIS may further extend the classification "only if the Under Secretary for Industry and Security makes a determination that such extension is in the national security or foreign policy interests of the United States." According to the Obama Administration, the USML would contain "only those items that provide at least a significant military or intelligence applicability that warrant the controls the AECA requires." The reconstituted Munitions List may then be aligned with the CCL by adopting its A-E commodity organization structure and adding two additional categories: F and G for ITAR specific controls. As a result of this alignment, each USML category will be divided into seven groups: A—equipment, assemblies, and components; B—test, inspection, and production equipment; C—materials; D—software; E—technology; F—defense services; and G—manufacturing and production authorizations. As a result of the bright line process, the Obama Administration moved some USML items to the CCL. Under Section 38(f) of the AECA, the President may not remove any article from the USML until 30 days after providing notice to the House Foreign Affairs Committee, and the Senate Foreign Relations Committee, including a description of the nature of any subsequent controls on the item. Section 38(f)(6) of the AECA requires that "any major defense equipment" on the 600 series "shall continue to be subject to" several "notification and reporting requirements" of the AECA and the Foreign Assistance Act of 1961 (P.L. 87-195). In order to comply with Section 38(f), the manner in which USML items transferred to the CCL are to be controlled is described in a proposed rulemaking on July 15, 2011, and is part of the "mega rule" issued on April 16, 2013. It involves the creation of a "600 Series" subcategory of Export Control Classification Numbers (ECCNs) for each category on the CCL. This new series is populated by items that are judged not to need the relatively-stricter controls mandated under the USML. Items moved to the CCL in this manner require a license to all destinations except Canada. All items controlled pursuant to multilateral control regimes retain their existing controls. In addition, "600 Series" items will be subject to a general policy of denial to countries subject to a U.S. or U.N. arms embargo. Such items are also subject to the prohibition on Defense Department procurement of "goods and services" on the USML "from any Communist Chinese military company" mandated by the National Defense Authorization Act for Fiscal Year 2006 ( P.L. 109-163 ). The rule also places restrictions on the extent to which certain license exceptions can be applied. End-use items transferred to the 600 Series would be eligible for the recently announced Strategic Trade Authorization (STA) license exception (described below) only after a determination is jointly made by the State, Defense, and Commerce Departments that such an exception should be made available for the item in question. Most parts, components, and accessories transferred under this process would be automatically eligible for an STA license exception for exports to the governments of STA-eligible countries. Items expressly defined as "less significant" would be eligible for a license exception for destinations other than those controlled for antiterrorism reasons. "600 Series" items would also be eligible for other preexisting license exceptions. The U.S. control status of parts and components also is addressed by the 600 Series. Under the EAR, the license requirement is based on the finished product, generally without regard to its parts and components. However, a foreign product containing more than 25% controlled U.S. content (10% controlled U.S. content in the case of a transaction to a country identified as a state sponsor of terrorism) may require a reexport license from the United States. However, for ITAR-controlled items, DDTC has employed a jurisdictional interpretation known as a "see-through" rule, which subjects to ITAR control U.S.-origin parts and components incorporated into end products manufactured overseas. For items migrating to the 600 Series, a 25% rule applies, but no de minimus amount would apply to embargoed destinations. To facilitate the transfer of items from the USML to the CCL, the Obama Administration proposed a new definition of "specially designed." As noted above, the Administration sought to move away from the design-intent standard of the USML and the use of the catch-all phrase "specifically designed" for military use to subject parts and components to ITAR jurisdiction. The Obama Administration argued that new definition was necessary because "specifically designed" in the USML did not have the same meaning as the term "specially designed" which appears in the CCL and also in various multilateral control lists. The Administration also argued that removing the term(s) entirely by enumerating each part and component being moved from the USML to the CCL was infeasible. The Obama Administration published its final rule on the definition of "specially designed" on April 16, 2013. Some have dubbed the two-part definition as a "catch and release" approach because the first part may capture an item as specially designed for military use and the second part may release the item from control under the definition if it does not qualify under certain parameters. Under the first part of the regulation, an item qualifies as specially designed if (1) As a result of "development" has properties peculiarly responsible for achieving or exceeding the performance levels, characteristics, or functions in the relevant ECCN or U.S. Munitions List (USML) paragraph; or (2) Is a "part," "component," "accessory," "attachment," or "software" for use in or with a commodity or defense article 'enumerated' or otherwise described on the CCL or the USML. Under the regulation, if neither of these criteria apply to an item, then the item is not specially designed. If one or more of these criteria describes an item, the item is potentially qualified as specially designed and is subject to the following six exclusions. The item is excluded from being specially designed if it (1) Has been identified to be in an ECCN paragraph that does not contain "specially designed" as a control parameter or as an EAR99 item in a commodity jurisdiction (CJ) determination or interagency-cleared commodity classification (CCATS); (2) Is, regardless of 'form' or 'fit,' a fastener ( e.g. , screw, bolt, nut, nut plate, stud, insert, clip, rivet, pin), washer, spacer, insulator, grommet, bushing, spring, wire, solder; (3) Has the same function, performance capabilities, and the same or 'equivalent' form and fit, as a commodity or software used in or with an item that: (i) Is or was in "production" ( i.e. , not in "development"); and (ii) Is either not 'enumerated' on the CCL or USML, or is described in an ECCN controlled only for Anti-Terrorism (AT) reasons; (4) Was or is being developed with "knowledge" that it would be for use in or with commodities or software (i) described in an ECCN and (ii) also commodities or software either not 'enumerated' on the CCL or the USML (e.g., EAR99 commodities or software) or commodities or software described in an ECCN controlled only for Anti-Terrorism (AT) reasons; (5) Was or is being developed as a general purpose commodity or software, i.e., with no "knowledge" for use in or with a particular commodity (e.g., an F/A-18 or HMMWV) or type of commodity (e.g., an aircraft or machine tool); or (6) Was or is being developed with "knowledge" that it would be for use in or with commodities or software described (i) in an ECCN controlled for AT-only reasons and also EAR99 commodities or software; or (ii) exclusively for use in or with EAR99 commodities or software." Under this decision approach, the item is potentially "caught" as specially designed by the first two criteria, but it may be "released" from that definition if any of the six subsequent qualifiers apply. The Commerce regulations apply to the "600 series" of items moved from the USML. The proposed regulation to define specially designed in the ITAR as a replacement for the currently utilized "specifically designed" is similar in nature. In a speech on July 17, 2012, then-BIS Assistant Secretary Kevin Wolf acknowledged that the specially designed concept is "inherently difficult to apply in reality," and that it is "not consistent with the "ultimate goal of creating a truly positive, objective list of controlled items." However, he noted that, concurrent with this approach, BIS also published an advanced notice of proposed rulemaking in June 2012 seeking comments on the feasibility of enumerating or positively identifying each item determined classified as specially designed on the CCL. In 2011, the Obama Administration devised a new license exception known as the Strategic Trade Authorization (STA), which was designed to facilitate transfers to low-risk countries and to promote interoperability to allies in the field. To be eligible, exporters must provide notification to BIS of the transaction and a destination control statement notifying the foreign consignee of the exception's safeguard requirements; exporters must also obtain from the foreign consignee a statement acknowledging the consignee's understanding and willingness to comply with the requirements of the license exception. STA-eligible recipients of U.S. munitions items contained on the CCL are not allowed to reexport such items without a license. Such recipients are also prohibited from reexporting "STA-eligible items to any destination outside the STA-eligible countries." Under the final rulemaking, STA is available to 2 groups consisting of 44 countries. To a group of 36 countries made up of NATO partners and members of all 4 multilateral nonproliferation control regimes, dual-use items controlled for national security (NS), chemical or biological weapons, nuclear nonproliferation, regional stability, crime control, or significant items (hot section jet technology) are eligible for an STA. This includes almost all items on the CCL that are not controlled for statutory reasons. An additional eight countries are eligible for exports, reexports, or transfers controlled for NS-only and that are not designated as STA-excluded. The United States-Israel Strategic Partnership Act of 2014 ( P.L. 113-296 ) requires the President, "consistent with the commitments of the United States under international arrangements," to "take steps" to move Israel from the second list of countries to the first list of countries. However, Israel's STA status does not appear to have changed. An August 3, 2018, Commerce Department rule moved India from the second list of countries to the first list of countries. Dual-use items controlled for missile technology, chemical weapons, short supply, or surreptitious listening are not be eligible for export under an STA. Certain implements of execution and torture, pathogens and toxins, software and technology for "hot-sections" of aero gas-turbine engines, and encryption have also been excluded from the STA. The third singularity involves the creation of a streamlined export enforcement system. Under Phase I of the new approach, a single export "fusion center" would be created to "coordinate and de-conflict investigations, serve as a central point of contact for coordinating export control enforcement with Intelligence Community activities, and synchronize overlapping outreach programs." On November 9, 2010, the Obama Administration issued Executive Order 13558, which created the Export Enforcement Coordination Center (EECC). The center officially opened in March 2012 within the Department of Homeland Security and replaced and expanded on the functions of the existing National Export Enforcement Coordination Network in ICE. It consists of a director from the Department of Homeland Security and two deputies appointed from the Departments of Commerce and Justice, with an intelligence community liaison designated by the Director of National Intelligence. The center functions as the primary forum to coordinate export control enforcement efforts among the Departments of State, the Treasury, Commerce, Defense, Justice, Energy, and Homeland Security and the Director of National Intelligence and to resolve potential conflicts in criminal and administrative export control enforcement. The center is also able to screen all license applications. Previously, the OEE at BIS was the only entity that could screen dual-use licenses, whereas ICE could screen licenses from DDTC and OFAC. The unit will also establish government-wide statistical tracking capabilities for criminal and administrative enforcement activities. Also in March 2012, an Information Triage Unit was established in the Department of Commerce to serve as an information gathering and screening unit among law enforcement agencies, the intelligence community, and the export licensing agencies. The unit is designed to serve as a central point to disseminate relevant information for each license application prior to decisionmaking. There may be weaknesses in the EECC's mission execution. "[P]rocedures for coordination between the investigative export control enforcement agencies and the intelligence community have not been finalized," according to a March 2019 GAO report, which adds that the center's "lack of formal coordination" limits its effectiveness and has stalled "its efforts to develop standard operating procedures." Absent such coordination, the center "is limited in its ability to realize its full potential to facilitate enhanced coordination and intelligence sharing." The EECC is not to be confused with the National Export Control Coordinator, housed in the Justice Department, which is "responsible for ensuring full coordination between the Justice Department and the many other US law enforcement, licensing, and intelligence agencies that play a role in export enforcement." The role of the coordinator has been described as the chief prosecutor of export control enforcement with the authority to determine which cases to bring for criminal prosecution. The Donald Trump Administration may request the movement of the BIS Office of Export Enforcement to ICE. Currently, ICE conducts investigations and criminal enforcement for DDTC and OFAC, and by virtue of its authority under the IEEPA, it shares dual-use investigations with OEE. Removal of OEE to ICE will end this overlap of authority. The Obama Administration envisioned that a consolidated licensing agency would continue to have authority over administrative enforcement actions. The fourth singularity is the creation of a single information technology system for administering the export control system. The Departments of Commerce, State, and Defense have begun using the USXPORTS database, originally used by the Department of Defense to track referred license applications. The reform effort envisions that USEXPORTS will become the platform for a proposed single export license application form to be used by State, Commerce, and the Treasury's Office of Foreign Assets Control. The Department of Energy, Immigration and Customs Enforcement, and the Export Coordination Enforcement Center are also to use the database. The Obama Administration's plan called for the adoption of USXPORTS first for internal communications such as license referrals, while exporters would continue to use the existing SNAP-R and D-Trade electronic license filing portals. The Obama Administration indicated that eventually it wanted to facilitate interoperability between the license portals, the internal system, and Customs' Automated Export System (AES), the information system that tracks actual movement of goods. In conjunction with the single IT system, the Obama Administration developed a single license application form. To make this possible, the Administration standardized certain definitions between the different regulations, such as the use of the term "technology" in the EAR as opposed to the term "technical data" used in the ITAR. To assist in compliance with U.S. export regulations, the Obama Administration also compiled a consolidated screening list of over 24,000 entities from existing Commerce, Treasury, and State Department screening lists. The list consolidates the BIS Denied Person List, Unverified List, and Entity List; the Department of State's Nonproliferation Sanctions List; the Directorate of Defense Trade Controls Debarred List; and the Office of Foreign Assets Control Specially Designated Nationals List. While not announced as part of the four singularities, the Obama Administration proposed reforming encryption controls as one of the first deliverables in the export control reform process. The Administration announced on March 11, 2010, that it would change a filing requirement for exporters of products with encryption capabilities. At the time, exporters of such products were required to file for a technical review by the Commerce Department, a process that, according to the White House announcement, could take "between 30-60 days." The announcement advocated replacing this process with "a more efficient one-time notification-and-ship process," which would ensure that the "U.S. government still receives information it needs for its national security requirements while facilitating U.S. exports and innovation for new products and new technologies." The Commerce Department announced on June 25, 2010, that it was amending the Export Administration Regulations (EAR) as "the first step in the President's effort to reform U.S. encryption export controls." As described by the Commerce Department's Bureau of Industry and Security, the amendment to the EAR includes replacing, for encryption products "of lesser national security concern," the "30-day waiting requirement for a technical review" with a "provision that allows immediate authorization to export and reexport these products" after the exporter submits an electronic encryption registration to BIS; similarly replacing the 30-day requirement for most mass-market encryption products; an "overarching note to exclude particular products that use cryptography from being controlled as 'information security' items"—a measure that implements changes approved by the Wassenaar Arrangement members in December 2009; this regulatory change eliminates controls under the CCL on "[m]any items in which the use of encryption is ancillary to the primary function of the item"; and a provision that makes most encryption technology eligible for export and reexport to nongovernmental end-users in countries other than those of "greater national security concern." According to the June 2010 announcement of the EAR amendment, the United States "will also review other issues related to encryption controls." Decontrolling additional items would require approval by the members of the Wassenaar Arrangement. Appendix A. Basic Export Control Characteristics Appendix B. Dual-Use Export Licensing Process Appendix C. List of Acronyms AECA—Arms Export Control Act AES—Automated Export System BIS—Bureau of Industry and Security, Department of Commerce CBP—Customs and Border Protection, Department of Homeland Security CCL—Commerce Control List CML—Commerce Munitions List CPI—Counter-Proliferation Investigations DCIS—Defense Criminal Investigation Service DDTC—Directorate of Defense Trade Controls, Department of State DHS—Department of Homeland Security DOJ—Department of Justice DTSA—Defense Technology Security Administration EAA—Export Administration Act EAR—Export Administration Regulations ECCN—Export Control Classification Number EECC—Export Enforcement Coordination Center EEB—Economic, Energy, and Business Bureau, Department of State FP—Foreign Policy Controls GAO—Governmental Accountability Office IEEPA—International Emergency Economic Powers Act ICE—Immigration and Customs Enforcement Agency, Department of Homeland Security ISN—International Security and Nonproliferation Bureau, Department of State ITA—International Trade Administration, Department of Commerce ITAR—International Traffic in Arms Regulations MTCR—Missile Technology Control Regime NRC—Nuclear Regulatory Commission NS—National Security Controls NSG—Nuclear Suppliers Group OEE—Office of Export Enforcement ODTC—Office of Defense Trade Compliance, DDTC OFAC—Office of Foreign Assets Control, Department of the Treasury SI—Significant Items Controls SL—Surreptitious Listening Controls SS—Short Supply Controls STA—Strategic Trade Authorization USML—U.S. Munitions List
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Difficulty with striking an appropriate balance between national security and export competitiveness has made the subject of export controls controversial for decades. Through the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), the Export Controls Act of 2018 (ECA), and other authorities, the United States restricts the export of defense articles; dual-use goods and technology; certain nuclear materials and technology; and items that would assist in the proliferation of nuclear, chemical, and biological weapons or the missile technology used to deliver them. U.S. export controls are also used to restrict exports to certain countries on which the United States imposes economic sanctions. The ECA legislates dual-use controls. The U.S. export control system is diffused among several different licensing and enforcement agencies. Exports of dual-use goods and technologies—as well as some military items—are licensed by the Department of Commerce, munitions are licensed by the Department of State, and restrictions on exports based on U.S. sanctions are administered by the U.S. Department of the Treasury. Administrative enforcement of export controls is conducted by these agencies, while criminal penalties are issued by units of the Department of Homeland Security and the Department of Justice. Aspects of the U.S. export control system have long been criticized by exporters, nonproliferation advocates, allies, and other stakeholders as being too rigorous, insufficiently rigorous, cumbersome, obsolete, inefficient, or combinations of these descriptions. In August 2009, the Barack Obama Administration launched a comprehensive review of the U.S. export control system. In April 2010, then-Defense Secretary Robert M. Gates proposed an outline of a new system based on four singularities a single export control licensing agency for dual-use, munitions exports, and Treasury-administered embargoes, a unified control list, a single primary enforcement coordination agency, and a single integrated information technology (IT) system. The rationalization of the two control lists was the Obama Administration's focus. The Administration made no specific proposals concerning the single licensing agency, although the Administration implemented some elements of a future single system, such as a consolidated screening list and harmonization of certain licensing policies.
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The Fair Labor Standards Act (FLSA), enacted in 1938, is the federal legislation that establishes the general minimum wage that must be paid to all covered workers. The FLSA mandates broad minimum wage coverage. It also specifies certain categories of workers who are not covered by general FLSA wage standards, such as workers with disabilities or certain youth workers. In 1938, the FLSA established a minimum wage of $0.25 per hour. The minimum wage provisions of the FLSA have been amended numerous times since then, typically to expand coverage or raise the wage rate. Since its establishment, the minimum wage rate has been raised 22 separate times. The most recent change was enacted through P.L. 110-28 in 2007, which increased the minimum wage from $5.15 per hour to its current rate of $7.25 per hour in three steps (the final step occurring in 2009). States generally have three options in setting their minimum wage policies: (1) they can set their own minimum wage provisions that differ from those in the FLSA, (2) they can explicitly tie their minimum wage provisions to the FLSA, or (3) they can include no specific minimum wage provisions in state law. This report begins with a brief discussion of FLSA minimum wage coverage. It then provides a summary of state minimum wage laws, followed by an examination of rates and mechanisms of adjustments in states with minimum wage levels above the FLSA rate ( Table 1 provides summary data). Next, the report discusses the interaction of federal and state minimum wages over time, and finally, the Appendix provides detailed information on the major components of minimum wage policies in all 50 states and the District of Columbia. The state policies covered in this report include currently effective policies and policies enacted with an effective date at some point in 2019. While most states' scheduled state minimum wage rate changes (due to inflation adjustments or statutorily scheduled changes) occurred on January 1 of each year, a few states have rate increases scheduled for later in the year. Effective dates of rate increases are noted in Table 1 and in the Appendix . The FLSA extends two types of minimum wage coverage to individuals: "enterprise coverage" and "individual coverage." An individual is covered if they meet the criteria for either category. To be covered by the FLSA at the enterprise or business level, an enterprise must have at least two employees and annual sales or "business done" of at least $500,000. Annual sales or business done includes all business activities that can be measured in dollars. Thus, for example, retailers are covered by the FLSA if their annual sales are at least $500,000. In non-sales cases, a measure other than sales must be used to determine business done. For example, for enterprises engaged in leasing property, gross amounts paid by tenants for property rental will be considered business done for purposes of determining enterprise coverage. In addition, regardless of the dollar volume of business, the FLSA applies to hospitals or other institutions primarily providing medical or nursing care for residents; schools (preschool through institutions of higher education); and federal, state, and local governments. Thus, regardless of how enterprise coverage is determined (by business done or by specified institutional type), all employees of a covered enterprise are considered to be covered by the FLSA. Although an enterprise may not be subject to minimum wage requirements if it has less than $500,000 in annual sales or business done, employees of the enterprise may be covered if they are individually engaged in interstate commerce or in the production of goods for interstate commerce. To be engaged in interstate commerce—the definition of which is fairly broad—employees must produce goods (or have indirect input to the production of those goods) that will be shipped out of the state of production, travel to other states for work, make phone calls or send emails to persons in other states, handle records that are involved in interstate transactions, or provide services to buildings (e.g., janitorial work) in which goods are produced for shipment outside of the state. While individual coverage is broad under the FLSA, there are also specific exemptions from the federal rate, including individuals with disabilities; youth workers; tipped workers; and executive, administrative, and professional workers, among others. In 1938, the FLSA established a minimum wage of $0.25 per hour. The minimum wage provisions of the FLSA have been amended numerous times since then, typically for the purpose of expanding coverage or raising the wage rate. Since its establishment, the minimum wage rate has been raised 22 separate times. The most recent change was enacted in 2007 ( P.L. 110-28 ), which increased the minimum wage from $5.15 per hour to its current rate of $7.25 per hour in three steps. Figure 1 shows the nominal and real (inflation-adjusted) value of the federal minimum wage from its enactment in 1938 through 2018. The real value of the minimum wage generally rose from 1938 to 1968, after which it has generally fallen in real terms, with some brief increases in value following periodic statutory rate changes. From an initial rate of $0.25 per hour in 1938 ($4.43 in inflation-adjusted terms), the minimum wage increased to $1.60 per hour in 1968 ($11.50 in inflation-adjusted terms, a peak value to date). The real value of the minimum wage has fallen by $1.20 since it was increased to $7.25 in 2009. State policymakers may also choose to set labor standards that are different from federal statutes. The FLSA establishes that if a state enacts minimum wage, overtime, or child labor laws more protective of employees than those provided in the FLSA, then state law applies. In the case of minimum wages, this means FLSA-covered workers are entitled to the higher state minimum wage in those states with rates above the federal minimum. On the other hand, FLSA-covered workers would receive the FLSA minimum wage in states that have set minimum wages lower than the federal rate. Given the generally broad minimum wage coverage of the FLSA, it is likely that most workers in states with minimum wages below the federal rate are covered by the FLSA rate. In 2019, the range of state minimum wage rates is as follows: 29 states and the District of Columbia have enacted minimum wage rates above the federal rate of $7.25 per hour; 2 states have minimum wage rates below the federal rate; 5 states have no state minimum wage requirement; and the remaining 14 states have minimum wage rates equal to the federal rate. In the states with no minimum wage requirements or wages lower than the federal minimum wage, only individuals who are not covered by the FLSA are subject to those lower rates. The Appendix provides detailed information on state minimum wage policy in all 50 states and the District of Columbia, including the legislation authorizing the state minimum wage and the relevant legislative language regarding the rate and mechanism of adjustment. The remainder of this report focuses on states with minimum wages above the federal rate. In states with minimum wage rates above the federal rate, variation occurs mainly across two dimensions: the rate and the mechanism of adjustment to the rate. This section (including data in Table 1 ) summarizes these two dimensions for the states with rates currently above the federal minimum. State rates range from $0.25 to $6.75 above the federal rate, with a majority of these states using some sort of inflation measure to index the state minimum wage. In the 29 states and the District of Columbia with minimum wage rates above the federal rate in 2019, minimum hourly rates range from $7.50 per hour in New Mexico to $12.00 per hour in Massachusetts and Washington and $14.00 in the District of Columbia. Of the states with minimum wage rates above $7.25: 3 states have minimum wages within $1 of the federal rate of $7.25 per hour; 10 states have rates between $1.00 and $2.00 per hour above the federal rate; and 16 states and the District of Columbia have rates greater than $2.00 per hour above the federal rate (i.e., $9.26 or higher). Figure 2 shows the geographic and rate dispersion of state minimum wages. In terms of coverage, a majority of the civilian labor force is in states with a minimum wage rate above the federal rate of $7.25. Specifically, the 29 states and the District of Columbia with minimum wage rates above $7.25 represent about 61% of the total civilian labor force, which means the federal rate is the wage floor in states representing 39% of the labor force. In any given year, the exact number of states with a minimum wage rate above the federal rate may vary, depending on what mechanism is in place to adjust the state minimum wage. Some states specifically set rates above the federal rate. Other states have rates above the federal minimum wage because the state minimum wage rate is indexed to a measure of inflation or is increased in legislatively scheduled increments, and thus the state rate changes even if the federal minimum wage stays unchanged. Below are the two main approaches to regulating the adjustment of state minimum wage rates in states with rates above the federal minimum: legislatively scheduled increases and indexing to inflation. In this section, states are counted by the primary method of adjustment. While most states use only one of these methods, some states combine a series of scheduled increases followed by indexing the state rate to a measure of inflation. In these cases, states are counted as "indexing to inflation," as that is the long-term mechanism of adjustment in place. If a state adopts a minimum wage higher than the federal rate, the state legislature may specify a single rate in the enacting legislation and then choose not to address future rates. In these cases, the only mechanism for future rate changes is future legislative action. Alternatively, a state may specify future rates in legislation through a given date. Rhode Island in 2017, for example, set a rate of $10.10 per hour beginning January 1, 2018, and $10.50 beginning January 1, 2019. After the final increase, the rate will remain at $10.50 per hour until further legislative action. This is the same approach taken in the most recent federal minimum wage increase ( P.L. 110-28 ), which increased the minimum wage from $5.15 an hour in 2007 to $7.25 per hour in 2009 in three phases. Of the 29 states and the District of Columbia with minimum wage rates above the federal rate, 9 currently have no scheduled increases beyond 2019, while Arkansas, Massachusetts, and Michigan have legislatively scheduled rate increases after 2019. If a minimum wage rate is established as a fixed amount and not increased, its value will erode over time due to inflation. For this reason, several states have attempted to maintain the value of the minimum wage over time by indexing the rate to some measure of inflation. This mechanism provides for automatic changes in the minimum wage over time and does not require legislative action to make annual adjustments. Currently, nine states index state minimum wages to a measure of inflation. In addition, another eight states and the District of Columbia are scheduled in a future year to index state minimum wage rates to a measure of inflation. Thus, of the total of 17 states and the District of Columbia that currently or are scheduled to index minimum wage rates, seven states—Arizona, Montana, Nevada, New York, Oregon, South Dakota, and Vermont—index the state minimum wage to the national Consumer Price Index for All Urban Consumers (CPI-U); five states—California, Missouri, New Jersey, Ohio, and Washington—index the state minimum wage to the national Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W); two states—Alaska and Colorado—and the District of Columbia use a subnational version of the CPI-U to index the state minimum wage; two states—Florida and Maine—use a regional version of the CPI-W to index the minimum wage; and one state (Minnesota) uses the implicit price deflator for personal consumption expenditures (PCE) to index the minimum wage. While scheduled increases and indexation are the two main ways that states adjust their minimum wage rates, a few states also add a reference to the federal minimum wage rate as a possible mechanism of adjustment. Thus any time the federal rate changes, the state rate may change. Currently, Alaska, Connecticut, the District of Columbia, and Massachusetts use this federal reference to supplement their primary mechanisms of adjusting state minimum wage rates. In Alaska, the state minimum wage rate is indexed to the CPI-U for Anchorage Metropolitan Statistical Area. However, Alaska state law requires that the state minimum wage must be at least $1.00 per hour higher than the federal rate. So it is possible that a federal wage increase could trigger an increase in the Alaska minimum wage, but the main mechanism is indexation to inflation. Although Connecticut does not currently include scheduled rate increases in the minimum wage, Connecticut state law requires that the state rate must exceed the federal minimum wage rate by 0.5% if the federal rate becomes greater than or equal to the state rate. The District of Columbia's minimum wage rate is the higher of the level required by the District of Columbia statute or the federal rate plus $1.00. Starting in 2021, the District of Columbia minimum wage will be indexed to inflation and the reference to the federal rate will no longer be in effect. While Massachusetts law includes scheduled rate increases in the minimum wage through 2023, the law also requires that the state rate must be at least $0.50 above federal minimum wage rate. Because federal and state minimum wages do not change in regular intervals or by regular increments, the number of states and the share of the labor force covered by higher minimum wages changes annually. In general, during periods in which the federal minimum wage remains constant, more states enact higher minimum wages and the share of the workforce for which the federal rate serves as the floor likewise decreases. When the federal rate increases, some state rates become equal to or less than the federal rate. Table 1 presents a snapshot of minimum wage rates in the 29 states and the District of Columbia with minimum wages above the federal rate from 2018 through 2024, while Figure 3 shows the changes in the coverage of the federal minimum wage. Specifically, Figure 3 plots the percentage of the civilian labor force residing in states in which the federal wage serves as the floor. If no state had a minimum wage above the federal rate, then the federal minimum wage would be the floor for states in which 100% of the labor force resides. Similarly, if every state had a minimum wage above the current rate of $7.25, then the federal rate would not be binding for the labor force. Instead the interaction of federal and state rates has led to the federal minimum wage playing a fluctuating, but generally decreasing, role in establishing a wage floor for the civilian labor force, particularly during periods in which the federal rate is not increased. Examining the specific time periods around changes in the federal minimum wage (see Figure 1 for the history of federal minimum wage rate changes), data in Figure 3 show a general trend toward a lower share of the labor force being covered by the federal minimum wage only. Federal rate increases in 2007 through 2009 mitigated this reduction, as did earlier changes in the federal rate. In the period from 1983 through 1989, the federal minimum wage remained constant at $3.35 per hour. Prior to the federal increases in 1990 and 1991, the number of states with higher minimum wages rose from 3 in 1984 to 16 in 1989 and the share of the U.S. civilian labor force in states for which the federal rate was the floor fell from 98% to 70%. Following a two-step federal increase in 1990 and 1991 from $3.35 to $4.25 per hour, the number of states with higher minimum wages fell to 8 in 1992, which meant that the federal rate was the floor for states comprising 92% of the civilian labor force. The next federal minimum wage increase occurred in two steps in 1996 and 1997, increasing from $4.25 to $5.15 per hour. Prior to that increase, in 1995, there were 10 states, representing 10% of the civilian labor force, with minimum wages above the federal rate. After the second increase in 1997, the number of states with higher minimum wages dropped to 8, but the share of the labor force in states for which the federal rate served as a floor decreased to 82%. The federal minimum wage did not increase after 1997 until 2007. During much of that period the number of states with higher minimum wages stayed somewhat steady, increasing from 8 (comprising 18% of the civilian labor force) in 1998 to 12 (comprising 21% of the civilian labor force) in 2003. However, by 2006, 22 states representing 50% of the civilian labor force had minimum wage rates above the federal rate. This increase was due in part to a few populous states, such as Florida, Michigan, and New York, adopting minimum wage rates above the federal rate in this period. Following the three-step increase in the federal minimum wage from $5.15 to the current $7.25 (2007-2009), 15 states, comprising 33% of the civilian labor force, had rates above the federal minimum wage in 2010. By 2019, this rose to 29 states and the District of Columbia, which means that the federal rate is the wage floor in states representing 39% of the civilian labor force. For the 29 states and the District of Columbia with state minimum wage rates above the federal rate as of 2019, Table 1 and much of the text above summarizes information on those states' minimum wage policies, highlighting minimum wage rates and mechanisms used to establish and adjust wage rates. As discussed previously, for those states with current or scheduled minimum wages above the federal rate, three main mechanisms are in place to adjust future rates: (1) scheduled increases, (2) indexation to inflation, or (3) reference to the federal rate plus an add-on (i.e., a state minimum wage is a percentage or dollar amount above the federal rate). For the 21 states with minimum wage rates equal to or below the federal rate, however, there are no mechanisms in place to move rates above the federal rate. Thus, the main difference within this group of states is the relationship of the state rate, if any, to the federal rate. For those 21 states with minimum wages equal to or below the federal rate, the state rate may be set in four ways: No state minimum wage provisions: In five states—Alabama, Louisiana, Mississippi, South Carolina, and Tennessee—there are no provisions for state minimum wage rates. In practice, this means that most workers in these states are covered by the FLSA minimum wage provisions since coverage is generally broad. State minimum wage provisions with no reference to the FLSA: Five states have state minimum wage rates but do not reference the FLSA. Two of these states—Georgia and Wyoming—have state rates below $7.25, while three of these states—Kansas, North Dakota, and Wisconsin—have rates equal to $7.25. However, because there is no reference to the FLSA rate or other provision for adjustment in any of these states, the state rate does not change unless the state policy is changed. State minimum wage equals the FLSA rate: Six states—Idaho, Indiana, New Hampshire, Oklahoma, Texas, and Virginia—set the state rate equal to the FLSA rate. Thus, when the FLSA rate changes, the state rates in these six states change to equal the FLSA rate. State minimum wage equals FLSA rate if FLSA is greater: In four states—Iowa, Kentucky, North Carolina, and Pennsylvania—the state rate is specified separately but includes a provision to equal the FLSA rate if the latter is above the state specified rate. Table A-1 provides detailed information about minimum wage policies in the 50 states and the District of Columbia, including those summarized in a more concise manner in Table 1 .
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The Fair Labor Standards Act (FLSA), enacted in 1938, is the federal legislation that establishes the general minimum wage that must be paid to all covered workers. While the FLSA mandates broad minimum wage coverage, states have the option of establishing minimum wage rates that are different from those set in it. Under the provisions of the FLSA, an individual is generally covered by the higher of the state or federal minimum wage. As of 2019, minimum wage rates are above the federal rate of $7.25 per hour in 29 states and the District of Columbia, ranging from $0.25 to $6.75 above the federal rate. Another 14 states have minimum wage rates equal to the federal rate. The remaining 7 states have minimum wage rates below the federal rate or do not have a state minimum wage requirement. In the states with no minimum wage requirements or wages lower than the federal minimum wage, only individuals who are not covered by the FLSA are subject to those lower rates. In any given year, the exact number of states with a minimum wage rate above the federal rate may vary, depending on the interaction between the federal rate and the mechanisms in place to adjust the state minimum wage. Adjusting minimum wage rates is typically done in one of two ways: (1) legislatively scheduled rate increases that may include one or several increments; (2) a measure of inflation to index the value of the minimum wage to the general change in prices. Of the 29 states and the District of Columbia with minimum wage rates above the federal rate, 9 currently have no scheduled increases beyond 2019, 3 states have legislatively scheduled rate increases after 2019, and 17 states and the District of Columbia have scheduled increases through a combination of planned increases and current- or future-year indexation of state minimum wage rates to a measure of inflation. Because the federal and state minimum wage rates change at various times and in various increments, the share of the labor force for which the federal rate is the binding wage floor has changed over time. Since 1981, there have been three series of increases in the federal minimum wage rate—1990-1991, 1996-1997, and 2007-2009. During that same period, there have been numerous changes in state minimum wage policies. As a result of those interactions, the share of the U.S. civilian labor force living in states in which the federal minimum wage is the floor has fluctuated but generally declined, and is about 39% as of 2018.
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One of the most common methods for redistributing spending priorities in appropriations bills on the House floor is through offset amendments. House offset amendments generally change spending priorities in a pending appropriations measure by increasing spending for certain activities (or creating spending for new activities not previously included in the bill) and offsetting the increase(s) by decreasing or striking funding for other activities in the bill. For example, an amendment increasing funding for one agency funded in the bill by $3 million and decreasing funding for another agency by the same amount in the same bill would be an offset amendment. These amendments may transfer funds between two activities or among several activities. In addition, certain offset amendments may reduce funding with across-the-board spending reductions. Representatives use offset amendments for a variety of reasons, including to (1) ensure that proposals increasing funding for certain activities in any appropriations measure do not violate parliamentary rules enforcing certain spending ceilings; (2) comply with the prohibition against increasing total spending in a general appropriations bill; (3) garner support for efforts to reduce funding for certain activities by transferring those funds to popular programs; and (4) provide a focal point for discussion of a particular issue. This report is an introduction to selected House rules and practices governing the consideration of offset amendments to appropriations measures considered in the Committee of the Whole House on the State of the Union (or Committee of the Whole). It analyzes the parliamentary context providing the need for offset amendments; the two types of offset amendments, clause 2(f) and reachback (or fetchback) offset amendments, including procedural factors regarding each; and the mechanisms for waiving House rules. The report concludes with highlights on the procedural advantages of each offset amendment type. This report is not an official statement of House procedures. The House Parliamentarian advises the presiding officer on procedural issues regarding offset amendments and other matters. Although this report provides useful background information, it should not be considered a substitute for consultation with the Parliamentarian on specific procedural problems and opportunities. Offset amendments are needed to ensure amendments increasing funding for certain activities in a regular appropriations bill, supplemental appropriations bill, or continuing resolution do not also cause spending ceilings associated with the annual budget resolution to be exceeded. Additionally, a separate order of the House prohibits amendments increasing the total spending level in a general appropriations bill. Under the Congressional Budget Act of 1974, as amended, Congress typically considers an annual budget resolution each spring. These measures are under the jurisdiction of the House and Senate Budget Committees. Each budget resolution establishes, in part, total new budget authority and outlay ceilings for federal government activities for the upcoming fiscal year. Once these figures are finalized, under Section 302(a) of the Congressional Budget Act, the new budget authority and outlays are required to be allocated among the House committees with jurisdiction over spending, and each committee is given specific spending ceilings (referred to as the 302(a) allocations ). The House Appropriations Committee receives separate allocations for discretionary and direct spending and, in turn, is required under Section 302(b) to subdivide its 302(a) allocations among its 12 appropriations subcommittees, providing each subcommittee with its spending ceiling ( 302(b) subdivisions ). In the case of the Appropriations Committee, these allocations are only established for the upcoming fiscal year because appropriations measures are annual. Two Congressional Budget Act points of order, under Sections 302(f) and 311(a), enforce selected spending ceilings. The 302(f) point of order prohibits, in part, floor consideration of any committee-reported appropriations measure and related amendments providing new budget authority for the upcoming fiscal year that would cause the applicable 302(a) or 302(b) allocations of new budget authority for that fiscal year to be exceeded. In effect, the application of this point of order on appropriations legislation is generally limited to discretionary spending. If, for example, the 302(b) subdivision in new discretionary budget authority for a fiscal year is $24 billion and the reported bill would provide the same amount for the same fiscal year, any amendment proposing an increase in new discretionary budget authority for activities in the bill (or creating new discretionary budget authority) would cause the 302(b) limit for that bill to be exceeded, triggering the 302(f) point of order. An offset amendment, however, that also includes a commensurate decrease in new discretionary budget authority for activities in the bill would not prevent a violation of the rule. The second rule, the 311(a) point of order, prohibits, in part, floor consideration of any committee-reported appropriations measure and related amendments providing new budget authority for the upcoming fiscal year that would cause the applicable total budget authority and outlay ceilings in the budget resolution for that fiscal year to be exceeded. As the amounts of all the spending measures considered in the House accumulate, they could potentially reach or exceed these ceilings. This point of order would typically affect the last spending bills to be considered, such as supplemental appropriations measures or the last regular appropriations bills. If a Representative raises a point of order that an amendment violates either rule and the presiding officer sustains the point of order, the amendment falls. Appropriations measures considered on the House floor are typically at or just below the level of the subcommittee's 302(b) subdivision and, in some cases, the committee's 302(a) allocation and the total spending ceiling as well. The structure of appropriations measures has a direct impact on the form of offset amendments. Because regular appropriations bills and supplementals generally include several lump-sum and line-item appropriations, adding a new appropriation or increasing funding for an appropriation in the bill typically requires an offset. The procedural necessity of an offset for a funding set-aside within a lump-sum appropriation is dependent on the structure of the appropriation in the bill. Regular appropriations bills and supplemental appropriations measures generally contain numerous unnumbered paragraphs. Most paragraphs provide a lump-sum amount (usually an appropriation) for similar programs, projects, or activities. Such paragraphs are referred to as lump-sum appropriations . A few paragraphs may provide an appropriation for a single program or project, referred to as a line-item appropriation . Most appropriations paragraphs correspond to a unique budget account. The total net spending levels provided in an appropriations bill include all lump-sum and line-item appropriations, rescissions, and other provisions affecting spending. An amendment increasing a lump-sum or line-item appropriation as well as adding a new appropriation to a general appropriations bill would violate Section 3(d)(3) unless it was accompanied by a commensurate offset regardless of the level of spending in the measure. In addition, appropriations bills initially considered on the House floor are typically near or at the level of the subcommittee's 302(b) subdivision and, in some cases (particularly supplementals), the committee's 302(a) allocation and the total spending ceilings as well. An amendment increasing a lump-sum or line-item appropriation, therefore, could increase the amount of funding in the bill, causing it to exceed these ceilings. As a result, such an amendment typically requires an offset for it to be in order. Within a lump-sum appropriation, separate amounts are sometimes included in the bill that set aside spending for specified programs, projects, or activities (for purposes of this report, they are referred to as funding set-asides ). An amendment proposing to increase (or create) a funding set-aside in a lump-sum appropriation that has been entirely set aside in the bill would procedurally require a commensurate offset. In the example below, the three set-asides total $200 million, which is the total lump-sum amount. An amendment proposing an increase in any of the three set-asides that does not include an offset in one of the other set-asides would require an increase of the lump-sum amount. For necessary expenses, including salaries and related expenses, of the Executive Office for YYY, to implement program activities, $200,000,000, of which $100,000,000 is for the yellow program, $50,000,000 for the green program, and $50,000,000 for the blue program. By contrast, certain set-aside amendments would not increase lump-sum amounts. If a bill contains a lump-sum amount with no set-asides, for example, an amendment designating part (or all) of the funds for a particular purpose would not increase spending. In cases in which the lump-sum appropriation includes a set-aside(s) that does not affect the entire amount, an amendment setting aside only the remaining funds or a portion of those funds would also not increase spending. If enacted, the effect of either case would be reductions in funding for activities that were not set aside to accommodate funding in the bill that was specified as set-asides. To avoid such reductions, amendments may include offsets from other appropriations in the bill. There are two types of offset amendments, clause 2(f) and reachback (or fetchback) amendments, available during consideration of regular and supplemental appropriations bills in the Committee of the Whole. Clause 2(f) refers to clause 2(f) of House Rule XXI, which establishes some of the parliamentary procedures governing the consideration of such amendments. Clause 2(f) offset amendments consist of two or more amendments considered together (or en bloc) that would change amounts by directly adding text or changing text in the body of the bill. Reachback offset amendments , by contrast, are generally offered at the end of the bill, that change funding amounts by reference. The clause 2(f) offset amendment transfers appropriations among objects in the pending bill and, taken as a whole, does not cause the bill to exceed the total new budget authority or outlay levels already provided in the bill. An example of a clause 2(f) offset amendment follows. This amendment would have decreased the lump-sum appropriation for the Bureau of the Census, Periodic Censuses and Programs account by $10 million; increased the lump-sum appropriation for the Office of Justice Programs, State and Local Law Enforcement Assistance account by $10 million; and increased a set-aside within the latter appropriation for the Southwest Border Prosecutor Initiative by the same amount. Page 6, line 23, after t he dollar amount insert "(reduced by $10,000,000)." Page 42, line 8, after the dollar amount insert "(increased by $10,000,000)." Page 43, line 8, after the dollar amount insert "(increased by $10,000,000)." These offset amendments typically change a spending level by inserting after the amount a parenthetic increase or decrease (see example above). Under House rules, an amendment generally cannot amend previously amended text. Changing a monetary figure by a parenthetic increase or decrease placed after the amount text, rather than changing the amount in the text, however, is allowed. Under House rules, clause 2(f) offset amendments must be offered when the first portion of the bill to be amended is pending. In practice, however, they may be offered at other times if no Member objects. In the Committee of the Whole, appropriations bills are generally read for amendment sequentially by paragraph. After the reading clerk reads or designates a paragraph, the presiding officer entertains any points of order against that paragraph, and then Members may propose amendments to it. After the clerk has designated or begun reading the next paragraph, amendments to the former paragraph are not in order. Prior to consideration of a proposed clause 2(f) offset amendment, the presiding officer asks if any Member wants to raise a point of order against any provision the en bloc amendment would change. If a point of order against such a provision is sustained, the provision is stricken from the bill and is no longer amendable. Therefore, the offset amendment would fall as well, unless appropriately modified or amended by unanimous consent. There are four additional procedural implications regarding clause 2(f) offset amendments. These amendments (1) must offset any increase in both budget authority and outlays, (2) can only include language transferring appropriations, (3) may contain certain unauthorized appropriations, and (4) are exempt from a "demand for a division of the question." Under clause 2(f) of House Rule XXI, any spending increases in a clause 2(f) offset amendment must be offset by commensurate reductions in both new budget authority and outlays. The 302(f) point of order enforcing 302(a) and 302(b) allocations and Section 3(d)(3) only apply to budget authority. The spending increases and decreases contained in an offset amendment must be provided in the same fiscal year, the year of the pending appropriations bill. Offset amendments providing equal increases and decreases in new budget authority might not produce equal amounts of outlays in the same fiscal year. The amount of resulting outlays may vary among different accounts because the length of time needed to complete the activities funded may differ. It takes less time to purchase office supplies than to complete construction of an aircraft carrier. For example, in Table 1 , the distribution of outlays from $20 million in new budget authority varies between two accounts. Based on historical spending practices, the Congressional Budget Office (CBO) each year estimates the speed at which outlays from each appropriation will occur, referred to as the spendout rates (or outlay rates ). A spendout rate is the rate at which budget authority is expected to be spent (outlays) in a fiscal year. In the example in Table 1 , the FY2017 spending rate for the operating expenses account is 90%, whereas the rate for the construction account is 10%. The varying spendout rates of appropriations sometimes complicate efforts to increase budget authority. In the example in Table 2 , increasing FY2017 budget authority for an operating expenses account by $20 million produces $18 million in outlays. Decreasing a construction account by the same amount in budget authority, however, produces only $2 million in outlays. Under this scenario, reductions in three accounts produce the $18 million in outlays needed to fund the $20 million budget authority increase in operating expenses. By contrast, increasing the construction account by $20 million in budget authority would be easier because only $2 million in outlays would be required. Representatives (or their staff) routinely ask CBO to estimate the budgetary effects of their clause 2(f) offset amendments for informational purposes. If a point of order is raised under clause 2(f), the chair relies on determinations made by the House Appropriations Committee as to the budgetary effects of the amendment. Clause 2(f) offset amendments are, in part, amendments "proposing only to transfer appropriations among objects in the bill" by directly changing dollar amounts. Provisions that would not be considered "transferring appropriations" include adding a new lump-sum appropriation or spending set-aside, changing the amount of a rescission, providing an across-the-board spending reduction, or reaching back to provisions in the bill the House has already considered. Clause 2(a) of House Rule XXI generally prohibits unauthorized appropriations in certain committee-reported appropriations bills and amendments to such bills. Certain amendments, such as clause 2(f) offset amendments, however, may increase the level of funding for certain unauthorized appropriations already in the bill. Under clause 2(a), appropriations must generally be for purposes authorized by prior enactment of legislation concerning a program (or an agency, account, project, or activity). An "[a]uthorization for a program may be derived from a specific law providing authority for that particular program or from a more general existing law—'organic law'—authorizing appropriations for such programs." Authorizations of subsequent appropriations may be permanent or they may be multi-year or annual, expiring at the end of a specific time period. The rule prohibits floor consideration of appropriations for a purpose or program whose authorization has expired or whose budget authority exceeds the ceiling authorized, if any. Appropriations violating these restrictions are unauthorized appropriations . Appropriations bills frequently include unauthorized appropriations. Such appropriations are allowed to remain in an appropriations bill when the House adopts a special rule waiving points of order against the appropriation or, less frequently, when no one raises a point of order against it. Under House precedents, a germane amendment that merely perfects an unauthorized appropriation permitted to remain in the bill is allowed. An example would be an amendment that would only increase the unauthorized amount and would do so by either amending the amount text or by inserting a parenthetical increase after the amount (such as an en bloc clause 2(f) offset amendment). One scenario for providing such funding would follow the following steps: 1. An authorization act provided an authorization of appropriations of $2 million for program yellow through FY2016; as of the close of FY2016, the entire amount of the authorization had expired. 2. Subsequently, an FY2017 regular appropriations bill provides an unauthorized appropriation of $2 million for program yellow. 3. The House adopts a special rule waiving clause 2(a) of House Rule XXI against all provisions in the bill, allowing the above appropriation to remain. 4. A clause 2(f) offset amendment parenthetically increasing the unauthorized appropriation by $1 million for program yellow is allowed. Although clause 2(f) offset amendments may increase an unauthorized appropriation, they remain subject to budget authority and the outlay offset requirements of clause 2(f) of House Rule XXI. A clause 2(f) amendment may not propose to increase an "authorized appropriation" in an appropriations bill beyond the authorized level. For example, if an authorization act included a $2 million authorization for FY2017 and the regular appropriations bill provided that amount, an offset amendment increasing the amount above that level would be prohibited. Under clause 2(f) of House Rule XXI, these amendments are not subject to a "demand for a division of the question in the House or in the Committee of the Whole." That is, a Member cannot demand separate consideration of two or more provisions in such en bloc amendments. Instead. the House must consider the amendment as a whole. Reachback (or fetchback ) offset amendments add a new section (or title), typically at the end of an appropriations measure, that reaches back to change amounts previously considered by reference. For example, the following amendment inserted a new section at the end of the committee-reported FY2008 Labor, Health and Human Services, and Education regular appropriations bill ( H.R. 3043 , 110 th Congress): Title VI—Additional General Provisions Sec. 601. The amounts otherwise provided by this Act are revised by reducing the amount made available for the "Department of Labor, Employment and Training Administration, Training and Employment Services", by increasing the amount made available for the "National Institutes of Health, National Cancer Institute", and by increasing the amount made available for the "National Institutes of Health, National Institute of Neurological Disorders and Stroke" by $49,000,000, $10,000,000, and $10,000,000, respectively. Prior to adoption of Section 3(d)(3) of H.Res. 5 (112 th Congress), reachback amendments to general appropriations bills could have been offered that increased spending provided in the bill as long as they did not violate the 302(f) and 311(a) points of order. Reachback amendments must offset budget authority, but not necessarily outlays; may add new lump-sum appropriations and set-asides, subject to certain restrictions; may not include unauthorized appropriations; must be drafted to avoid a demand for a division of the question; and may provide across-the-board spending reductions as offsets. Under the 3(d)(3) and 302(f) points of order, only budget authority offsets are needed; but the 311(a) point of order applies to both new budget authority and outlays. Generally, the most restrictive points of order are those under 3(d)(3) and 302(f) enforcing the 302(b) subdivisions, which both enforce only budget authority. Furthermore, only the last spending measures considered for a fiscal year, such as supplementals or the last regular bills, are likely to breach the overall spending limit and violate the 311(a) point of order. For reachback amendments, budget authority offsets are generally the primary procedural concern. Opponents of a reachback amendment may, however, raise the lack of outlay offsets as a concern for policy reasons. They may also argue that the resulting outlay increases might present a procedural problem for the bill in the Senate or in conference. In the case of reachback amendments that also provide sufficient new budget authority reductions to offset any outlay increases, Representatives (or their staff) routinely ask CBO to estimate the outlay effect of their amendments. The spending increases and decreases contained in an offset amendment must be provided in the same fiscal year, the year of the pending appropriations bill. Reachback amendments may contain new appropriations and set-asides for certain activities not already included in the bill. Such new appropriations and set-asides must be germane to the bill. Under clause 7 of House Rule XVI, all amendments must be germane to the pending bill. That is, they may not add new subject matter to the bill. Reachback amendments offered at the end of the bill must be germane to the bill, and those offered at the end of a title must be germane to the title. Regular appropriations measures generally have broad subject matter, which may provide flexibility for reachback amendments. Set-asides may not, however, violate a House rule prohibiting legislation on a general appropriations bill (or legislation). Clause 2(b) of House Rule XXI prohibits legislation in committee-reported general appropriations bills, and clause 2(c) prohibits legislation in amendments to those measures. For purposes of this rule, legislation refers to any provision in a general appropriations bill or related amendment that changes existing law, such as proposals amending or repealing existing law or creating new law. The following are examples of legislative language: abolishing a department, agency, or program; providing, changing, limiting, or waiving an authorization; or proposing new rescissions in the appropriations bill. One of the guiding principles in interpreting this prohibition is that an amendment designating funds may not interfere with an executive branch official's statutory authority. For example, such amendments may not significantly alter the official's discretion. Language doing so changes existing law and is therefore prohibited. For example, if an authorization law provides an agency head with the authority to make decisions allocating funds within a particular lump-sum appropriation, an amendment proposing a new set-aside would alter the agency head's authority and would thus be out of order. In cases where a new set-aside would violate the rules, an amendment sponsor frequently does not include the set-aside in the amendment; instead, the sponsor merely discusses that set-aside in terms of intent and expectation during debate on the amendment. This approach is used to avoid the point of order against the amendment. The amendment's sponsor may also urge conferees to include the set-aside in any subsequent conference report. Recent House practice has also included amendments for which both the increase and the offset apply to the same provision in an appropriation bill. These amendments use the form of en bloc offset amendments in order to allow Members the opportunity to discuss a new set aside or other agency guidance without changing the overall level of funding provided in the bill. At the end of consideration, such amendments are withdrawn by unanimous consent. Under clause 2(a) of House Rule XXI, new appropriations and set-asides included in amendments must be proposed for authorized purposes. All new set-asides must also be proposed to authorized lump-sum appropriations. In contrast to clause 2(f) offset amendments, reachback amendments may not increase unauthorized appropriations permitted to remain in the bill because they do not change the text of the bill. The section added by a reachback amendment is considered adding a further unauthorized appropriation, as opposed to merely perfecting the text. Under clause 5 of House Rule XVI, a Member may demand separate consideration of two or more individual portions of an amendment if each portion identified, when standing alone, is a separate, substantive proposition and is grammatically separate "so that if one proposition is rejected a separate proposition will logically remain." Because reachback amendments are potentially subject to a demand for a division of the question, if the presiding officer rules that an amendment is divisible, each divided portion of the amendment will be considered separately and subject to separate debate and amendment, as well as a separate vote. Members often demand a division of the question on an amendment to more easily defeat one or more of the portions of that amendment separately. For example, a majority of Members might be opposed to the portion of an offset amendment that decreases funds for a particular program. One of them might demand a division of the question that, if granted, would allow a separate vote on the funding decrease portion of the amendment. Even if the amendment as a whole was not subject to a point of order, once one portion is defeated the remainder may be subject to the Section 3(d)(3) or Congressional Budget Act points of order. Reachback amendments may include as an offset across-the-board spending cuts. Clause 2(f) amendments may only directly change amounts in the bill. Parliamentary rules may be suspended or waived to consider offset amendments that violate these rules, typically by House adoption of a special rule. However, this approach has been used infrequently. There are certain procedural advantages of clause 2(f) amendments over reachback amendments and vice versa. There are generally three limited opportunities to suspend or waive the rules governing consideration of an offset amendment: (1) if no one raises a point of order; (2) if the House adopts a special rule explicitly waiving points of order against the amendment; or (3) if the House agrees by unanimous consent to waive the rules. Otherwise, if the presiding officer sustains a point of order against an amendment for violating the parliamentary rules previously discussed, the amendment falls. First, House rules are not generally self-enforcing. A Representative must raise a point of order that an amendment violates a specific rule. If no one opposes an amendment, a point of order does not have to be raised. Second, under current practice, the House Rules Committee usually reports a special rule setting additional procedural parameters for the consideration of appropriations measures. The House typically adopts the special rule and then considers the particular appropriations measure pursuant to it. If an offset amendment would violate one or more parliamentary rules, the sponsor may ask the Rules Committee to include a waiver protecting the amendment from the point(s) of order. Special rules generally do not provide special protection for offset amendments to appropriations bills. Third, a Member might ask to consider an amendment violating the rules by unanimous consent. A single Member, however, can prevent such consideration by simply objecting to the unanimous consent request. To attain their policy objectives, sponsors of offset amendments generally select either a clause 2(f) or reachback amendment and work within the rules governing their consideration. Appropriations bills typically include some unauthorized appropriations. Generally, the House Rules Committee reports a special rule adopted by the House, waiving the prohibition against unauthorized appropriations for most or all unauthorized appropriations in a reported bill. Clause 2(f) amendments can increase those unauthorized appropriations allowed to remain. Reachback amendments, however, can only increase authorized appropriations in the bill to their authorized level (if there is one). In some cases, entire bills or significant portions of bills have consisted of unauthorized appropriations. As a result, reachback amendments could not increase those amounts. For example, many of the lump-sum appropriations provided in the committee-reported regular defense appropriations bills have typically been unauthorized because of the timing of consideration of the annual defense authorization bill. The House has adopted special rules regarding each bill waiving the application of clause 2 of House Rule XXI. As a result, clause 2(f) amendments to those bills were in order, but reachback amendments were limited to the few, if any, authorized appropriations. The timing of clause 2(f) amendments is sometimes an advantage over reachback amendments because clause 2(f) amendments are offered earlier in a bill's consideration. By the time reachback amendments are considered, there may be fewer politically appealing offset options available. Amendments, including clause 2(f) amendments, may have already been adopted that reduced the account a reachback amendment sponsor selected for offsets. The account might be reduced to a point where there is no support for further reductions. Reachback amendments may add new lump-sum appropriations and set-asides within certain restrictions. Clause 2(f) amendments, by contrast, are limited to transferring appropriations among objects already in the bill. Reachback amendments may include as an offset an across-the-board spending cut, but clause 2(f) amendments may only directly change amounts in the bill. Another limited advantage of reachback amendments is that for most appropriations bills, reachback amendments must offset only new budget authority. Clause 2(f) amendments must offset both new budget authority and outlays. In practice, however, this advantage of reachback amendments over clause 2(f) amendments is limited because sponsors sometimes provide offsets in both budget authority and outlays to garner political support for reachback amendments.
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One of the most common methods for changing spending priorities in appropriations bills on the House floor is through offset amendments. House offset amendments may generally change spending priorities in a pending appropriations measure by increasing spending for certain activities (or creating spending for new activities not previously included in the bill) and offsetting the increase with funding decreases in other activities in the bill. Offset amendments are needed to avoid points of order under Sections 302(f) and 311(a) of the Congressional Budget Act, enforcing certain spending ceilings affecting regular appropriations bills, continuing resolutions (CRs), and supplemental appropriations measures (supplementals). In addition, amendments to general appropriations bills that would increase total spending provided in the bill must be entirely offset. Two types of House offset amendments are considered in the Committee of the Whole House on the State of the Union (Committee of the Whole): clause 2(f) and reachback (or fetchback) amendments. As provided under House Rule XXI, clause 2(f) offset amendments consist of two or more amendments considered together (or en bloc) that would change amounts by directly adding text or changing text in the body of the bill. Taken as a whole, the amendment does not increase the amount of funding in the pending bill. Such amendments (1) must provide offsets in both new budget authority and outlays, (2) can only include language transferring appropriations in the bill, and (3) may contain certain unauthorized appropriations. Reachback offset amendments are generally offered at the end of the bill and change funding amounts in the pending bill by reference. These amendments (1) must provide offsets in new budget authority, but not necessarily outlays; (2) may add new appropriations (and spending set-asides within certain restrictions); (3) cannot include unauthorized appropriations; and (4) may provide across-the-board spending reductions as offsets. Parliamentary rules governing consideration of offset amendments may be suspended or waived, typically by House adoption of a special rule but also by unanimous consent. The advantages of clause 2(f) amendments over reachback amendments are that clause 2(f) amendments may contain certain unauthorized appropriations and are typically considered before reachback amendments, sometimes limiting offset opportunities for reachback amendments. The main advantages of reachback amendments are that they may not have to offset outlays, may add new appropriations, and may include across-the-board spending reductions.
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From its headwaters in Colorado and Wyoming to its terminus in the Gulf of California, the Colorado River Basin covers more than 246,000 square miles. The river runs through seven U.S. states (Wyoming, Colorado, Utah, New Mexico, Arizona, Nevada, and California) and Mexico. Pursuant to federal law, the Bureau of Reclamation (Reclamation, part of the Department of the Interior [DOI]) plays a prominent role in the management of the basin's waters. In the Lower Basin (i.e., Arizona, Nevada, and California), Reclamation also serves as water master on behalf of the Secretary of the Interior, a role that elevates the status of the federal government in basin water management. The federal role in the management of Colorado River water is magnified by the multiple federally owned and operated water storage and conveyance facilities in the basin, which provide low-cost water and hydropower supplies to water users. Colorado River water is used primarily for agricultural irrigation and municipal and industrial (M&I) purposes. The river's flow and stored water also are important for power production, fish and wildlife, and recreation, among other uses. A majority (70%) of basin water supplies are used to irrigate 5.5 million acres of land; basin waters also provide M&I water supplies to nearly 40 million people. Much of the area that depends on the river for water supplies is outside of the drainage area for the Colorado River Basin. Storage and conveyance facilities on the Colorado River provide trans-basin diversions that serve areas such as Cheyenne, WY; multiple cities in Colorado's Front Range (e.g., Fort Collins, Denver, Boulder, and Colorado Springs, CO); Provo, UT; Albuquerque and Santa Fe, NM; and Los Angeles, San Diego, and the Imperial Valley in Southern California ( Figure 1 ). Colorado River hydropower facilities can provide up to 42 gigawatts of electrical power per year. The river also provides habitat for a wide range of species, including several federally endangered species. It flows through 7 national wildlife refuges and 11 National Park Service (NPS) units; these and other areas of the river support important recreational opportunities. Precipitation and runoff in the basin are highly variable. Water conditions on the river depend largely on snowmelt in the basin's northern areas. Observed data (1906-2018) show that natural flows in the Colorado River Basin in the 20 th century averaged about 14.8 million acre-feet (MAF) annually. Flows have dipped significantly during the current drought, which dates to 2000; natural flows from 2000 to 2018 averaged approximately 12.4 MAF per year . In 2018, Reclamation estimated that the 19-year period from 2000 to 2018 was the driest period in more than 100 years of record keeping. The dry conditions are consistent with prior droughts in the basin that were identified through tree ring studies; some of these droughts lasted for decades. Climate change impacts, including warmer temperatures and altered precipitation patterns, may further increase the likelihood of prolonged drought in the basin. Pursuant to the multiple compacts, federal laws, court decisions and decrees, contracts, and regulatory guidelines governing Colorado River operations (collectively known as the Law of the River ), Congress and the federal government play a prominent role in the management of the Colorado River. Specifically, Congress funds and oversees Reclamation's management of Colorado River Basin facilities, including facility operations and programs to protect and restore endangered species. Congress has also approved and continues to actively consider Indian water rights settlements involving Colorado River waters, and development of new and expanded water storage in the basin. In addition, Congress has approved funding to mitigate drought and stretch basin water supplies and has considered new authorities for Reclamation to combat drought and enter into agreements with states and Colorado River contractors. This report provides background on management of the Colorado River, including a discussion of trends and agreements since 2000. It also discusses the congressional role in the management of basin waters. In the latter part of the 19 th century, interested parties in the Colorado River Basin began to recognize that local interests alone could not solve the challenges associated with development of the Colorado River. Plans conceived by parties in California's Imperial Valley to divert water from the mainstream of the Colorado River were thwarted because these proposals were subject to the sovereignty of both the United States and Mexico. The river also presented engineering challenges, such as deep canyons and erratic water flows, and economic hurdles that prevented local or state groups from building the necessary storage facilities and canals to provide an adequate water supply. Because local or state groups could not resolve these "national problems," Congress considered ideas to control the Colorado River and resolve potential conflicts between the states. Thus, in an effort to resolve these conflicts and prevent litigation, Congress gave its consent for the states and Reclamation to enter into an agreement to apportion Colorado River water supplies in 1921. The below sections discuss the resulting agreement, the Colorado River Compact, and other documents and agreements that form the basis of the Law of the River, which governs Colorado River operations. The Colorado River Compact of 1922, negotiated by the seven basin states and the federal government, was signed by all but one basin state (Arizona). Under the compact, the states established a framework to apportion the water supplies between the Upper Basin and the Lower Basin, with the dividing line between the two basins at Lee Ferry, AZ, near the Utah border. Each basin was apportioned 7.5 MAF annually for beneficial consumptive use, and the Lower Basin was given the right to increase its beneficial consumptive use by an additional 1 MAF annually. The agreement also required Upper Basin states to deliver to the Lower Basin a total of 75 MAF over each 10-year period, thus allowing for averaging over time to make up for low-flow years. The compact did not address inter- or intrastate allocations of water (which it left to future agreements and legislation), nor did it address water to be made available to Mexico, the river's natural terminus; this matter was addressed in subsequent international agreements. The compact was not to become binding until it had been approved by the legislatures of each of the signatory states and by Congress. Congress approved and modified the Colorado River Compact in the Boulder Canyon Project Act (BCPA) of 1928. The act ratified the 1922 compact, authorized the construction of a federal facility to impound water in the Lower Basin (Boulder Dam, later renamed Hoover Dam) and related facilities to deliver water in Southern California (e.g., the All-American Canal, which delivers Colorado River water to California's Imperial Valley), and apportioned the Lower Basin's 7.5 MAF per year among the three Lower Basin states. It provided 4.4 MAF per year to California, 2.8 MAF to Arizona, and 300,000 acre-feet (AF) to Nevada, with the states to divide any surplus waters among them. It also directed the Secretary of the Interior to serve as the sole contracting authority for Colorado River water use in the Lower Basin and authorized several storage projects for study in the Upper Basin. Congress's approval of the compact in the BCPA was conditioned on a number of factors, including ratification by California and five other states (thereby allowing the compact to become effective without Arizona's concurrence), and California agreeing by act of its legislature to limit its water use to 4.4 MAF per year and not more than half of any surplus waters. California met this requirement by passing the California Limitation Act of March 4, 1929. Arizona did not ratify the Colorado River Compact until 1944, at which time the state began to pursue a federal project to bring Colorado River water to its primary population centers in Phoenix and Tucson. California opposed the project, arguing that under the doctrine of prior appropriation, California's historical use of the river trumped Arizona's rights to the Arizona allotment. California also argued that Colorado River apportionments under the BCPA included water developed on Colorado River tributaries, whereas Arizona claimed, among other things, that these apportionments included the river's mainstream waters only. In 1952, Arizona filed suit in the U.S. Supreme Court to settle the issue. Eleven years later, in the 1963 Arizona v. California decision, the Supreme Court ruled in favor of Arizona, finding that Congress had intended to apportion the mainstream of the Colorado River and that California and Arizona each would receive one-half of surplus flows. The same Supreme Court decision held that Section 5 of the BCPA controlled the apportionment of waters among Lower Basin States, and that the BCPA (and not the law of prior appropriation) controlled the apportionment of water among Lower Basin states. The ruling was notable for its directive to forgo traditional Reclamation deference to state law under the Reclamation Act of 1902, and formed the basis for the Secretary of the Interior's unique role as water master for the Lower Basin. The decision also held that Native American reservations on the Colorado River were entitled to priority under the BCPA. Later decrees by the Supreme Court in 1964 and 1979 supplemented the 1963 decision. Following the Arizona v. California decision, Congress eventually authorized Arizona's conveyance project for Colorado River water, the Central Arizona Project (CAP), in the Colorado River Basin Project Act of 1968 (CRBPA). As a condition for California's support of the project, Arizona agreed that, in the event of shortage conditions, California's 4.4 MAF has priority over CAP water supplies. In 1944, the United States signed a water treaty with Mexico (1944 U.S.-Mexico Water Treaty) to guide how the two countries share the waters of the Colorado River and the Rio Grande. The treaty established water allocations for the two countries and created a governance framework (the International Boundary and Water Commission) to resolve disputes arising from the treaty's execution. The treaty requires the United States to provide Mexico with 1.5 MAF of water annually, plus an additional 200,000 AF when a surplus is declared. During drought, the United States may reduce deliveries to Mexico in similar proportion to reductions of U.S. consumptive uses. The treaty has been supplemented by additional agreements between the United States and Mexico, known as m inutes . Projects originally authorized for study in the Upper Basin under BCPA were not allowed to move forward until the Upper Basin states determined their individual water allocations, which they did under the Upper Colorado River Basin Compact of 1948. The Upper Basin Compact established Colorado (where the largest share of runoff to the river originates) as the largest entitlement holder in the Upper Basin, with rights to 51.75% of any Upper Basin flows after Colorado River Compact obligations to the Lower Basin have been met. Other states also received percentage-based allocations, including Wyoming (14%), New Mexico (11.25%), and Utah (23%). Arizona was allocated 50,000 AF in addition to its Lower Basin apportionment, in recognition of the small portion of the state in the Upper Basin. Basin allocations by state following approval of the Upper Basin Compact (i.e., the allocations that generally guide current water deliveries) are shown below in Figure 2 . The Upper Basin Compact also established the Upper Colorado River Commission, which coordinates operations and positions among Upper Basin states. Subsequent federal legislation paved the way for development of Upper Basin allocations. The Colorado River Storage Project (CRSP) Act of 1956 authorized storage reservoirs and dams in the Upper Basin, including the Glen Canyon, Flaming Gorge, Navajo, and Curecanti Dams. The act also established the Upper Colorado River Basin Fund, which receives revenues collected in connection with the projects, to be made available for defraying the project's costs of operation, maintenance, and emergency expenditures. In addition to the aforementioned authorization of CAP in Arizona, the 1968 CRBPA amended CRSP to authorize several additional Upper Basin projects (e.g., the Animas La Plata and Central Utah projects) as CRSP participating projects. It also directed that the Secretary of the Interior propose operational criteria for Colorado River Storage Project units (including the releases of water from Lake Powell) that prioritize (1) Treaty Obligations to Mexico, (2) the Colorado River Compact requirement for the Upper Basin to deliver 75 MAF to Lower Basin states over any 10-year period, and (3) carryover storage to meet these needs. The CRBPA also established the Upper Colorado River Basin Fund and the Lower Colorado River Basin Development Fund, both of which were authorized to utilize revenues from power generation from relevant Upper and Lower Basin facilities to fund certain expenses in the sub-basins. Due to the basin's large water storage projects, basin water users are able to store as much as 60 MAF, or about four times the Colorado River's annual flows. Thus, storage and operations in the basin receive considerable attention, particularly at the basin's two largest dams and their storage reservoirs: Glen Canyon Dam/Lake Powell in the Upper Basin (26.2 MAF of storage capacity) and Hoover Dam/Lake Mead in the Lower Basin (26.1 MAF). The status of these projects is of interest to basin stakeholders and observers and is monitored closely by Reclamation. Glen Canyon Dam, completed in 1963, provides the linchpin for Upper Basin storage and regulates flows from the Upper Basin to the Lower Basin, pursuant to the Colorado River Compact. It also generates approximately 5 billion kilowatt hours (KWh) of electricity per year, which the Western Area Power Administration (WAPA) supplies to 5.8 million customers in Upper Basin States. Other significant storage in the Upper Basin includes the initial "units" of the CRSP: the Aspinall Unit in Colorado (including Blue Mesa, Crystal, and Morrow Point dams on the Gunnison River, with combined storage capacity of more than 1 MAF), the Flaming Gorge Unit in Utah (including Flaming Gorge Dam on the Green River, with a capacity of 3.78 MAF), and the Navajo Unit in New Mexico (including Navajo Dam on the San Juan River, with a capacity of 1 MAF). The Upper Basin is also home to 16 "participating" projects which are authorized to use water for irrigation, municipal and industrial uses, and other purposes. In the Lower Basin, Hoover Dam, completed in 1936, provides the majority of the Lower Basin's storage and generates about 4.2 billion KWh of electricity per year for customers in California, Arizona, and Nevada. Also important for Lower Basin Operations are Davis Dam/Lake Mohave, which regulates flows to Mexico under the 1944 Treaty, and Parker Dam/Lake Havasu, which impounds water for diversion into the Colorado River Aqueduct (thereby allowing for deliveries to urban areas in southern California) and CAP (allowing for diversion to users in Arizona). Further downstream on the Arizona/California border, Imperial Dam (a diversion dam) diverts Colorado River water to the All-American Canal for use in California's Imperial and Coachella Valleys. Reclamation monitors Colorado River reservoir levels and projects them 24 months into the future in monthly studies (called 24-month studies ). The studies take into account forecasted hydrology, reservoir operations, and diversion and consumptive use schedules to model a single scenario of reservoir conditions. The studies inform operating decisions by Reclamation looking one to two years into the future. They express water storage conditions at Lake Mead and Lake Powell in terms of elevation, as feet above mean sea level (ft). In addition to the 24-month studies, the CRBPA requires the Secretary to transmit to Congress and the governors of the basin states, by January 1 of each year, a report describing the actual operation for the preceding water year and the projected operation for the coming year. This report is commonly referred to as the annual operating plan (AOP). The AOP's projected January 1 water conditions for the upcoming calendar year establish a baseline for future annual operations. Since the adoption of guidelines by Reclamation and basin states in 2007 (see below section, " 2007 Interim Guidelines "), operations of the Hoover and Glen Canyon Dams have been tied to specific pool elevations at Lake Mead and Lake Powell. For Lake Mead, the first level of shortage (1 st Tier Shortage Condition), under which Arizona and Nevada's allocations would be decreased, would be triggered if Lake Mead falls below 1,075 ft. For Lake Powell, releases under tiered operations are based on storage levels in both Lake Powell and Lake Mead (specific delivery curtailments based on lake levels similar to Lake Mead have not been adopted). As of January 2019, Reclamation predicted that Lake Mead's 2019 elevation would remain above 1,075 ft (approximately 9.6 MAF of storage) and that Lake Powell would remain at its prior year level (i.e., the Upper Elevation Balancing Tier) during 2019. However, Reclamation also projected that there was a 69% chance of a 1 st Tier Shortage Condition at Lake Mead beginning in January 2020. Reclamation predicted a small (3%) chance of Lake Powell dropping to 3,490 feet, or minimum power pool (i.e., a level beyond which hydropower could not be generated) by 2020; the chance of this occurring by 2022 was greater (15%). Improved hydrology for 2019 may decrease the likelihood of shortage in the immediate future. Construction of most of the Colorado River's water supply infrastructure predated major federal environmental protection statutes, such as the National Environmental Policy Act (NEPA; 42 U.S.C. §§4321 et seq. ) and the Endangered Species Act (ESA; 87 Stat. 884, 16 U.S.C. §§1531-1544). Thus, many of the environmental impacts associated with the development of basin resources were not originally taken into account. Over time, multiple efforts have been initiated to mitigate these effects. Some of the highest-profile efforts have been associated with water quality (in particular, salinity control) and the effects of facility operations on endangered species. Salinity and water quality are long-standing issues in the Colorado River Basin. Parts of the Upper Basin are covered by salt-bearing shale (which increases salt content in water inflows), and salinity content increases as the river flows downstream due to both natural leaching and return flows from agricultural irrigation. The 1944 U.S.-Mexico Water Treaty did not set water quality or salinity standards in the Colorado River Basin. However, after years of dispute between the United States and Mexico regarding the salinity of the water reaching Mexico's border, the two countries reached an agreement on August 30, 1973, with the signing of Minute 242 of the International Boundary and Water Commission. The agreement guarantees Mexico that the average salinity of its treaty deliveries will be no more than 115 parts per million higher than the salt content of the water diverted to the All-American Canal at Imperial Dam in Southern California. To control the salinity of Colorado River water in accordance with this agreement, Congress passed the Colorado River Basin Salinity Control Act of 1974 ( P.L. 93-320 ), which authorized desalting and salinity control facilities to improve Colorado River water quality. The most prominent of these facilities is the Yuma Desalting Plant, which was largely completed in 1992 but has never operated at capacity. In 1974, the seven basin states also established water quality standards for salinity through the Colorado River Basin Salinity Control Forum. Congress enacted the ESA in 1973. As basin species became listed in accordance with the act, federal agencies and nonfederal stakeholders consulted with the U.S. Fish and Wildlife Service (FWS) to address the conservation of the listed species. As a result of these consultations, several major programs have been developed to protect and restore fish species on the Colorado River and its tributaries. Summaries of some of the key programs are below. The Upper Colorado Endangered Fish Recovery Program was established in 1988 to assist in the recovery of four species of endangered fish in the Upper Colorado River Basin. Congress authorized this program in P.L. 106-392 . The program is implemented through several stakeholders under a cooperative agreement signed by the governors of Colorado, Utah, and Wyoming; DOI; and the Administrator of WAPA. The recovery goals of the program are to reduce threats to species and improve their status so they are eventually delisted from the ESA. Some of the actions taken in the past include providing adequate instream flows for fish and their habitat, restoring habitat, reducing nonnative fish, augmenting fish populations with stocked fish, and conducting research and monitoring. Reclamation is the lead federal agency for the program and provides the majority of federal funds for implementation. It is also funded through a portion of Upper Basin hydropower revenues from WAPA; FWS; the states of Colorado, Wyoming, and Utah; and water users, among others. The San Juan River Basin Recovery Implementation Program was established in 1992 to assist in the recovery of ESA-listed fish species on the San Juan River, the Colorado's largest tributary. The program is concerned with the recovery of the Razorback sucker ( Xyrauchen texanus ) and Colorado pikeminnow ( Ptychocheilus Lucius ). Congress authorized this program in P.L. 106-392 with the aim to protect the genetic integrity and population of listed species, conserve and restore habitat (including water quality), reduce nonnative species, and monitor species. The Recovery Program is coordinated by FWS. Reclamation is responsible for operating the Animas-La Plata Project and Navajo Dam on the San Juan River in a way that reduces effects on the fish populations. The program is funded by a portion of revenues from power generation, Reclamation, participating states, and the Bureau of Indian Affairs. Recovery efforts for listed fish are coordinated with the Upper Colorado River Program discussed above. The Glen Canyon Dam Adaptive Management Program was established in 1997 in response to a directive from Congress under the Grand Canyon Protection Act of 1992 ( P.L. 102-575 ) to operate Glen Canyon Dam "in such a manner as to protect, mitigate adverse impacts to, and improve the values for which Grand Canyon National Park and Glen Canyon National Recreation Area were established." This program uses experiments to determine how water flows affect natural resources south of the dam. Reclamation is in charge of modifying flows for experiments, and the U.S. Geological Survey conducts monitoring and other studies to evaluate the effects of the flows. The results are expected to better inform managers how to provide water deliveries and conserve species. The majority of program funding comes from hydropower revenues generated at Glen Canyon Dam. The MSCP is a multistakeholder initiative to conserve 27 species (8 listed under ESA) along the Lower Colorado River while maintaining water and power supplies for farmers, tribes, industries, and urban residents. The MSCP began in 2005 and is planned to last for at least 50 years. The MSCP was created through consultation under ESA. To achieve compliance under ESA, federal entities involved in managing water supplies in the Lower Colorado River met with resource agencies from Arizona, California, and Nevada; Native American Tribes; environmental groups; and recreation interests to develop a program to conserve species along a portion of the Colorado River. A biological opinion (BiOp) issued by the FWS in 1997 served as a basis for the program. Modifications to the 1997 BiOp were made in 2002, and in 2005, the BiOp was renewed for 50 years. Nonfederal entities received an incidental take permit under Section 10(a) of the ESA for their activities in 2005 and shortly thereafter implemented a habitat conservation plan. The objective of the MSCP is to create habitat for listed species, augment the populations of species listed under ESA, maintain current and future water diversions and power production, and abide by the incidental take authorizations for listed species under the ESA. The estimated total cost of the program over its lifetime is approximately $626 million in 2003 dollars ($882 million in 2018 dollars) and is to be split evenly between Reclamation (50%) and the states of California, Nevada, and Arizona (who collectively fund the remaining 50%). The management and implementation of the MSCP is the responsibility of Reclamation, in consultation with a steering committee of stakeholders. Twenty-two federally recognized tribes in the Colorado River Basin have quantified water diversion rights that have been confirmed by court decree or final settlement. These tribes collectively possess rights to 2.9 MAF per year of Colorado River water. However, as of 2015, these tribes typically were using just over half of their quantified rights. Additionally, 13 other basin tribes have reserved water rights claims that have yet to be resolved. Increased water use by tribes with existing water rights, and/or future settlement of claims and additional consumptive use of basin waters by other tribes, is likely to exacerbate the competition for basin water resources. The potential for increased use of tribal water rights (which, once ratified, are counted toward state-specific allocations where the tribal reservation is located) has been studied in recent years. In 2014, Reclamation, working with a group of 10 tribes with significant reserved water rights claims on the Colorado River, initiated a study known as the 10 Tribes Study . The study, published in 2018, estimated that, cumulatively, the 10 tribes could have reserved water rights (including unresolved claims) to divert nearly 2.8 MAF per year. Of these water rights, approximately 2 MAF per year were decreed and an additional 785,273 AF (mostly in the Upper Basin) remained unresolved. The report estimated that, overall, the 10 tribes are diverting (i.e., making use of) almost 1.5 MAF of their 2.8 MAF in resolved and unresolved claims. Table 1 shows these figures at the basin and sub-basin levels. According to the study, the majority of unresolved claims in the Upper Basin are associated with the Ute Tribe in Utah (370,370 AF per year), the Navajo Nation in Utah (314,926 AF), and the Navajo Nation in the Upper Basin in Arizona (77,049 AF). When the Colorado River Compact was originally approved, it was assumed based on the historical record that average annual flows on the river were 16.4 MAF per year. According to Reclamation data, from 1906 to 2018, observed natural flows on the river at Lee Ferry, AZ—the common point of measurement for observed basin flows—averaged 14.8 MAF annually. Natural flows from 2000 to 2018 (i.e., during the ongoing drought) averaged considerably less than that—12.4 MAF annually. While natural flows have trended down, consumptive use in the basin has grown and has regularly exceeded natural flows since 2000. From 1971 to 2015, average total consumptive use grew from 13 MAF to over 15 MAF annually. Combined, the two trends have caused a significant drawdown of basin storage levels ( Figure 3 ). From 2009 to 2015, the largest consumptive water use occurred in the Lower Basin (7.5 MAF per year), while Upper Basin consumptive use averaged about 3.8 MAF annually. Use of Treaty water by Mexico (1.5 MAF per year) and evaporative loss from reservoirs (approximately 2 MAF per year) in both basins also factored significantly into total basin consumptive use. Notably, consumptive use in the Lower Basin, combined with mandatory releases to Mexico, regularly exceeds the mandatory 8.23 MAF per year that must be released from the Upper Basin to the Lower Basin and Mexico pursuant to Reclamation requirements. This imbalance between Lower Basin inflows and use, known as the structural deficit , causes additional stress on basin storage. The current drought in the basin has included some of the lowest flows on record. According to Reclamation, the 19-year period from 2000 to 2018 was the driest period in more than 100 years of record keeping. Observers have pointed out that flows in some recent years have been lower than would be expected given the amount of precipitation that has occurred, and have noted that warmer temperatures appear to be a significant contributor to these diminished flows. Based on these and other observations, some have argued that Colorado River flows are unlikely to return to 20 th century averages, and that future water supply risk is high. A 2012 study by Reclamation projected a long-term imbalance in supply and demand in the Colorado River Basin. In the study, Reclamation noted that the basin had thus far avoided serious impacts on water supplies due to the significant storage within the system, coupled with the fact that some Upper Basin states have yet to fully develop the use of their allocations. However, Reclamation projected that in the coming half century, flows would decrease by an average of 9% at Lee Ferry and drought would increase in frequency and duration. At the same time, Reclamation projected that demand for basin water supplies would increase, with annual consumptive use projected to rise from 15 MAF to 18.1-20.4 MAF by 2050, depending on population growth. A range of 64%-76% of the growth in demand was expected to come from increased M&I demand. Reclamation's 2012 study also posited several potential ways to alleviate future shortages in the basin, such as alternative water supplies, demand management, drought action plans, water banking, and water transfer/markets. Some of these options already are being pursued. In particular, some states have become increasingly active in banking unused Colorado River surface water supplies, including through groundwater banks or storage of unused surface waters in Lake Mead (see below section, " 2007 Interim Guidelines "). Drought conditions throughout the basin have raised concerns about potential negative impacts on water supplies. Concerns center on uncertainty that might result if the Secretary of the Interior were to determine that a shortage condition exists in the Lower Basin, and that related curtailments were warranted. Some in Upper Basin States are also concerned about the potential for a c ompact call of Lower Basin states on Upper Basin states. Drought and other uncertainties related to water rights priorities (e.g., potential tribal water rights claims) spurred the development of several efforts that generally attempted to relieve pressure on basin water supplies, stabilize storage levels, and provide assurances of available water supplies. Some of the most prominent developments since the year 2000 (i.e., the beginning of the current drought) are discussed below. Prior to the 2003 QSA, California had been using approximately 5.2 MAF of Colorado River on average each year (with most of its excess water use attributed to urban areas). Under the QSA, an agreement between several California water districts and DOI, California agreed to reduce its use to the required 4.4 MAF under the Law of the River. It sought to accomplish this aim by quantifying Colorado River entitlement levels of several water contractors; authorizing efforts to conserve additional water supplies (e.g., the lining of the All-American Canal); and providing for several large-scale, long-term agriculture-to-urban water transfers. The QSA also committed the state to a path for restoration and mitigation related to the Salton Sea, a water body in Southern California that was historically sustained by Colorado River irrigation runoff from the Imperial and Coachella Valleys. A related agreement between Reclamation and the Lower Basin states, the Inadvertent Overrun and Payback Policy (IOPP), went into effect concurrently with the QSA in 2004. IOPP is an administrative mechanism that provides an accounting of inadvertent overruns in consumptive use compared to the annual entitlements of water users in the Lower Basin. These overruns must be "paid back" in the calendar year following the overruns, and the paybacks must be made only from "extraordinary conservation measures" above and beyond normal consumptive use. The 2004 Arizona Water Settlements Act ( P.L. 108-451 , AWSA) significantly altered the allocation of CAP water in Arizona and set the stage for some of the cutbacks in the state that are currently under discussion. It ratified three water rights settlements (one in each title) between the federal government and the State of Arizona, the Gila River Indian Community (GRIC), and the Tohono O'odham Nation, respectively. For the state and its CAP water users, the settlement resolved a final repayment cost for CAP by reducing the water users' reimbursable repayment obligation from about $2.3 billion to $1.65 billion. Additionally, Arizona agreed to new tribal and non-tribal allocations of CAP water so that approximately half of CAP's annual allotment would be available to Indian tribes in Arizona, at a higher priority than most other uses. The tribal communities were authorized to lease the water so long as the water remains within the state via the state's water banking authority. The act also authorized funds to cover the cost of infrastructure required to deliver the water to the Indian communities, much of it derived from power receipts accruing to the Lower Colorado River Basin Development Fund. Another significant development in the basin was the 2007 adoption of the Colorado River Interim Guidelines for Lower Basin Shortages and the Coordinated Operations for Lake Powell and Lake Mead (2007 Interim Guidelines). Development of the agreement began in 2005, when, in response to drought in the Southwest and the decline in basin water storage (and a record low point in Lake Powell of 33% active capacity), the Secretary of the Interior instructed Reclamation to develop coordinated strategies for Colorado River reservoir operations during drought or shortages. The resulting guidelines included criteria for releases from Lakes Mead and Powell determined by "trigger levels" in both reservoirs, as well as a schedule of Lower Basin curtailments at different operational tiers ( Table 2 ). Under the guidelines, Arizona and Nevada, which have junior rights to California, would face reduced allocations if Lake Mead elevations dropped below 1,075 ft. At the time, it was thought that the 2007 Guidelines would significantly reduce the risk of Lake Mead falling to 1,025 feet. The guidelines are considered "interim" because they were scheduled to expire in 20 years (i.e., at the end of 2026). The 2007 agreement also included for the first time a mechanism by which parties in the Lower Basin were able to store conserved water in Lake Mead, known as Intentionally Created Surplus (ICS). Reclamation accounts for this water annually, and the users storing the water may access the surplus in future years, in accordance with the Law of the River. From 2013 to 2017, the portion of Lake Mead water in storage that was classified as ICS ranged from a low of 711,864 AF in 2015 to a high of 1.261 MAF in 2017 ( Figure 4 ). In 2014, Reclamation and several major basin water supply agencies (Central Arizona Water Conservation District, Southern Nevada Water Authority, Metropolitan Water District of Southern California, and Denver Water) executed a memorandum of understanding to provide funding for voluntary conservation projects and reductions of water use. These activities had the goal of developing new system water , to be applied toward storage in Lake Mead, by the end of 2019. Congress formally authorized federal participation in these efforts in the Energy and Water Development and Related Agencies Appropriations Act, 2015 ( P.L. 113-235 , Division D ), with an initial sunset date for the authority at the end of FY2018. The Energy and Water Development and Related Agencies Appropriations Act, 2019 ( P.L. 115-244 , Division A ) extended the authority through the end of FY2022, with the stipulation that Upper Basin agreements could not proceed without the participation of the Upper Basin states through the Upper Colorado River Commission. As of mid-2018, Reclamation estimated that the program had resulted in a total of 194,000 AF of system water conserved. These savings were carried out through 64 projects conserving 47,000 AF in the Upper Basin and 11 projects conserving 147,000 AF in the Lower Basin. In 2017, the United States and Mexico signed Minute 323, which extended and replaced elements of a previous agreement, Minute 319, signed in 2012. Minute 323 included, among other things, options for Mexico to hold water in reserve in U.S. reservoirs for emergencies and water conservation efforts, as well as U.S. commitments for flows to support the ecological health of the Colorado River Delta. It also extended initial Mexican cutback commitments made under Minute 319 (which were similar in structure to the 2007 cutbacks negotiated for Lower Basin states) and established a Binational Water Scarcity Contingency Plan that included additional cutbacks that would be triggered if drought contingency plans (DCPs) are approved by U.S. basin states (see following section, " 2019 Drought Contingency Plans "). Ongoing drought conditions and the potential for water supply shortages prompted discussions and negotiations focused on how to conserve additional basin water supplies. After several years of negotiations, on March 19, 2019, Reclamation and the Colorado River Basin states finalized DCPs for both the Upper Basin and the Lower Basin. These plans required final authorization by Congress to be implemented. Following House and Senate hearings on the DCPs in early April, on April 16, 2019, Congress authorized the DCP agreements in the Colorado River Drought Contingency Plan Authorization Act ( P.L. 116-14 ). Each of the basin-level DCPs is discussed below in more detail. The Upper Basin DCP aims to protect against Lake Powell reaching critically low elevations; it also authorizes storage of conserved water in the Upper Basin that could help establish the foundation for a water use reduction effort (i.e., a "Demand Management Program") that may be developed in the future. Under the Upper Basin DCP, the Upper Basin states agree to operate system units to keep the surface of Lake Powell above 3,525 ft, which is 35 ft above the minimum elevation needed to run the dam's hydroelectric plant. Other large Upper Basin reservoirs (e.g., Navajo Reservoir, Blue Mesa Reservoir, and Flaming Gorge Reservoir) would be operated to protect the targeted Lake Powell elevation, potentially through drawdown of their own storage. If established by the states, an Upper Basin DCP Demand Management Program would likely entail willing seller/buyer agreements allowing for temporary paid reductions in water use that would provide for more storage volume in Lake Powell. Reclamation and other observers have stated their belief that these efforts will significantly decrease the risk of Lake Powell's elevation falling below 3,490 ft, an elevation at which significantly reduced hydropower generation is possible. The Lower Basin DCP is designed to require Arizona, California, and Nevada to curtail use and thereby contribute additional water to Lake Mead storage at predetermined "trigger" elevations, while also creating additional flexibility to incentivize voluntary conservation of water to be stored in Lake Mead, thereby increasing lake levels. Under the DCP, Nevada and Arizona (which were already set to have their supplies curtailed beginning at 1,075 ft under the 2007 Interim Guidelines) are to contribute additional supplies to maintain higher lake levels (i.e., beyond previous commitments). The reductions of supply would reach their maximums when reservoir levels drop below 1,045 ft. At the same time, the Lower Basin DCP would, for the first time, include commitments for delivery cutbacks by California. These cutbacks would begin with 200,000 AF (4.5%) in reductions at Lake Mead elevations of 1,040-1,045 ft, and would increase to as much as 350,000 AF (7.9%) at elevations of 1,025 ft or lower. The curtailments in the Lower Basin DCP are in addition to those agreed to under the 2007 Interim Guidelines and under Minute 323 with Mexico. Specific and cumulative reductions are shown in Table 2 . In addition to the state-level reductions, under the Lower Basin DCP, Reclamation also would agree to pursue efforts to add 100,000 AF or more of system water within the basin. Some of the largest and most controversial reductions under the Lower Basin DCP would occur in Arizona, where pursuant to previous changes under the 2004 AWSA, a large group of agricultural users would face major cutbacks to their CAP water supplies. Reclamation has noted that the Lower Basin DCP significantly decreases the chance of Lake Mead elevations falling below 1,020 ft, which would be a critically low level. Some parties have pointed out that although the DCP is unlikely to prevent a shortage from being declared at 1,075 ft, it would slow the rate at which the lake recedes thereafter. Combined with the commitments from Mexico, total planned cutbacks under shortage scenarios (i.e., all commitments to date, combined) would reduce Lower Basin consumptive use by 241,000 AF to 1.375 MAF per year, depending on Lake Mead's elevation. Although the DCPs and the related negotiations were widely praised, some expressed concerns related to the implementation of the DCPs as they relate to federal and state environmental laws. Most Colorado River contractors supported the agreements, but one major basin contractor, Imperial Irrigation District (IID, a major holder of Colorado River water rights in Southern California), did not approve the DCPs. IID has argued that the DCPs will further degrade the Salton Sea, a shrinking and ecologically degraded water body in southern California that relies on drainage flows from lands irrigated using Colorado River water. Following enactment of the DCPs, IID filed suit in state court alleging that state approval of the DCPs violated the California Environmental Quality Act. Others have questioned whether federal implementation of the DCPs without a new or supplemental Environmental Impact Statement might violate federal law, such as NEPA. The principal role of Congress as it relates to storage facilities on the Colorado River is funding and oversight of facility operations, construction, and programs to protect and restore endangered species (e.g., Glen Canyon Dam Adaptive Management Program and the Upper Colorado River Endangered Fish Program). In the Upper Basin, Colorado River facilities include the 17 active participating units in the Colorado River Storage Projects, as well as the Navajo-Gallup Water Supply Project. In the Lower Basin, major facilities include the Salt River Project and Theodore Roosevelt Dam, Hoover Dam and All-American Canal, Yuma and Gila Projects, Parker-Davis Project, Central Arizona Project, and Robert B. Griffith Project (now Southern Nevada Water System). Congressional appropriations in support of Colorado River projects and programs typically account for a portion of overall project budgets. For example, the Lower Colorado Region's FY2017 operating budget was $517 million; $119.8 million of this total was provided by discretionary appropriations, and the remainder of funding came from power revenues (which are made available without further appropriation) and nonfederal partners. In recent years, Congress has also authorized and appropriated funding that has targeted the Colorado River Basin in general (i.e., the Pilot System Conservation Plan). Congress may choose to extend or amend these and other authorities specific to the basin. While discretionary appropriations for the Colorado River are of regular interest to Congress, Congress may also be asked to weigh in on Colorado River funding that is not subject to regular appropriations. For instance, in the coming years, the Lower Colorado River Basin Development Fund is projected to face a decrease in revenues and may thus have less funding available for congressionally established funding priorities for the Development Fund. Congress has previously approved Indian water rights settlements associated with more than 2 MAF of tribal diversion rights on the Colorado River. Only a portion of this water has been developed. Congress likely will face the decision of whether to fund development of previously authorized infrastructure associated with Indian water rights settlements in the Colorado River Basin. For example, the ongoing Navajo-Gallup Water Supply Project is being built to serve the Jicarilla Apache Nation, the Navajo Nation, and the City of Gallup, New Mexico. Congress may also be asked to consider new settlements that may result in tribal rights to more Colorado River water. For example, in the 116 th Congress, H.R. 244 would authorize the Navajo Nation Water Settlement in Utah. In addition to development of new tribal water supplies, some states in the Upper Basin have indicated their intent to further develop their Colorado River water entitlements. For example, in the 115 th Congress, Section 4310 of America's Water Infrastructure Act ( P.L. 115-270 ) authorized the Secretary of the Interior to enter into an agreement with the State of Wyoming whereby the state would fund a project to add erosion control to Fontenelle Reservoir in the Upper Basin. The project would allow the state to potentially utilize an additional 80,000 acre-feet of water storage on the Green River, a tributary of the Colorado River. Congress may remain interested in implementation of the DCPs, including their success or failure at stemming further Colorado River cutbacks and the extent to which the plans comply with federal environmental laws such as NEPA. Similarly, Congress may be interested in the overall hydrologic status of the Colorado River Basin, as well as future efforts to plan for increased demand in the basin and stretch limited basin water supplies.
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The Colorado River Basin covers more than 246,000 square miles in seven U.S. states (Wyoming, Colorado, Utah, New Mexico, Arizona, Nevada, and California) and Mexico. Pursuant to federal law, the Bureau of Reclamation (part of the Department of the Interior) manages much of the basin's water supplies. Colorado River water is used primarily for agricultural irrigation and municipal and industrial (M&I) uses, but it also is important for power production, fish and wildlife, and recreational uses. In recent years, consumptive uses of Colorado River water have exceeded natural flows. This causes an imbalance in the basin's available supplies and competing demands. A drought in the basin dating to 2000 has raised the prospect of water delivery curtailments and decreased hydropower production, among other things. In the future, observers expect that increasing demand for supplies, coupled with the effects of climate change, will further increase the strain on the basin's limited water supplies. River Management The Law of the River is the commonly used shorthand for the multiple laws, court decisions, and other documents governing Colorado River operations. The foundational document of the Law of the River is the Colorado River Compact of 1922. Pursuant to the compact, the basin states established a framework to apportion the water supplies between the Upper and Lower Basins of the Colorado River, with the dividing line between the two basins at Lee Ferry, AZ (near the Utah border). The Upper and Lower Basins each were allocated 7.5 million acre-feet (MAF) annually under the Colorado River Compact; an additional 1.5 MAF in annual flows was made available to Mexico under a 1944 treaty. Future agreements and court decisions addressed numerous other issues (including intrastate allocations of flows), and subsequent federal legislation provided authority and funding for federal facilities that allowed users to develop their allocations. A Supreme Court ruling also confirmed that Congress designated the Secretary of the Interior as the water master for the Lower Basin, a role in which the federal government manages the delivery of all water below Hoover Dam. Reclamation and basin stakeholders closely track the status of two large reservoirs—Lake Powell in the Upper Basin and Lake Mead in the Lower Basin—as an indicator of basin storage conditions. Under recent guidelines, dam releases from these facilities are tied to specific water storage levels. For Lake Mead, the first tier of "shortage," under which Arizona's and Nevada's allocations would be decreased, would be triggered if Lake Mead's January 1 elevation is expected to fall below 1,075 feet above mean sea level. As of early 2019, Reclamation projected that there was a 69% chance of a shortage condition at Lake Mead in 2020; there was also a lesser chance of Lake Powell reaching critically low levels. Improved hydrology in early 2019 may decrease the chances of shortage in the immediate future. Drought Contingency Plans Despite previous efforts to alleviate future shortages, the basin's hydrological outlook has generally worsened in recent years. After several years of negotiations, in early 2019 Reclamation and the basin states transmitted to Congress additional plans to alleviate stress on basin water supplies. These plans, known as the drought contingency plans (DCPs) for the Upper and Lower Basins, were authorized by Congress in April 2019 in the Colorado River Drought Contingency Plan Authorization Act (P.L. 116-14). The DCPs among other things obligate Lower Basin states to additional water supply cutbacks at specified storage levels (i.e., cutbacks beyond previous curtailment plans), commit Reclamation to additional water conservation efforts, and coordinate Upper Basin operations to protect Lake Powell storage levels and hydropower generation. Congressional Role Congress plays a multifaceted role in federal management of the Colorado River basin. Congress funds and oversees management of basin facilities, including operations and programs to protect and restore endangered species. It has also enacted and continues to consider Indian water rights settlements involving Colorado River waters and development of new water storage facilities in the basin. In addition, Congress has approved funding to mitigate water shortages and conserve basin water supplies and has enacted new authorities to combat drought and its effects on basin water users (i.e., the DCPs and other related efforts).
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Congress has long deliberated on drinking water quality and infrastructure, which have been brought to the forefront of national attention by several events. Such events include the detection of elevated lead levels in tap water in Flint, MI, and other cities; hurricanes and other natural disasters that damaged or destroyed community drinking water infrastructure; and local source water contamination events (e.g., chemical spills and algal blooms). Representatives of state drinking water agencies, private sector engineers, and others report that much of the nation's drinking water infrastructure is deteriorating, threatening public health, and increasing operations and maintenance costs. In 2012, the American Water Works Association (AWWA) reported that much of the drinking water infrastructure (more than 1 million miles of buried pipe) was constructed in the 19 th and 20 th centuries and is nearing the end of its useful life. While disagreement exists over the scope and costs of improvement and replacements, estimates of the funding needs are substantial. In March 2018, the U.S. Environmental Protection Agency (EPA) issued its sixth Drinking Water Infrastructure Needs Survey and Assessment. In this survey, EPA estimated that public water systems would need to invest $472.60 billion for drinking water capital improvements over the next 20 years to achieve compliance and ensure the provision of safe drinking water. Although all projects identified in the needs survey would promote health objectives, EPA reported that 12% of the 20-year estimated need was directly attributed to statutory compliance. The majority (88%) of needs are for ongoing investments, such as repair of aging drinking water infrastructure. In 2012, AWWA conducted a broader drinking water infrastructure survey that reported that the costs to replace aging drinking water infrastructure and expand water service to growing populations will increase to more than $1 trillion over the next 25 years. Communities nationwide may face financial challenges as they manage the need to repair or replace aging drinking water infrastructure. As of early 2019, EPA's database indicated that some 50,000 public water systems in the United States regularly serve 25 or more of the same individuals. About 80% of these community water systems are relatively small, serving 3,300 or fewer people. These small systems have a narrow rate base from which to finance drinking water infrastructure improvements. In addition, older cities may face declining populations and declining utility revenues from which utilities can finance drinking water infrastructure repairs. In 2012, AWWA estimated that the costs to address aging drinking water infrastructure may as much as triple household water bills. Due to these financing concerns, communities may be challenged to protect water supplies, respond to contamination incidents, and afford projects to repair or replace aging drinking water infrastructure. Congress deliberated on several of these drinking water infrastructure issues while developing America's Water Infrastructure Act of 2018 (AWIA; P.L. 115-270 ), enacted on October 23, 2018. Title I of the act, "The Water Resource Development Act of 2018," authorizes a wide variety of water resource and infrastructure policies, programs, and projects for the U.S. Army Corps of Engineers (USACE). Water Resource Development Act bills are often considered on a biennial schedule and have primarily addressed USACE projects. Title III of AWIA primarily addresses hydropower activities of the Federal Energy Regulatory Commission. Title II and IV of the act include provisions that address EPA water infrastructure programs and other authorities. This report analyzes the drinking water provisions of Title II and IV rather than providing a comprehensive summary of AWIA. Title II constitutes the most comprehensive reauthorization of the Safe Drinking Water Act (SDWA) since 1996. It amends SDWA to promote compliance with SDWA requirements, reauthorize appropriations for the Drinking Water State Revolving Fund (DWSRF) program, expand program eligibilities, increase emphasis on assisting disadvantaged communities, make SDWA compliance more affordable, and improve consumer confidence in public water supplies. Title II also authorizes new grant programs to reduce lead contamination in school drinking water, assist small and disadvantaged communities, and develop public water system resilience, among other purposes. Title IV addresses several other water quality and infrastructure issues by authorizing and revising activities and programs for EPA, the Bureau of Reclamation within the Department of the Interior, and other federal agencies. Title IV of AWIA extends, authorizes, and amends drinking-water-related activities and provisions administered by EPA. Specifically, these provisions authorize a water efficiency program and activities and revise the Water Infrastructure Finance Innovation Act (WIFIA) program, which provides credit assistance for water infrastructure projects. Title IV of AWIA also includes several amendments to the Clean Water Act to address stormwater by expanding a municipal sewer overflow grant programs to include stormwater management projects, reauthorizing appropriations for said municipal sewer overflow grant program, and directing EPA to establish a task force for stormwater management. The first section of this report provides select legislative background on AWIA. The second section describes the reauthorizations, revisions, and additions to SDWA. The third section discusses a provision in AWIA that addresses requirements that apply to federal financial assistance for drinking water improvements. The fourth section describes a provision in AWIA that addresses assistance for drinking water repairs in disaster areas. The fifth section includes the revisions in AWIA to federal water infrastructure financial assistance programs. The final section provides a discussion of the provisions of AWIA that address water efficiency. In addition, the appendices contain tables of plans, reports, and regulations required by AWIA; cross-references of the AWIA provisions, provisions in SDWA, and the U.S. Code citations; and summaries of the other EPA-related provisions of AWIA that are not discussed in this report, such as the stormwater provisions in Title IV. Drinking water infrastructure and related topics received congressional attention during the 115 th Congress. AWIA combines provisions from several bills that the 115 th Congress considered. Numerous bills were introduced to amend SDWA to address drinking water regulation and infrastructures issues, with particular focus on the technical, managerial, and financial challenges facing small and disadvantaged communities. AWIA Title II, entitled Drinking Water System Improvement, broadly parallels the Drinking Water System Improvement Act of 2017 ( H.R. 3387 ; H.Rept. 115-380 ). This SDWA reauthorization bill would have authorized activities and revised existing law to improve water systems' technical, managerial, financial capacity, and consumer confidence and facilitate communities' access to financial assistance for drinking water infrastructure improvements. In addition, this bill would have reauthorized appropriations for a key drinking water infrastructure financial assistance program and revised that program to help communities access assistance. Congress also considered the USACE-focused Water Resources Development Act of 2018 ( H.R. 8 ) in the House and, in the Senate, America's Water Infrastructure Act ( S. 2800 ), a broader water resources infrastructure bill that included revisions to water infrastructure programs administered by EPA. Both bills contained provisions that would have authorized USACE projects and studies for water resource development, including flood control, navigation improvements, and aquatic ecosystem restoration activities. The House incorporated selected provisions of H.R. 3387 , H.R. 8 , and S. 2800 into S. 3021 . S. 3021 , as amended and renamed, passed the House on September 13, 2018. The Senate agreed to the House amendments to S. 3021 and passed the bill on October 10, 2018. The President signed the bill on October 23, 2018, and it became P.L. 115-270 . Table 1 identifies the amounts authorized to be appropriated in the drinking-water-related provisions of AWIA. For a summary of deadlines for reports, regulations, and other activities related to drinking water as provided for in AWIA, see Appendix A . Several provisions of AWIA Title II, "Drinking Water System Improvement," amend SDWA to revise existing drinking water programs, reauthorize appropriations, and establish new drinking water infrastructure grant programs. SDWA authorizes the regulation of contaminants in public water systems. Enacted in 1974, the act was last broadly amended in 1996. The act is implemented through programs that (1) establish national primary drinking water regulations and monitoring and reporting requirements for contaminants present in water delivered by public water systems, (2) promote water system compliance through technical and financial assistance and capacity development programs, and (3) address public water systems' preparedness for emergencies. The act established a federal-state partnership in which states, tribes, and territories may be delegated primary implementation and enforcement authority (i.e., primacy) for the drinking water program. One key component of SDWA is the requirement that EPA establish national primary drinking water regulations for contaminants that may adversely affect human health and are likely to be present in public water supplies. EPA has issued regulations for more than 90 contaminants. These include numerical standards or treatment techniques for drinking water disinfectants and their byproducts, microorganisms, radionuclides, organic chemicals, and inorganic chemicals. The SDWA Amendments of 1996 ( P.L. 104-182 ) reauthorized appropriations for most SDWA programs through FY2003. Although the authority has expired for most appropriations, Congress has continued to appropriate funds for the ongoing SDWA programs. Even though the authorization of appropriations may expire, program authority (i.e., an agency's "enabling" authority) does not expire unless there is a "sunset" date for that authority or if Congress repeals it through subsequent laws. Authorized in 1996, the DWSRF program provides federal financial assistance to communities to finance drinking water infrastructure improvements. SDWA Section 1452 authorizes EPA to make annual grants to states to capitalize their state revolving loan fund. The statute requires states to provide a 20% match. States may use DWSRF financing for public water system projects needed to comply with federal drinking water standards and address risks to human health. The primary type of DWSRF financial assistance are low interest rate loans. SDWA Section 1452 authorizes states to provide additional subsidization (including forgiveness of principal) to disadvantaged communities. The federal capitalization grants together with state funds (e.g., state match, loan repayments, leveraged bonds, and other state sources) are intended to build a sustainable source of drinking water infrastructure funding for the state. The authorization of appropriation for DWSRF expired in FY2003. Congress has continued to provide funds for the DWSRF program through annual appropriations. From FY1997 through FY2018, Congress appropriated over $23.33 billion for the DWSRF program. The appropriation for DWSRF program generally ranged between $820.0 million in FY2000 and $1.39 billion in FY2010. Table 2 includes historical appropriations for the DWSRF program. AWIA makes the most substantial revisions to the DWSRF provisions of SDWA since the program was authorized in 1996. These revisions expand the eligible uses of DWSRF financial assistance, provide states with additional flexibility to administer the DWSRF program, and include provisions intended to make DWSRF assistance more accessible to public water systems. AWIA Section 2015(a) amends SDWA to expressly state that DWSRF funds can be used for projects to replace or rehabilitate aging treatment, storage, or distribution systems. Under EPA guidance, these replacement and rehabilitation projects have been eligible for financial assistance from the DWSRF if needed to protect public health. According to EPA's needs survey, this category of projects accounts for 66.1% of the estimated drinking water infrastructure need. Prior to AWIA, these activities were not previously explicitly identified in statute. Section 2015 also revises existing DWSRF provisions that address financial assistance for disadvantaged communities. These amendments increase the portion of a state's capitalization grant that states may dedicate to additional subsidization and extend the amortization period for loans made to disadvantaged communities. Before AWIA, states could use 30% of their annual capitalization grants to subsidize loans for disadvantaged communities. Section 2015(c) of AWIA increases that proportion to 35% while conditionally requiring states to use at least 6% of their capitalization grant for these subsidies. The section also amends the SDWA DWSRF provisions to extend the amortization period for loans made to disadvantaged communities from 30 to 40 years. Section 2015(d) of AWIA also extends the repayment and amortization period for all projects financed by the DWSRF. Previously, SDWA required DWSRF financing recipients to pay the initial principal and interest payments within one year of project completion. This amendment extends the date of that initial payment to 18 months after project completion. This section also authorizes the extension of the amortization period for projects that receive DWSRF assistance from 20 to 30 years. Section 2015(e) requires EPA to evaluate and include the cost to replace lead service lines in the drinking water infrastructure needs survey, which EPA completes every four years. EPA uses the needs survey to allot the DWSRF appropriation among the states. In conducting the needs survey, EPA has not previously requested that public water systems report the cost to replace these lines. AWIA specifies that the cost to replace lead lines must be included in the needs survey (to the extent practicable), which may potentially affect some states' allotments of DWSRF capitalization grants. Section 2015(g) of AWIA requires EPA to gather specified information on DWSRF administration from state drinking water administrators and report to Congress on best practices for implementing the DWSRF to facilitate the application process and to improve DWSRF financial management and sustainability. In 1996, Congress added source water assessment provisions to SDWA to encourage protection of drinking water sources. Section 1453 required states to develop source water assessment programs that delineate areas from which public water systems receive water and identify the origins of regulated contaminants to determine threats to water systems. States were authorized to fund these activities from 10% of their DWSRF capitalization grant for FY1996 and FY1997. Section 2015(f) of AWIA removes this fiscal year limitation and accordingly authorizes states to use a portion of their capitalization grant to fund these source water assessments or update an existing source water assessment. The 1996 SDWA amendments required states to conduct source water assessments as a condition of adopting modified monitoring requirements. However, the 1996 amendments did not authorize states to fund implementation of source water protection plans from their DWSRF capitalization grants. AWIA Section 2002 authorizes states to fund implementation of surface drinking water sources protection efforts and activities from the 10% set-aside of a state's annual DWSRF capitalization grant. Source water protection is also addressed in the " Protecting Source Water " section of this report. Recipients of DWSRF financial assistance must comply with cross-cutting requirements, which are other federal laws or executive orders that apply to certain federal financial assistance programs. Examples of federal cross-cutting requirements include environmental laws such as the National Environmental Policy Act and Endangered Species Act, executive orders on equal employment opportunities, and the National Historic Preservation Act. AWIA specifies two such requirements for DWSRF-financed projects: the use of American iron and steel and compliance with Davis-Bacon prevailing wage law. Section 2022 of AWIA renews the requirement to use American iron and steel products in DWSRF-financed projects for FY2019-FY2023. Previously, Congress has required American iron and steel for DWSRF-financed projects for specified fiscal years. The Water Infrastructure Innovation for the Nation (WIIN) Act ( P.L. 114-322 ) amended SDWA to require the use of American iron and steel for FY2017. In the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ), Congress provided supplemental appropriations for the DWSRF and first required the use of "Buy American" iron and steel in projects financed from that supplemental appropriation. Since FY2014, Congress has regularly required the use of American iron and steel for DWSRF-financed projects through appropriations acts. AWIA Section 2015(b) amends SDWA to add Davis-Bacon prevailing wage requirements for projects that receive DWSRF assistance. Since 2009, Congress has often applied Davis-Bacon prevailing wage requirements to funds for DWSRF-financed projects through annual appropriations acts. AWIA Section 2023 amends SDWA to reauthorize DWSRF capitalization grants for FY2019-FY2021. The authorization of appropriations for the DWSRF are approximately $1.17 billion in FY2019, $1.30 billion in FY2020, and $1.95 billion in FY2021. Appropriations for the DWSRF capitalization grants were $863.2 million for each of FY2016 and FY2017 and $1.16 billion for FY2018. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), included $1.16 billion for DWSRF capitalization grants in FY2019. For a summary of historical DWSRF appropriation levels, see Table 2 . AWIA addresses several drinking water infrastructure issues by revising an existing grant program and authorizing additional grant programs. These grant programs are intended to (1) reduce lead in school drinking water, (2) support state responses to contamination or threats of contamination of drinking water supplies that may pose substantial endangerment to underserved communities, (3) assist disadvantaged communities in improving drinking water infrastructure resilience to natural hazards, and (4) improve drinking water systems serving Indian tribes in specified areas. Section 2006 of AWIA revises an existing grant program to address the sources of lead contamination in drinking water at schools. The 2016 WIIN Act repealed and replaced SDWA Section 1464(d) to direct EPA to establish the Voluntary School and Child Care Program Lead Testing Grant Program. This grant program provides funds to test for lead in drinking water at schools and child care programs through local education agencies (LEAs). The WIIN act authorized annual appropriations of $20.0 million for FY2017 through FY2021 for this grant program. The 115 th Congress appropriated $20.0 million for this grant program for FY2018 in the Consolidated Appropriations Act, 2018 (Section 430 of Title IV of P.L. 115-141 ). Section 2006(a) of AWIA authorizes a $5.0 million increase (from $20.0 million to $25.0 million) in the amount authorized to be appropriated for the existing Voluntary School and Child Care Program Lead Testing Grant Program in FY2020 and FY2021. The Consolidated Appropriations Act, 2019, included a FY2019 appropriation of $25 million to support this grant program. Section 2006 also amends SDWA Section 1464(d) and directs EPA to give grant priority to LEAs in low-income areas. This provision requires EPA to provide technical assistance to lead testing grant recipients. The technical assistance may help identify opportunities to remediate lead contamination if found during the lead testing. Specifically, Section 2006(a) states that the technical assistance may include identification of (1) the source of lead contamination at the school or child care program, (2) state and federal grant programs to eliminate the source of lead contamination, (3) financing options for eliminating the source of lead contamination, and (4) nonprofit and other organizations to help the grantee eliminate the source of lead contamination. Section 2006(b) of AWIA establishes the Drinking Water Fountain Replacement for Schools program. This section requires EPA to implement a drinking water fountain replacement grant program for water fountains manufactured prior to 1988. EPA must prioritize grants based on LEAs' economic needs. This section authorizes the annual appropriation of $5.0 million for this grant program for FY2019-FY2021. AWIA Section 2005 amends SDWA Section 1459A to authorize EPA to establish the Drinking Water System Infrastructure Resilience and Sustainability Program, which is a new grant program for small and disadvantaged public water systems. This section authorizes EPA to award grant funds to eligible public water systems for projects that increase resilience to natural hazards, including hydrologic changes. Eligible projects include those that increase water use efficiency, enhance water supply through watershed management or desalination, and increase energy efficiency in the conveyance or treatment of drinking water. This section authorizes appropriations of $4.0 million for each of FY2019 and FY2020 for this program. Section 2005 also revises SDWA Section 1459A to add an EPA-administered grant program to help states assist underserved communities to respond to imminent and substantial contamination. This section authorizes EPA to make grants to requesting states to assist communities when contaminants are present in and pose an imminent and substantial threat to their public water system or underground drinking water sources and when EPA or a court of competent jurisdiction determines that the appropriate authorities have not responded in a sufficient manner. This section also authorizes EPA to recover funds from grant recipients who are found to have caused or contributed to the contamination addressed by the grant program. SDWA Section 1459A authorizes appropriations of $60.0 million to support this and other grant programs for small and disadvantaged communities authorized therein. Section 2001 of AWIA authorizes a new grant program at EPA for public water systems that serve federally recognized Indian tribes. Section 2001 directs EPA—subject to appropriations—to establish a drinking water infrastructure grant program for 20 eligible projects (10 projects in the Upper Missouri River Basin and 10 projects in the Upper Rio Grande River Basin) to improve water quality, water pressure, or water services. One of the 10 projects in the Upper Missouri River Basin must serve two or more tribes. To be eligible, the public water system must either be on a reservation or serve a federally recognized Indian tribe. Section 2001 authorizes an appropriation $20.0 million annually from FY2019 to FY2022 to support this program. SDWA authorizes EPA to make grants to primacy states and territories to implement the public water system supervision program (PWSS). Although the authorization of appropriation for PWSS grants expired in FY2003, Congress has continued to appropriate funds for this program. While the appropriation amount has changed over time, since FY2014, Congress appropriated about $101 million annually for grants to states to support the PWSS program. States also use set-asides from the DWSRF capitalization grants and other state resources (e.g., state general funds and/or state-established fee programs) to support the PWSS program. In 2013, state drinking water administrators estimated that the states would require an additional $308.0 million per year to support the PWSS program. They attribute this funding gap to increased workload for water system supervision for an increased number of regulated contaminants. Section 2014 of AWIA reauthorizes appropriations for the PWSS program for FY2020 and FY2021, increasing the authorized appropriation from $100.0 million to $125.0 million for these two fiscal years. Several provisions of AWIA amend SDWA to address consumer access to compliance data and the transparency of drinking water quality information. These provisions seek to increase the understandability of drinking water quality information provided to consumers, notify consumers more frequently about their drinking water quality, and expand existing monitoring requirements to gather additional data on occurrence of unregulated contaminants. Prior to AWIA, SDWA required public water systems to provide their customers with an annual consumer confidence report on their drinking water quality and SDWA compliance. Section 1414(c) of SDWA required public water system operators in the consumer confidence reports to include the level of regulated contaminants and their associated maximum contaminant level or action level. Section 2008 of AWIA revises the requirements for data included in the consumer confidence report. AWIA directs public water system operators to also report exceedances resulting in a treatment technique, other occurrences that required corrective action, corrosion control efforts, and any violations of SDWA that occurred during the monitoring period. The collection of this additional information expands the information captured in the consumer confidence report to include lead exceedances and associated lead treatment techniques. AWIA Section 2008 also increases the frequency that operators of large public water systems (serving more than 10,000 consumers) produce and distribute consumer confidence reports from annually to biannually. This section also expressly authorizes public water system operators to transmit the consumer confidence report electronically. Section 2011 of AWIA requires EPA to develop a strategic plan to improve the accuracy and availability of monitoring data shared between public water systems, the primacy states, and EPA. The strategic plan must identify barriers to (1) ensuring the accuracy of reported data, (2) submitting data electronically, and (3) retrieving reported data. The plan must also recommend economically feasible and practical ways to transmit monitoring data. The 1996 amendments authorized a monitoring program for unregulated contaminants in public water supplies. The act requires EPA, every five years, to promulgate a rule requiring certain public water systems to monitor for up to 30 unregulated contaminants. Unregulated Contaminant Monitoring Rules (UCMRs) are used to gather national occurrence data to inform EPA's review of contaminants that may warrant regulation. For example, a 2012 UCMR (UCMR 3) required systems to test their water for the presence of six poly- and perfluoroalkyl substances, including perfluorooctanoic acid and perfluorooctanesulfonic acid. Prior to enactment of AWIA, SDWA required monitoring by all large public water systems (serving more than 10,000 consumers) and a representative sample of small public water systems (serving 10,000 consumers or fewer). For the 800 small public water systems sampled in UCMR 3, EPA funded the monitoring costs. AWIA Section 2021(b) reauthorized $10.0 million to be appropriated for each year for FY2019-FY2021 for this program. The authority to appropriate funds for the unregulated contaminant monitoring program expired in FY2003, although Congress has continued to appropriate funds for the program. Section 2021(a) of AWIA expands unregulated contaminant monitoring requirements to include public water systems serving 3,300-10,000 individuals—subject to the availability of appropriations for this purpose and lab capacity. This requirement enters into effect three years after the enactment date of AWIA (i.e., October 23, 2021). This section authorizes $15.0 million to be appropriated for each year from FY2019 through FY2021 to support the expanded monitoring. Requiring monitoring by a larger number of public water systems for unregulated contaminants is intended to provide a more comprehensive assessment of the occurrence of unregulated contaminants in public water supplies. As of December 2018, EPA's database indicated that more than 5,000 public water systems serve from 3,301 to 10,000 individuals. This subset of systems serves more than 30 million individuals in total. The monitoring by these additional systems would provide more occurrence data to inform EPA's determination of whether a particular contaminant warrants a nationwide regulation. The 1996 SDWA amendments authorized programs to assist public water systems with SDWA compliance. Technical assistance, operator certification, and other programs seek to improve the technical, managerial, and financial capacity of public water systems to achieve and maintain compliance with drinking water regulations. Other provisions authorize incentives for SDWA compliance by encouraging consolidation of public water systems. AWIA authorizes new programs and revises authorities to further support and enhance public water system capacity to comply with SDWA. AWIA Section 2012 amends SDWA capacity development provisions (SDWA §1420). This provision directs states to revise their capacity development strategies to include a description of how they will encourage public water systems to develop asset management plans. Asset management is a budgetary and planning process that public water systems may undertake to evaluate their capital assets and plan the maintenance of their infrastructure (e.g., pumps, motors, and piping) to ensure that the water system can fund the costs. Some urban water utilities and other stakeholders argue that asset management can help lower the overall operation and maintenance costs, as it may lead to fewer infrastructure failure incidents (e.g., pipe ruptures). Asset management is not statutorily required. EPA has issued educational materials and provided training for water systems that choose to develop an asset management plan. EPA and the U.S. Department of Agriculture (USDA) have also provided support to assist small water utilities with asset management. This section further amends SDWA Section 1420 to require states to demonstrate their progress in encouraging public water systems to develop asset management plans. Every five years, EPA must review and update (if necessary) the asset management materials that EPA makes available. According to the House Energy and Commerce Committee Report ( H.Rept. 115-380 ), such asset management technical assistance will improve the economic sustainability of public water systems. Some public water systems may lack the technical, managerial, and financial capacity to meet regulatory standards, fund drinking water repairs or upgrades, identify or access source water, and manage budgetary constraints. Among other strategies, such systems may address these challenges by consolidating with or transferring ownership to another water system where feasible. EPA states that this type of restructuring can be effective in returning noncompliant public water systems to SDWA compliance or building technical, managerial, and financial capacity. The SDWA amendments of 1996 amended SDWA enforcement provisions to authorize limited enforcement relief as an incentive for noncompliant public water systems to consolidate with other systems. If a system faces a particular compliance violation, SDWA Section 1414(h) authorizes public water systems to submit a plan to primacy states or EPA for the physical consolidation or the consolidation of management and administrative functions with another public water system or the transfer of ownership of a public water system. If the plan to consolidate or transfer ownership is approved by a primacy state or EPA, enforcement action against that public water system for the specified violation would not be taken for two years. Section 2009 of AWIA provides that, in addition to the physical or management consolidation or transfer of ownership, a public water system may also submit a plan to execute a contractual agreement with another public water system to manage the noncompliant public water system. Section 2010 of AWIA authorizes primacy states or EPA to require, under certain circumstances, public water systems to assess options for consolidation or transfer of ownership. This section specifies that the required assessments be proportionate to the size of public water system. Therefore, a small public water system would complete an assessment that is less complex than a larger system. Any public water systems that consolidate, as a result of an assessment, are eligible for financial assistance from the DWSRF. This section also provides limited liability protection for the owner or operator who has a state-approved consolidation plan. In the consolidation plan, the owner or operator of public water system must identify any potential or existing liabilities from specific violations and their available assets. This section limits the liability of a consolidating system to the amount of its assets and to the liabilities identified in the plan. This section also requires EPA to promulgate regulations to implement these provisions. Section 2003 of AWIA defines intractable water system as a public water system serving fewer than 1,000 individuals that the owner or operator effectively abandoned for a range of reasons, including financial default, significant noncompliance with SDWA, or failure to maintain facilities. Section 2003 directs EPA, in collaboration with the USDA and the U.S. Department of Health and Human Services, to conduct a study on these systems to gather more information about intractable water systems and barriers to deliver potable water. Section 4304 of AWIA seeks to address concerns about the rate for replacing workers by establishing a water-specific workforce development competitive grant program. While estimates vary, the increasing rate of retirement among water sector employees has generated interest in water sector workforce development. A 2010 report from AWWA and the Water Research Foundation estimated that 30%-50% of water sector employees will retire over the following 10 years. Similarly, the Department of Labor's Bureau of Labor Statistics projected that annually 8.2% of water operators will need to be replaced between 2016 and 2026. In 2018, the U.S. Government Accountability Office (GAO) also concluded that EPA could take additional steps to address water sector workforce development and succession planning. Section 4304 directs EPA, in consultation with USDA, to establish the Innovative Water Infrastructure Workforce Development program. It authorizes EPA to award grants to institutions of higher education, nonprofit organizations, or labor organizations for a wide range of activities including bridge programs for water utilities, educational programs to increase public awareness of career opportunities in the water sector, and leadership development. This section authorizes appropriations of $1.0 million annually for FY2019 and FY2020 to support this grant program. As noted in the " Source Water Assessment and Protection " section of this report, AWIA makes other amendments to the DWSRF provisions related to source water. It authorizes the use of DWSRF set-asides for source water assessment and protection activities. In addition, AWIA reauthorizes appropriations to a source water program and revises certain notification requirements to better enable public water systems to know of and respond to contamination. Section 2016 of AWIA reauthorizes $5.0 million in annual appropriations for FY2020 and FY2021 to support the source water protection partnership petition program (SDWA §1454). SDWA Section 1454 authorized states to establish this program, in which public water system operators and the community members request state assistance to form a voluntary partnership to prevent source water degradation. The authorization of appropriation for this program had expired in FY2003. AWIA Section 2018 amends the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA; P.L. 99-499 ) to enhance awareness among community water system operators of a hazardous substance or an extremely hazardous substance released into the drinking water source of the water system and a broader group of hazardous chemicals stored at facilities located near their water system to help facilitate emergency preparedness in the event of a release. EPCRA Section 312 is intended to enhance emergency preparedness in an event of a chemical release. This provision requires a facility operator or owner to report hazardous chemicals present at their site in excess of certain thresholds to the State Emergency Response Commission (SERC), relevant Local Emergency Planning Committee (LEPC), and the local fire department with jurisdiction over the facility. Section 312(e) authorizes any person to request specified information about chemicals stored at a specified facility from that SERC or LEPC. Section 304 of EPCRA addresses notification when a release occurs. This provision requires a facility operator or owner to notify the SERC and the relevant LEPC of releases of a smaller subset of hazardous chemicals, specifically hazardous substances and other extremely hazardous substances. EPCRA Section 325 authorizes EPA to fine facility owners or operators if they do not comply with these emergency planning and release notification requirements, in addition to other requirements in EPCRA. Section 2018 of AWIA amends EPCRA Section 304 to require the SERC to notify the state drinking water agency of releases of hazardous substances and other extremely hazardous substances. This provision requires the state drinking water agency in turn to forward the notice to community water systems with source waters that are affected by the release. In states where EPA retains SDWA primacy, AWIA Section 2018 requires the SERC to provide notice to community water systems with source waters affected by the release of hazardous substances and extremely hazardous substances as defined by EPCRA. The EPCRA provisions added by AWIA would not change a facility owner or operator's reporting requirements, and EPCRA enforcement provisions apply only to facility owners or operators. In addition, Section 2018 amends EPCRA Section 312 to expressly authorize community water systems operators to request information on hazardous chemicals at facilities from SERC or LEPC. Access to this information existed in EPCRA prior to this amendment, but AWIA Section 2018 amends EPCRA to expressly include community water systems. AWIA Section 2013 amends SDWA to address the resilience and sustainability of water systems to both natural and intentional threats. This provision replaces SDWA Section 1433, which was added by the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 ( P.L. 107-188 ; Title IV). Prior to AWIA, SDWA Section 1433 required water systems to assess their vulnerabilities to terrorist or other intentional acts and, based on the assessment, prepare emergency response plans. The statute required public water system operators to certify their assessments by a specified deadline but did not require public water systems to update their risk assessments or emergency response plans. Extreme weather events, such as hurricanes and wildfires, may require an emergency response to repair drinking water quality and supply. Accordingly, some stakeholders have testified that drinking water systems should address the risks of weather events and other natural hazards in their assessment and planning deliberations. EPA, with water partners, has developed tools and provided training and technical assistance to water utilities to increase their resilience to extreme weather events. AWIA Section 2013 expands the risk types addressed in a public water system's assessment to include risks of natural hazards and malevolent acts. In addition, community water systems are required to evaluate the resilience of their current physical infrastructure and their management practices, including financial capacity to respond to these risks. Based on the assessment, public water systems must also develop emergency response plans that address the risks and resilience issues that systems may face. Public water systems serving 3,300 or more persons must review their assessments every five years and update them if needed. This provision requires public water systems to coordinate with the relevant LEPC when preparing or revising a risk assessment or emergency response plan. The assessments and response plans are voluntary for public water systems serving fewer than 3,300 people. These public water systems must certify their assessments and submit the certifications to EPA by deadlines specific to the communities' size. To facilitate compliance with this section, Section 2013 authorized public water systems to use technical standards developed by third-party organizations to structure the assessment and plans. Federal agencies were first authorized to use technical standards developed by third-party organizations, when appropriate, in 1995. Some argue that this alternative route to compliance may help minimize federal administrative burdens while recognizing the efforts of third-party organizations in developing assessment and planning standards. Section 2013 authorized $25.0 million to be appropriated each year for FY2020 and FY2021 for EPA to make grants to public water systems to plan or implement projects to address their system's resiliency. AWIA Section 2013 requires EPA to issue guidance and provide technical assistance on conducting assessments and preparing emergency response plans for public water systems serving fewer than 3,300 individuals. Section 2013 authorizes appropriations of $10.0 million for grants to public water systems serving fewer than 3,300 people and grants to nonprofit organizations to support these activities. Section 2017 of AWIA adds SDWA Section 1459D to require EPA to review approaches or technologies that help ensure physical integrity of drinking water systems, address contamination, develop alternative water sources, and facilitate source water protection. In conducting this review, EPA is required to evaluate equipment and technologies for their cost, efficacy, and availability. The review of technologies explicitly includes approaches related to distribution systems (e.g., leak prevention, corrosion control, metering), intelligent systems that address the distribution systems, point-of-entry or point-of-use devices, real-time contaminant monitoring, and non-traditional sources of water. This section authorizes appropriation of $10.0 million in FY2019 for this purpose. AWIA Section 2019 requires GAO to report to Congress on any duplicative or substantially similar requirements of state and local environmental law to federal cross-cutting requirements. In 2015, GAO concluded that the existing federal financing mechanisms to rehabilitate or replace aging water infrastructure are complex and that small water systems lack the technical expertise to apply for federal financial assistance. Regarding federal cross-cutting requirements, GAO reported that water systems often face duplicative state requirements when applying for financial assistance for drinking water infrastructure. Representatives of public water systems have testified that compliance with federal cross-cutting requirements is burdensome, as DWSRF projects must often comply with similar state and local requirements. Section 2020 of AWIA authorizes the appropriation of $100.0 million, available for 24 months, for grants to certain public water systems in specified disaster areas. Section 2020 of AWIA allows additional subsidization (e.g., grants, forgiveness of loan principal, negative interest rate loans, or zero-interest rate loans) for eligible public water systems regardless of whether they meet the statutory designation of disadvantaged. Section 2020(a)(3) defines eligible public water system as a water system that (1) serves an area for which the President declared a major disaster (after January 1, 2017) and provided disaster assistance or (2) is capable of extending drinking water services to underserved areas. Projects eligible for these subsidies are those that restore or increase compliance with national drinking water standards, including expanding drinking water service to underserved areas. To access this subsidization, this section requires states to submit a supplemental intended use plan with relevant information on the public water system project, the intended use of the funds, estimated cost, and projected start date. This section also exempts Puerto Rico from the 20% state-match for any funds received under this section, which is generally required by SDWA Section 1452(e). The Water Resources Reform and Development Act of 2014 ( P.L. 113-121 ) included WIFIA, which authorized both EPA and USACE to administer a five-year pilot program to help finance a broad range of water infrastructure projects. The EPA-administered WIFIA program provides credit assistance (e.g., direct loans) to eligible entities for different types of drinking water and wastewater infrastructure projects (e.g., desalination or water recharge). Eligible projects for EPA-administered assistance from WIFIA include projects that are eligible for the Clean Water State Revolving Fund (CWSRF) and the DWSRF. However unlike the DWSRF, WIFIA-financed projects generally need not be associated with SDWA compliance or public health goals. Qualifying projects for WIFIA assistance must generally cost $20.0 million or more. In an effort to encourage nonfederal and private sector financing, WIFIA assistance generally cannot exceed 49% of project costs. In FY2017, Congress appropriated $25.0 million to cover EPA's subsidy costs of WIFIA loans and $5.0 million for administrative purposes. For FY2018, Congress provided $63.0 million for the EPA-administered WIFIA program in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ). Of this amount, Congress directed $55.0 million for WIFIA projects, which EPA estimated would be leveraged into $5.50 billion of credit assistance. EPA began issuing loans in 2018. The Consolidated Appropriations Act, 2019, included $60.0 million to cover EPA's subsidy costs of WIFIA loans and $8.0 million to support program administration. These appropriations are available until expended. Section 4201 of AWIA amends WIFIA provisions to remove the pilot designation from the program, reauthorizes appropriations, and revises provisions related to program administration. Section 4201 authorizes appropriations of $50.0 million each year for FY2020 and FY2021 for EPA. This section increases the amount of appropriations that EPA can use for administrative purposes, including technical assistance for projects, from $2.2 million to $5 million. AWIA prohibits repayment of WIFIA assistance from the federal grants that fund the CWSRF and the DWSRF. Several revisions to the WIFIA program address state finance authorities' use of WIFIA financial assistance. AWIA authorizes an additional $5 million to be appropriated (under certain conditions, discussed below) for WIFIA to provide credit assistance to state finance authorities to support combined projects eligible for assistance from the CWSRF and DWSRF. When this additional appropriation is made, Section 4201(b) of AWIA authorizes state financing authorities to use WIFIA financial assistance to cover 100% of project costs. As discussed earlier, WIFIA financing generally supports up to 49% of project costs. The additional $5.0 million appropriation is available only to the extent that both the CWSRF and the DWSRF are funded at FY2018 levels or 105% or more of the previous year's funding, whichever is greater, and when EPA receives at least $50.0 million in WIFIA appropriations. Section 4201(b)(2) of AWIA clarifies that state finance authorities cannot pass WIFIA application fees on to parties that utilize the credit assistance. Prior to AWIA, WIFIA projects required two letters of credit from rating agencies. Section 4201(a)(2) of AWIA authorizes projects from state finance authorities to supply one letter of credit. In addition, AWIA requires EPA to review and approve or provide guidance on WIFIA projects submitted by state finance authorities within 180 days of submittal. AWIA Section 4201authorizes EPA to enter into agreements with other relevant agencies authorized to provide WIFIA assistance to allow EPA to administer the WIFIA program for another authorized agency. Relatedly, Section 4301 of AWIA specifically directs EPA and the commissioner of the Bureau of Reclamation to enter into such an agreement. Such agreements may help prevent the duplication of WIFIA-related administrative functions across federal agencies. AWIA also requires GAO to report to Congress within three years of enactment on all projects that receive WIFIA assistance. Initiated by EPA in 2006, WaterSense is a voluntary labeling program that identifies and promotes water-efficient products, buildings, and services. Prior to the enactment of AWIA, WaterSense was not explicitly authorized in law. It is similar to the Department of Energy's (DOE) EnergyStar voluntary labeling program to promote energy efficiency. Section 4306 of AWIA amends the Energy Policy Act of 2005 ( P.L. 109-58 ) to establish the WaterSense program at EPA. Section 4306 authorizes EPA to establish specifications that products and services must meet to earn a WaterSense label, some of which differ from the original program. AWIA stipulates that products and services earning the WaterSense label must reduce water use, decrease strain on water systems, conserve energy, and preserve water resources. Section 4306 requires EPA to set detailed performance criteria for water efficiency. Every six years, EPA must review the water efficiency criteria and update them as necessary. AWIA authorizes EPA to establish the WaterSense performance criteria based on technical specifications and testing protocols of relevant voluntary consensus standards organizations. It also requires EPA to consider reviewing and revising WaterSense performance criteria established prior to January 1, 2012, by December 31, 2019. Section 4306 establishes EPA's oversight responsibilities for the WaterSense program. These responsibilities include auditing the use of the WaterSense label, testing protocols, and managing the accreditation process for WaterSense certification bodies. This section directs EPA and DOE to coordinate to prevent duplicative or conflicting requirements in the WaterSense and EnergyStar programs. AWIA explicitly requires the inclusion of certain products and services in the WaterSense program. These include irrigation technologies and services, point-of-use water treatment devices, plumbing products, water reuse and recycling technologies, various landscaping and gardening products and services, whole house humidifiers, and water-efficient buildings. Section 2007 of AWIA directs EPA to administer a competitive grant program to accelerate the development of innovative water technology that addresses drinking water supply, quality, treatment or security. Among the selection criteria for grants, EPA must prioritize projects that provide additional drinking water supplies with minimal environmental impact. Eligible grant recipients include research institutions, regional water organizations, nonprofit organizations, and institutions of higher education, which can partner with private entities. The maximum single grant award for any one recipient is $5.0 million. Grant recipients may use these grants for developing, testing, or deploying water technologies or providing technical assistance to deploy existing innovative water technologies. EPA must submit a report to Congress that details advancements in water technology associated with this grant program. This section authorizes $10.0 million to be appropriated each year for FY2019 and FY2020 to support this grant program. With AWIA, the 115 th Congress passed an omnibus water infrastructure and project authorization bill that affects several federal agencies. The act includes the most comprehensive amendments to the Safe Drinking Water Act since 1996, with overarching themes involving drinking water infrastructure affordability and water system compliance capacity and sustainability. The amendments authorize new competitive grant programs and activities that are broadly intended to help communities afford drinking water infrastructure improvements needed to achieve compliance with federal drinking water standards and protect public health. Other new SDWA programs authorize grants for projects and activities that (1) improve drinking water system sustainability and resiliency, (2) develop water system capacity to respond to contamination or other events, and (3) address lead in school drinking water. AWIA's DWSRF provisions constitute the first major revision of the program since its establishment in 1996. As with the competitive grant programs, these revisions are intended to facilitate communities' access to DWSRF financial assistance. Among other purposes, AWIA's DWSRF revisions authorize the use of DWSRF funds for (1) source water protection activities, (2) providing additional financing flexibility for public water systems, (3) replacing and repairing aging infrastructure, and (4) increasing subsidies for disadvantaged communities. AWIA authorizes additional water infrastructure assistance with revisions to the WIFIA program. In addition to making the program permanent, AWIA authorizes an additional appropriation for WIFIA assistance under certain conditions. These revisions further authorize EPA to partner with Bureau of Reclamation and other relevant agencies to allow for implementation of WIFIA credit assistance for a broader range of eligible water infrastructure projects. Appendix A. Reports, Plans, and Regulations in AWIA ( P.L. 115-270 ) Appendix B. Cross Reference: AWIA, SDWA, and U.S. Code Sections Appendix C. Other EPA-Related Provisions of AWIA
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Congress has long deliberated on the condition of drinking water infrastructure and drinking water quality as well as the financial and technical challenges some public water systems face in ensuring the delivery of safe and adequate water supplies. Several events and circumstances—including source water contamination incidents; water infrastructure damage from natural disasters, such as hurricanes; detection of elevated lead levels in tap water in various cities and schools; and the nationwide need to repair or replace aging drinking water infrastructure—have increased national attention to these issues. America's Water Infrastructure Act of 2018 (AWIA; P.L. 115-270), enacted on October 23, 2018, contains provisions that seek to address these and other water infrastructure concerns. Overall, AWIA authorizes various water infrastructure projects and activities for several federal agencies. Title I of AWIA, "Water Resources Development Act of 2018," authorizes water resource development activities for the U.S. Army Corps of Engineers (USACE). Title II of AWIA constitutes the most comprehensive amendments to the Safe Drinking Water Act (SDWA) since 1996. Title III primarily includes provisions that address hydropower-related activities of the Federal Energy Regulatory Commission. Among its provisions, Title IV amends U.S. Environmental Protection Agency (EPA)-administered water infrastructure programs and several Clean Water Act authorities. This report focuses on the drinking water provisions of Title II and Title IV of AWIA, which authorize appropriations for several drinking water and wastewater infrastructure programs for projects that promote compliance, address aging drinking water infrastructure and lead in school drinking water, and increase drinking water infrastructure resilience to natural hazards. Title II amends SDWA to help communities achieve SDWA compliance, revise the Drinking Water State Revolving Fund (DWSRF) program, reauthorize appropriations for the DWSRF program, and increase emphasis on assisting disadvantaged communities. Provisions in Title II also revise emergency notification and planning requirements; authorize the use of DWSRF funds for the assessment and protection of drinking water sources; identify options intended to develop public water systems' technical, managerial, and financial capacity; and improve consumer confidence in public drinking water supplies. Title II authorizes a supplemental DWSRF appropriation for disaster assistance for public water systems in certain areas under certain conditions. Other provisions authorize new grant programs to reduce lead contamination in school drinking water, improve drinking water infrastructure for specified Indian tribes, respond to contamination of small and disadvantaged communities' drinking water sources, and improve the sustainability and resilience of small and disadvantaged communities' drinking water systems. Title IV addresses several other water quality and infrastructure issues by authorizing and revising activities and programs for the EPA and other federal agencies. Title IV extends, authorizes, and amends drinking-water-related activities and programs administered by EPA. Specifically, these provisions authorize WaterSense, an EPA-initiated voluntary water efficiency labeling program, and revise the Water Instructure Finance and Innovation Act (WIFIA) financial assistance program. The WIFIA program provides credit assistance for water infrastructure projects. Other provisions authorize grant programs for innovative water technology and for water sector workforce development. Title IV also amends the Clean Water Act to expand a municipal sewer overflow grant program to include stormwater management projects, reauthorize appropriations for that program, and direct EPA to establish a task force for stormwater management. With AWIA, the 115th Congress passed an omnibus water infrastructure and project authorization bill that affects several federal agencies. The act includes several provisions related to drinking water, with overarching themes involving drinking water infrastructure affordability and water system compliance capacity and sustainability.
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Including the first woman to serve in 1917, a total of 365 women have been elected or appointed to serve in the U.S. Congress. That first woman was Jeannette Rankin (R-MT), who was elected on November 9, 1916, to the 65 th Congress (1917-March 4, 1919). Table 1 details this service by women in the House, Senate, and both chambers. The 116 th Congress began with 131 women. Table 2 shows that women account for 23.7% of voting Members in the House and Senate (127 of 535); 24.2% of total Members in the House and Senate (131 of 541, including the Delegates and Resident Commissioner); 23.4% of voting Representatives in the House (102 of 435); 24.0% of total Members in the House (106 of 441, including the Delegates and Resident Commissioner); and 25.0% of the Senate. This report includes historical information, including the (1) number and percentage of women in Congress over time; (2) means of entry to Congress; (3) comparisons to international and state legislatures; (4) records for tenure; (5) firsts for women in Congress; (6) African American, Asian Pacific, Hispanic American, and American Indian women in Congress; and (7) women in leadership. It also provides a brief overview of research questions related to the role and impact of women in Congress. For additional biographical information—including the names, committee assignments, dates of service, listings by Congress and state, and (for Representatives) congressional districts of the women who have served in Congress—see CRS Report RL30261, Women in Congress, 1917-2019: Service Dates and Committee Assignments by Member, and Lists by State and Congress , by Jennifer E. Manning and Ida A. Brudnick. Since the 65 th Congress (1917-1918), the number of women serving in Congress generally increased incrementally, and on a few occasions, decreased. In an exception to these incremental changes, the elections in 1992, which came to be known popularly as the "Year of the Woman," represented a jump in the number of women in Congress. As a result of this 1992 election, whereas the 102 nd Congress (1991-1992) concluded with 34 women, on the first day of the 103 rd Congress (1993-1994), the number of women in Congress increased 58.8%, to 54 women. More recently, the 115 th Congress concluded with 115 women, and on the first day of the 116 th Congress, the number of women in Congress increased 13.9%, to 131 women. Figure 1 shows the changes in the number of women serving in each Congress. For a table listing the total number of women who have served in each Congress, including information on turnover within a Congress, please see Table A-2 in the Appendix . Figure 2 shows division of men and women in Congress historically and in the 116 th Congress. As seen in Figure 3 , 49 states (all except Vermont), 4 territories (American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands), and the District of Columbia have been represented by a woman in Congress at some time since 1917. Four states (Alaska, Mississippi, North Dakota, and Vermont) have never elected a woman to the House. Eighteen states have never been represented by a female Senator. Fourteen states have been represented by one female Senator, 12 have sent two, and 6 states have sent three. Pursuant to Article I, Section 2, clause 4 of the U.S. Constitution, all Representatives enter office through election, even those who enter after a seat becomes open during a Congress. By contrast, the Seventeenth Amendment to the Constitution, which was ratified on April 8, 1913, gives state legislatures the option to empower governors to fill Senate vacancies by temporary appointment. The 56 women who have served in the Senate entered initially through three different routes: 34 entered through regularly scheduled elections, 17 were appointed to unexpired terms, and 5 were elected by special election. As Figure 4 shows, approximately 70% (39) of all women who have served in the Senate initially entered Senate service by winning an election (regular or special). Approximately 30% of women Senators entered the Senate initially through an appointment. Of the 17 women who entered by appointment, 10 served less than one year. Since the ratification of the Seventeenth Amendment to the Constitution in 1913, nine years prior to the first appointment of a woman to fill a Senate vacancy, 200 Senators have been appointed. Of these appointees, 91.5% (183) have been men, and 8.5% (17) were women. The current total percentage of voting female representation in Congress (23.7%) is slightly lower than averages of female representation in other countries. According to the Inter-Parliamentary Union (IPU), as of January 1, 2019, women represented 24.3% of national legislative seats (both houses) across the entire world. In the IPU database of worldwide female representation, the United States ties for 78 th worldwide for women in the lower chamber. The Nordic countries (Sweden, Iceland, Finland, Denmark, and Norway) lead the world regionally with 42.3% female representation in national legislatures. The percentage of women in Congress also is lower than the percentage of women holding seats in state legislatures. According to the Center for American Women and Politics, in 2019, "2,117, or 28.7% of the 7,383 state legislators in the United States are women. Women currently hold 504, or 25.6%, of the 1,972 state senate seats and 1,613, or 29.8%, of the 5,411 state house or assembly seats." Across the 50 states, the total seats held by women range from 13.8% in Mississippi to 50.8% in Nevada. Since the beginning of the 92 nd Congress (1971-1972), the first Congress for which comparative state legislature data are available, the total percentage of women in state legislatures has eclipsed the percentage of women in Congress (see Figure 5 ). The greatest disparity between the percentages of female voting representation in state legislatures as compared with Congress occurred in the early 1990s, when women comprised 6.0% of the total Congress in the 102 nd Congress (1991-1992), but 18.3% of state legislatures in 1991. The gap has since narrowed. First woman elected to Congress. Representative Jeannette Rankin (R-MT, 1917-1919, 1941-1943). First woman to serve in the Senate. Rebecca Latimer Felton (D-GA) was appointed in 1922 to fill the unexpired term of a Senator who had died in office. In addition to being the first female Senator, Mrs. Felton holds two other Senate records. Her tenure in the Senate remains the shortest ever (one day), and, at the age of 87, she is the oldest person ever to begin Senate service. First woman to succeed her spouse in the Senate and also the first female initially elected to a full six-year term. Hattie Caraway (D-AR, 1931-1945) was first appointed in 1931 to fill the vacancy caused by the death of her husband, Thaddeus H. Caraway (D-AR, House, 1913-1921; Senate, 1921-1931), and then was subsequently elected to two six-year terms. First woman elected to the Senate without having first been appointed to serve in that body and first woman to serve in both houses of Congress . Margaret Chase Smith (R-ME) was elected to the Senate and served from January 3, 1949, until January 3, 1973. She had previously served in the House (June 3, 1940, to January 3, 1949). First woman elected to the Senate without first having been elected to the House or having been elected or appointed to fill an unexpired Senate term. Nancy Landon Kassebaum (R-KS, 1979-1997). First woman elected Speaker of the House. As Speaker of the House in the 110 th and 111 th Congresses (2007-2010), Nancy Pelosi held the highest position of leadership ever by a woman in the U.S. government. She was elected Speaker again at the beginning of the 116 th Congress. Longest total length of service by a woman in Congress. Senator Barbara Mikulski (D-MD), who served from January 3, 1977, to January 3, 2017, holds this record (40 years, 10 of which were spent in the House). On March 17, 2012, Senator Mikulski surpassed the record previously held by Edith Nourse Rogers (R-MA). Longest length of service by a woman in the House. On March 18, 2018, currently serving Representative Marcy Kaptur (D-OH) surpassed the record previously held by Representative Rogers. Representative Kaptur has been serving in the House since January 3, 1983 (36 years). Representative Rogers served in the House for 35 years, from June 25, 1925, until her death on September 10, 1960. Longest length of service by a woman in the Senate. Senator Mikulski also holds the record for length of Senate service by a woman (30 years). In January 2011, she broke the service record previously held by Senator Margaret Chase Smith (R-ME), who served 24 years in the Senate and 8.6 years in the House. Sixteen women have served in both the House of Representatives and the Senate. Margaret Chase Smith (R-ME) was the first such woman, as well as the first woman elected to the Senate without first having been elected or appointed to fill a vacant Senate seat. She was first elected to the House to fill the vacancy caused by the death of her husband (Clyde Smith, R-ME, 1937-1940), and she served from June 10, 1940, until January 3, 1949, when she began her Senate service. She served in the Senate until January 3, 1973. Twenty-five African American women serve in the 116 th Congress, including 2 Delegates, a record number. The previous record number was 21, including 2 Delegates, serving at the end of the 115 th Congress. A total of 47 African American women have served in Congress. The first was Representative Shirley Chisholm (D-NY, 1969-1983). Senator Carol Moseley-Braun (D-IL, 1993-1999) was the first African American woman to have served in the Senate. The African American women Members of the 116 th Congress are listed in Table 3 . Ten Asian Pacific American women serve in the 116 th Congress. Patsy Mink (D-HI), who served in the House from 1965-1977 and again from 1990-2002, was the first of 13 Asian Pacific American women to serve in Congress. Mazie Hirono (D-HI) is the first Asian Pacific American woman to serve in both the House and Senate. Twenty Hispanic or Latino women have served in Congress, all but one in the House, and 15 of them, a record number, serve in the 116 th Congress. Representative Ileana Ros-Lehtinen (R-FL, 1989-2018) is the first Hispanic woman to serve in Congress, and Catherine Cortez Masto (D-NV, 2017-present) is the first Hispanic woman Senator. Representatives Sharice Davids (D-KS) and Deb Haaland (D-NM), both first elected to the 116 th Congress, are the first female enrolled members of federally recognized tribes to serve in Congress. A number of women in Congress, listed in Table 6 , have held positions in their party's leadership. House Speaker Nancy Pelosi (D-CA) holds the highest position of leadership in the U.S. government ever held by a woman. As Speaker of the House in the 116 th Congress, she is second in the line of succession for the presidency. She also served as Speaker in the 110 th and 111 th Congresses. In the 108 th , 109 th , and 112 th -115 th Congresses, she was elected the House Democratic leader. Previously, Representative Pelosi was elected House Democratic whip, in the 107 th Congress, on October 10, 2001, effective January 15, 2002. She was also the first woman nominated to be Speaker of the House. Senator Margaret Chase Smith (R-ME), chair of the Senate Republican Conference from 1967 to 1972, holds the Senate record for the highest, as well as first, leadership position held by a female Senator. The first woman Member to be elected to any party leadership position was Chase Going Woodhouse (D-CT), who served as House Democratic Caucus Secretary in the 81 st Congress (1949-1950). As chair of the House Expenditures in the Post Office Department Committee (67 th -68 th Congresses), Mae Ella Nolan was the first woman to chair any congressional committee. As chair of the Senate Enrolled Bills Committee (73 rd -78 th Congresses), Hattie Caraway was the first woman to chair a Senate committee. In total, 26 women have chaired a House committee (including select committees); 14 women have chaired a Senate committee (including select committees); 1 female Senator has chaired two joint committees (related to her service on a standing committee); and 2 female Representatives have chaired a joint committee. In the 116 th Congress, there are currently nine committees led by women: five standing committees in the House, one standing committee in the Senate, one select committee in the House, one select committee in the Senate, and one joint committee. As the number of women in Congress has increased in recent decades, and following the large increase in women following the 1992 elections in particular, numerous studies of Congress have examined the role and impact of these women. Central to these studies have been questions about the following: The legislative behavior of women in Congress, including whether the legislative behavior of female Members differs from their male counterparts. For example, what has the increase in women in Congress meant for descriptive representation (i.e., when representatives and those represented share demographic characteristics, such as representation of women by women) and substantive representation (i.e., representation of policy preferences and a linkage to policy outcomes)? This also includes examinations of whether women Members sponsor more "women's issues bills" or speak more frequently on the House floor about women. These examinations also include questions regarding whether there are any differences in roll call voting behavior between men and women Members of Congress, with a focus on successive Members in the same district, in the same party, or in the chamber overall. The "effectiveness" of female legislators, particularly in comparison to male legislators. These studies have examined bill sponsorship and cosponsorship; women's success in shepherding sponsored bills or amendments into law; committee work; success in securing federal funds; consensus building activities and efforts to form coalitions; effectiveness while in the majority and minority; and their impact on the institution overall. The path that leads women to run for office, comparative success rates of female compared with male candidates, and career trajectory once in Congress. This includes professional backgrounds and experience, barriers to entry, and fundraising; the so-called widow effect, in which many women first secured entry to Congress following the death of a spouse; and reelection efforts and influences on decisions regarding voluntary retirement or pursuing other office.
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A record 131 women currently serve in the 116th Congress. There are 106 women serving in the House (including Delegates and the Resident Commissioner), 91 Democrats and 15 Republicans. There are 25 women in the Senate, 17 Democrats and 8 Republicans. These 131 women surpass the previous record of 115 women at the close of the 115th Congress. The numbers of women serving fluctuated during the 115th Congress; there were 109 women initially sworn in, 5 women subsequently elected to the House, 2 appointed to the Senate, and 1 woman in the House who died in office. The very first woman elected to Congress was Representative Jeannette Rankin (R-MT, served 1917-1919 and 1941-1943). The first woman to serve in the Senate was Rebecca Latimer Felton (D-GA). She was appointed in 1922 and served for only one day. Hattie Caraway (D-AR, served 1931-1945) was the first Senator to succeed her husband and the first woman elected to a six-year Senate term. A total of 365 women have ever been elected or appointed to Congress, including 247 Democrats and 118 Republicans. These figures include six nonvoting Delegates (one each from Guam, Hawaii, the District of Columbia, and American Samoa, and two from the U.S. Virgin Islands), as well as one Resident Commissioner from Puerto Rico. Of these, 309 (211 Democrats, 98 Republicans) women have been elected only to the House of Representatives; 40 (25 Democrats, 15 Republicans) women have been elected or appointed only to the Senate; 16 (11 Democrats, 5 Republicans) women have served in both houses; 47 African American women have served in Congress (2 in the Senate, 45 in the House), including 25 serving in the 116th Congress; 13 Asian Pacific American women have served in Congress (10 in the House, 1 in the Senate, and 2 in both the House and Senate), including 10 in the 116th Congress; 20 Hispanic women have served in Congress (including 1 in the Senate), including 15 in the 116th Congress; and 2 American Indian women, both currently serving in the House, have served in Congress. In the 116th Congress, eight women serve as committee chairs (six in the House, two in the Senate). This report includes historical information, including the number of women in Congress over time; means of entry to Congress; comparisons to international and state legislatures; records for tenure; firsts for women in Congress; women in leadership; African American, Asian Pacific American, Hispanic, and American Indian women in Congress; as well as a brief overview of research questions related to the role and impact of women in Congress. The Appendix provides details on the total number of women who have served in each Congress, including information on changes within a Congress. The numbers in the report may be affected by the time periods used when tallying any particular number. The text and notes throughout the report provide details on time periods used for the tallies and the currency of the information. For additional biographical information—including the committee assignments, dates of service, listings by Congress and state, and (for Representatives) congressional districts of the 365 women who have been elected or appointed to Congress—see CRS Report RL30261, Women in Congress, 1917-2019: Service Dates and Committee Assignments by Member, and Lists by State and Congress, by Jennifer E. Manning and Ida A. Brudnick.
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The Office of Advocacy (Advocacy) is an "independent" office within the U.S. Small Business Administration (SBA) that is responsible for advancing "the views and concerns of small businesses before Congress, the White House, federal agencies, the federal courts, and state and local policymakers as appropriate." The Chief Counsel for Advocacy (Chief Counsel) directs the office and is appointed by the President from civilian life with the advice and consent of the Senate. The Chief Counsel and Advocacy support the development and growth of American small businesses by "intervening early in federal agencies' regulatory development processes on proposals that affect small entities and providing Regulatory Flexibility Act compliance training to federal agency policymakers and regulatory development officials; producing research to inform policymakers and other stakeholders on the impact of federal regulatory burdens on small businesses, to document the vital role of small businesses in the economy, and to explore and explain the wide variety of issues of concern to the small business community; and fostering a two-way communication between federal agencies and the small business community." Advocacy has 55 staff members and received an appropriation of $9.120 million for FY2019. Advocacy's responsibilities have expanded over time, and legislation has been introduced in recent Congresses to increase its authority still further. For example, during the 115 th Congress, the House passed H.R. 5 , the Regulatory Accountability Act of 2017 (Title III, Small Business Regulatory Flexibility Improvements Act), by a vote of 238-183. The bill would have, among other provisions, revised and enhanced requirements for federal agency notification of the Chief Counsel prior to the publication of any proposed rule; expanded the required use of small business advocacy review panels from three federal agencies to all federal agencies, including independent regulatory agencies; empowered the Chief Counsel to issue rules governing federal agency compliance with the RFA; specifically authorized the Chief Counsel to file comments on any notice of proposed rulemaking, not just when the RFA is concerned; and transferred size standard determinations for purposes other than the Small Business Act and the Small Business Investment Act of 1958 from the SBA's Administrator to the Chief Counsel. During the 113 th Congress, these provisions were included in H.R. 2542 , the Regulatory Flexibility Improvements Act of 2013, and were later included in H.R. 2804 , the Achieving Less Excess in Regulation and Requiring Transparency Act of 2014 (ALERRT Act of 2014), which the House passed on February 27, 2014, and in H.R. 4 , the Jobs for America Act (of 2014), which the House passed on September 18, 2014. During the 114 th Congress, these provisions were included in H.R. 527 , the Small Business Regulatory Flexibility Improvements Act of 2015, which was passed by the House on February 5, 2015. More recently, S. 83 , the Advocacy Empowerment Act of 2019, would empower the Chief Counsel to issue rules governing federal agency compliance with the RFA. In addition, during the 114 th Congress, S. 2847 , the Prove It Act of 2016, which was reported by the Senate Committee on Small Business and Entrepreneurship, would have authorized the Chief Counsel to request the Office of Management and Budget's (OMB's) Office of Information and Regulatory Affairs (OIRA) to review any federal agency certification that a proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities and, as a result, is not required to submit a regulatory flexibility analysis of the rule. If it is determined that the proposed rule would, if promulgated, have a significant economic impact on a substantial number of small entities, the federal agency would then be required to perform both an initial and a final regulatory flexibility analysis for the rule. The bill was reintroduced during the 115 th Congress ( S. 2014 , the Prove It Act of 2017). This report examines Advocacy's origins and the expansion of its responsibilities over time; describes its organizational structure, funding, functions, and current activities; and discusses recent legislative efforts to further enhance its authority. The Small Business Act of 1953 (P.L. 83-163, as amended) authorized the SBA and directed the agency to "aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns." The SBA provided this advocacy function primarily through its administration of small business loan guaranty programs, contracting assistance programs, and management and training programs. The SBA Administrator serves as the lead advocate for small businesses within the federal government. During the early 1970s, several small business organizations indicated at congressional hearings that they were not wholly satisfied with the SBA's advocacy efforts, especially in achieving regulatory relief for small businesses. Congress responded to these concerns by approving legislation ( P.L. 93-386 , the Small Business Amendments of 1974) authorizing the SBA Administrator to create an Office of Chief Counsel for Advocacy and to appoint a Chief Counsel for Advocacy. The Chief Counsel was to serve as a focal point for the agency's advocacy efforts. P.L. 93-386 provided the Chief Counsel five duties: 1. serve as a focal point for the receipt of complaints, criticisms, and suggestions concerning the policies and activities of the Administration and any other federal agency that affects small businesses; 2. counsel small businesses on how to resolve questions and problems concerning the relationship of the small business to the federal government; 3. develop proposals for changes in the policies and activities of any agency of the federal government that will better fulfill the purposes of the Small Business Act and communicate such proposals to the appropriate federal agencies; 4. represent the views and interests of small businesses before other federal agencies whose policies and activities may affect small businesses; and 5. enlist the cooperation and assistance of public and private agencies, businesses, and other organizations in disseminating information about the programs and services provided by the federal government, which are of benefit to small businesses, and information on how small businesses can participate in or make use of such programs and services. The SBA created the Office of Chief Counsel for Advocacy in October 1974, and designated each of the SBA's regional, district, and branch office directors as the advocacy director for their area. The Office of Chief Counsel was placed under the Office of Advocacy, Planning and Research, which was headed by an Assistant Administrator. Anthony Stasio, a long-time, career manager within the SBA, was named the first Chief Counsel. Three deputy advocate positions were subsequently created and staffed: deputy advocate for Advisory Councils, deputy advocate for Government Relations, and deputy advocate for Small Business Organizations. The SBA's Office of Chief Counsel for Advocacy was fully operational as of March 1, 1975. As the Office of Advocacy began operations, several small business organizations lobbied Congress to provide the Chief Counsel greater independence from the SBA's Administrator. They argued that the SBA's Administrator reports to the White House and is subject to the OMB Director's influence. In their view, OMB, at that time, was more attuned to promoting the interests of large businesses than it was to promoting the interests of small businesses. Congress responded to these concerns by passing P.L. 94-305 , to amend the Small Business Act and Small Business Investment Act of 1958. Enacted on June 4, 1976, Title II of the act enhanced the Chief Counsel's authority by requiring the Office of Advocacy to be established as a separate, stand-alone office within the SBA and by requiring the Chief Counsel to be appointed from civilian life by the President, by and with the advice and consent of the Senate. P.L. 94-305 also retained Advocacy's five duties as identified in P.L. 93-386 ; specified that one of Advocacy's primary functions was to examine the role of small business in the American economy and the problems faced by small businesses and to recommend specific measures to address those problems; empowered the Chief Counsel, after consultation with and subject to the approval of the SBA Administrator, to employ and fix the compensation of necessary staff, without going through the normal competitive procedures directed by federal law and the Office of Personnel Management; specified that the Chief Counsel could obtain expert advice and other services, and hold hearings; directed each federal department, agency, and instrumentality to furnish the Chief Counsel with reports and information deemed by the Chief Counsel as necessary to carry out his or her functions; ordered the Chief Counsel to provide Congress, the President, and the SBA with information concerning his or her activities; and authorized to be appropriated $1 million for Advocacy, with any appropriated funds remaining available until expended. It was at this time that the word independent began to be used to describe the Chief Counsel and the Office of Advocacy. However, Advocacy remained a part of the SBA and subject to the sitting Administration's influence. For example, at that time, Advocacy's budget was provided through the SBA's salaries and expenses account, which was approved by the SBA Administrator; Advocacy's annual staffing allotment was subject to the SBA Administrator's approval; and some senior staff within Advocacy were vetted by the White House personnel office prior to hiring. Advocacy's duties were further expanded following enactment of P.L. 96-354 , the Regulatory Flexibility Act of 1980 (RFA, as amended). The RFA establishes in law the principle that government agencies must analyze the effects of their regulatory actions on small entities−small businesses, small nonprofits, and small governments−and consider alternatives that would be effective in achieving their regulatory objectives without unduly burdening these small entities. Advocacy has the responsibility of overseeing and facilitating federal agency compliance. The RFA's sponsors argued that federal agencies should be required to examine the impact of regulations on small businesses because federal regulations tend to be "uniform in design, permit little discretion in their implementation, and place a disproportionate burden upon small businesses, small organizations and small governmental bodies." As Alfred Dougherty Jr., director of the Federal Trade Commission's Bureau of Competition, testified at a congressional hearing: First, even if actual regulatory costs are equal between competing large and small firms, small firms have fewer units of output over which to spread such costs and must include in the price of each unit a larger component of regulatory cost. Second, where small firms have smaller actual regulatory costs than large firms (as is generally the case), small firms remain at a competitive disadvantage because they are unable to take advantage of the "economies of scale" of regulatory compliance. Large firms generally already have extensive "in-house" data compilation and reporting systems and specialized staff accountants, lawyers and managers whose primary function is regulatory compliance. Small firms, by comparison, must either hire additional personnel or purchase expensive consulting services in order to acquire the necessary regulatory expertise. Economist Milton Kafoglis, a member of the President Jimmy Carter's Council on Wage and Price Stability, testified that There seem to be clear economies of scale imposed by most regulatory endeavors. Uniform application of regulatory requirements thus seems to increase the size [of the] firm that can effectively compete. The cost curve of the firm is shifted upward … [with] the small firms' cost curve shifting more than that of the dominant firms [thus] the share of the dominant firm will increase while that of small firms will decrease. As a result, industrial concentration will have increased. This … suggests that the "small business" [regulatory] problem goes beyond mere sympathy for the small businessman, but strikes at the heart of the established national policy of maintaining competition and mitigating monopoly. As discussed below, the RFA requires federal agencies to assess the impact of their forthcoming regulations on s mall entities , which the act defines as small businesses, small governmental jurisdictions, and certain small not-for-profit organizations. The Chief Counsel is responsible for monitoring and reporting agencies' compliance with the act's provisions. The Chief Counsel also reviews and comments on proposed regulations and may appear as amicus curiae (i.e., friend of the court) in any court action to review a rule. P.L. 111-240 , the Small Business Jobs Act of 2010, further enhanced Advocacy's independence by ending the practice of including Advocacy's budget in the SBA's Salaries and Expenses' Executive Direction account. Instead, the President is required to provide a separate statement of the amount of appropriations requested for Advocacy, "which shall be designated in a separate account in the General Fund of the Treasury." The Small Business Jobs Act also requires the SBA Administrator to provide Advocacy with "appropriate and adequate office space at central and field office locations, together with such equipment, operating budget, and communications facilities and services as may be necessary, and shall provide necessary maintenance services for such offices and the equipment and facilities located in such offices." In recognition of its enhanced independence and separate appropriations account, Advocacy, for the first time, issued its own congressional budget justification document and annual performance report as part of the Obama Administration's FY2013 budget request. That document was presented in a new appendix accompanying the SBA's congressional budget justification document and annual performance report. Advocacy has continued to issue its own budget justification document in each of the Administration's subsequent budget requests. As mentioned previously, Advocacy currently has 55 staff members: 4, including the Chief Counsel, in the Office of the Chief Counsel; 16 in the Office of Interagency Affairs (regulatory staff); 9 in the Office of Economic Research; 6 in the Office of Information; 13 in the Office of Regional Affairs (regional advocates); and 7 in the Administrative Support Branch. The Office of Advocacy's organizational chart is presented below, with its anticipated staffing level. Advocacy received an appropriation of $9.120 million for FY2019. Staff salaries and benefits account for about 95% of Advocacy's budget, with the remainder used for economic research grants and direct expenses, such as subscriptions, travel, training, and office supplies. Advocacy is responsible for monitoring and reporting on federal agency compliance with the RFA (5 U.S.C. §§601-612) and Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking (August 13, 2002). Advocacy also comments on proposed rules and participates in small business advocacy review panels, among other activities. As mentioned previously, the RFA (as amended) requires federal agencies to assess the impact of their forthcoming regulations on small entities, which the act defines as including small businesses, small governmental jurisdictions, and certain small not-for-profit organizations. According to Advocacy, the RFA does not seek preferential treatment for small entities, require agencies to adopt regulations that impose the least burden on small entities, or mandate exemptions for small entities. Rather, it requires agencies to examine public policy issues using an analytical process that identifies, among other things, barriers to small business competitiveness and seeks a level playing field for small entities, not an unfair advantage. Under the RFA, Cabinet departments and independent agencies as well as independent regulatory agencies must prepare a regulatory flexibility analysis at the time certain proposed and final rules are issued. The analysis must describe, among other things, (1) the reasons why the regulatory action is being considered; (2) the small entities to which the proposed rule will apply and, where feasible, an estimate of their number; (3) the projected reporting, recordkeeping, and other compliance requirements of the proposed rule; and (4) any significant alternatives to the rule that would accomplish the statutory objectives while minimizing the impact on small entities. However, these analytical requirements are not triggered if the head of the issuing agency certifies that the proposed rule would not have a "significant economic impact on a substantial number of small entities." The RFA does not define significant economic impact or substantial number of small entities . As a result, federal agencies have substantial discretion regarding when the act's analytical requirements are initiated. In addition, the RFA's analytical requirements do not apply to final rules for which the agency does not publish a proposed rule. The RFA also requires federal agencies to publish a "regulatory flexibility agenda" each April and October in the Federal Registe r , listing regulations that the agency expects to propose or promulgate which are likely to have a significant economic impact on a substantial number of small entities; provide their regulatory flexibility agenda to the Chief Counsel and to small businesses or their representatives; retrospectively review rules that have or will have a significant impact within 10 years of their promulgation to determine whether they should be continued without change or should be amended or rescinded to minimize their impact on small entities; and ensure that small entities have an opportunity to participate in the rulemaking process. In addition, the Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA), and the Consumer Financial Protection Bureau (CFPB) are required to convene a small business advocacy review panel (sometimes referred to as SBREFA panels) whenever they are developing a rule that is anticipated to have a significant economic impact on a substantial number of small entities. These panels consist of a representative or representatives from the rulemaking agency, OMB's Office of Information and Regulatory Affairs (OIRA), and the Chief Counsel. Information and advice from small entity representatives are solicited to assist the panel in understanding the ramifications of the proposed rule. The panel must be convened and complete its report, with recommendations, within a 60-day period. Finally, the RFA encourages the issuing agency to modify the proposed rule or initial regulatory flexibility analysis as appropriate, based on the information received from the panel. The RFA also requires the Chief Counsel to monitor and report at least annually on agencies' compliance with the act. The Chief Counsel accomplishes this primarily by reviewing and commenting on proposed regulations and by participating in small business advocacy review panels. In addition, the Chief Counsel may appear as amicus curiae (i.e., friend of the court) in any court action to review a rule. Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking (August 13, 2002), requires federal agencies to make information publicly available concerning how they will comply with the RFA's statutory mandates. It also requires federal agencies to send to Advocacy copies of any draft regulations that may have an impact on a substantial number of small entities. Agencies must send these draft regulations to Advocacy at the same time the draft rules are sent to OIRA for review, or at a reasonable time prior to their publication in the Federal Register . Agencies must consider Advocacy's comments on the proposed rule and must address these comments in the final rule published in the Federal Register . Executive Order 13272 requires Advocacy to notify federal agencies concerning how to comply with the RFA, which is accomplished primarily through Advocacy's periodic publication of A Guide for Government Agencies: How to Comply with the Regulatory Flexibility Act and through Advocacy's compliance training program; report annually on federal agency compliance with the executive order, which is accomplished primarily through Advocacy's annual publication of Report on the Regulatory Flexibility Act ; and train federal regulatory agencies in how to comply with the RFA, which is accomplished through Advocacy's compliance training program. Advocacy provided 17 official public comment letters to 20 federal agencies on a variety of proposed rules in FY2018. It also hosted 23 roundtable discussions in 16 states on proposed rules and regulatory topics. These roundtable discussions provided stakeholders an opportunity to share their views concerning the impact of proposed rules. Advocacy also provided training on RFA compliance to 132 federal officials at 6 rule-writing agencies. Each year, Advocacy provides an estimate of the regulatory cost savings its activities provide to small businesses in the form "of foregone capital or annual compliance costs that otherwise would have been required in the first year of a rule's implementation." These estimates are based primarily on estimates from the federal agencies promulgating the rules, and, in some instances, from industry estimates. Estimating the costs and benefits of federal regulations is methodologically challenging. For example, researchers must determine the baseline for measurement (i.e., what effects would have occurred in the absence of the regulation) and many regulatory cost estimates are based on aggregating the results of regulatory studies conducted years earlier. These studies often use different methods and vary in quality, making conclusions drawn from them problematic. Some observers, including OMB, doubt whether an accurate measure of total regulatory costs and benefits is possible. Moreover, in the case of Advocacy, estimating regulatory cost savings from its activities is even more challenging because it is nearly impossible to determine what changes to these regulations would have been made during the review and comment period if Advocacy did not exist. Advocacy reported that its intervention in rules that were made final resulted in regulatory cost savings on behalf of small businesses of $255.3 million in FY2018. Advocacy's Office of Economic Research "assembles and uses data and other information from many different sources to develop data products that are as timely and actionable as possible." These products typically relate "to the role that small businesses play in the nation's economy, including the availability of credit, the effects of regulations and taxation, the role of firms owned by women, minority and veteran entrepreneurs, factors that influence entrepreneurship, innovation and other issues of concern to small businesses." In addition to sponsoring and conducting research on small business, Advocacy maintains web pages with links to state economic profiles, which are compiled annually by Office of Advocacy staff and provide information concerning small businesses in the state, such as number of small businesses in the state, the number of people employed by those small businesses in the state, and various demographic information concerning the small business owners in the state; firm size economic data, which are compiled by Advocacy staff from the U.S. Bureau of the Census and the U.S. Bureau of Labor Statistics and provide information concerning various owner and business characteristics, such as the number of firms, number of establishments, employment, and annual payroll by the employment size of the business and by location and industry; quarterly economic bulletins, which are authored by Advocacy staff to examine trends in small business employment and lending; research projects which have been authored by Office of Advocacy staff, either by choice or by congressional mandate, and by others sponsored by Advocacy; fact sheets, which are authored by Office of Advocacy staff, covering various topics, such as gender differences in financing, the availability of health insurance among small businesses, and credit card financing; issue briefs, which are authored by Advocacy staff, covering various topics, such as veteran business owners and access to capital for women- and minority-owned businesses; and major sources of data collected by the federal government concerning small business. Advocacy also provides funding to the Census Bureau to support the generation of business data by firm size; publishes "The Small Business Advocate," a newsletter summarizing Advocacy's research endeavors, which has more than 36,000 online subscribers; and publishes "The Small Business Economy," an annual report on the status of small businesses and their role in the national economy. Advocacy published 20 contract and internal research and data reports in FY2018. These reports covered a variety of issues, including crowdfunding, the regulatory development process, nonemployer businesses, and state rankings by small business economic indicators. In addition, Advocacy's economic research staff sponsored six "Small Business Economic Research Forums." These forums provide economists and researchers an opportunity "to discuss a key economic topic" and help "to keep Advocacy's staff up-to-date on the latest data and research from other agencies and researchers." As mentioned previously, Advocacy engages in outreach activities related to its role with the RFA. For example, in FY2016, Advocacy participated in seven small business advocacy review panels (one with the Occupational Safety and Health Administration, two with the Consumer Financial Protection Bureau, and four with the Environmental Protection Agency) and one in FY2018 (with the Occupational Safety and Health Administration). In each case, Advocacy provided outreach to small business owners interested in sharing their views concerning the agency's proposed rule. Advocacy also regularly sponsors roundtable discussions, conferences, and symposia to provide small business owners an opportunity to share their views on issues of concerns to them. For example, Advocacy's regional advocates regularly "interact directly with small businesses, small business trade associations, governors and state legislatures to educate them about the benefits of regulatory flexibility and testify at state-level legislation hearings on small business issues when requested to do so." Regional advocates also "work closely with the ten Regional Fairness Boards in their respective regions to develop information for the SBA's National Ombudsman, as provided for by the Small Business Regulatory Enforcement Fairness Act and alert businesses in their respective regions about regulatory proposals that could affect them." The Chief Counsel also meets regularly with business organizations and trade associations, and participates in Advocacy roundtable discussions, conferences, and symposia. Advocacy's economists provide economic presentations at academic conferences, trade association meetings, think tank events, and other government-sponsored events. Advocacy's regional advocates participated in 523 outreach events in FY2018. Advocacy's economists also made 18 presentations to academic, media, or other small business policy-related audiences. As has been discussed, Advocacy's responsibilities have expanded over time. During the 115 th Congress, H.R. 5 , the Regulatory Accountability Act of 2017 (Title III, Small Business Regulatory Flexibility Improvements Act) was passed by the House. The bill would have increased Advocacy's authority still further. Specifically, H.R. 5 would have revised and enhanced requirements for federal agency notification of the Chief Counsel prior to the publication of any proposed rule; expanded the required use of small business advocacy review panels from three federal agencies to all federal agencies, including independent regulatory agencies; empowered the Chief Counsel to issue rules governing federal agency compliance with the RFA; specifically authorized the Chief Counsel to file comments on any notice of proposed rulemaking, not just when the RFA is concerned; and transferred size standard determinations for purposes other than the Small Business Act and the Small Business Investment Act of 1958 from the SBA's Administrator to the Chief Counsel. Advocates of expanding Advocacy's authority and role under the RFA argue that legislation is necessary to "close loopholes [in the RFA] and more effectively reduce the disproportionate burden that over-regulation places on small entities, thereby enhancing job creation and hastening economic recovery." They argue that recent regulatory expansions and the future threat of further excessive federal regulation—such as under the waves of regulation occurring to implement the Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act—have created immense regulatory burdens and uncertainty for the economy, chilling job creation, investment and economic growth and suppressing America's economic freedom and standing among the world's economies. These effects are particularly burdensome on small businesses—and since start-up firms are the source of net job creation in the U.S. economy it is only logical that the impact of these effects on small businesses contributes substantially to the economy's inability to create sufficient levels of new jobs. Advocates of expanding the Office of Advocacy's authority also note that the Government Accountability Office (GAO) has found that the lack of a uniform definition for the terms significant economic impact , and substantial number of small entities contributes to inconsistent compliance with the RFA across federal agencies. They argue that GAO's findings are further evidence that the RFA needs to be amended. Opponents of expanding Advocacy's authority and role under the RFA argue that the provisions being advocated are part of an "ongoing attack on federal regulation," presented under the guise of "pro-small business rhetoric, which will erect significant barriers to rulemaking that will hinder the promulgation of critical public health and safety protections." They argue that these provisions are (1) based on the false premise that regulatory costs stifle economic growth and job creation; (2) threatens public health and safety by severely undermining federal agency rulemaking; (3) imposes additional duties on agencies while failing to provide for any additional resources to meet such burdens, and (4) allows more opportunities for industry to delay or defeat proposed rulemakings. Opponents also argue that these provisions do nothing to alleviate the purported burden on small entities of complying with federal regulations. In fact, it includes no provision that offers assistance to small entities, whether through subsidies, government guaranteed loans, preferential tax treatment for small firms, or fully funded compliance assistance offices. Instead, the bill merely aggrandizes the power of the SBA's Office of Advocacy and of the professional lobbying class in Washington. The SBA's Office of Advocacy is a relatively small office with a relatively large mandate—to represent the interests of small business in the regulatory process, produce and promote small business economic research, and facilitate small business outreach across the federal government. It faces several challenges. First, Advocacy is generally recognized as being an independent office, but it is housed within the SBA and remains subject to its influence through (1) its proximity to the agency and its organizational culture; (2) the budgetary process, which provides the SBA Administrator a role, albeit recently reduced, in determining Advocacy's budget; and (3) the sheer size of the SBA (more than 5,000 employees and an annual budget exceeding $700 million) relative to Advocacy which, given their statutorily overlapping missions as advocates for small businesses, makes it more difficult than would otherwise be the case for stakeholders to recognize Advocacy as the definitive voice for small businesses. Second, Chief Counsels tend to have relatively short tenures (three years, eight years, one year, seven years, six years, four years, and one year). When they leave office, there have often been delays in naming a successor, creating continuity problems for Advocacy. For example, the position was filled on an interim basis by Claudia Rodgers, a long-time Advocacy senior staff member, from January 2015 (following Winslow Sargeant's departure) until Darryl L. DePriest's Senate confirmation on December 10, 2015. DePriest left office in January 2017. Major L. Clark, III, previously Assistant Chief Counsel for Procurement Policy for Advocacy, is currently filling the Chief Counsel's position on an interim basis. Chief Counsels leave office for various reasons, such as a change in Administration or for more lucrative positions in the private sector. Third, one of Advocacy's primary functions is to monitor and report on federal agency compliance with the RFA, provide comments on proposed rules, and train federal regulatory officials to assist them in complying with the RFA's provisions. However, as GAO has noted, the RFA does not define significant economic impact or substantial number of small entities , two key terms for triggering Advocacy's role under the RFA. The lack of clarity concerning these key terms makes it difficult for Advocacy to objectively determine agency compliance with the RFA and also makes it more difficult for Advocacy to train federal regulatory officials in how to come into compliance with the act. GAO and others have recommended that Congress clarify the meaning of these terms. However, the RFA's original authors purposely decided not to provide a precise definition for these terms. They argued that the varying missions and constituencies served by federal agencies necessitated the provision of discretion to allow federal agencies to "determine what is significant to their programs and particular constituencies." Fourth, Advocacy is subject to criticism from those who believe that it should be more aggressive in preventing federal regulations (i.e., from those who generally oppose federal regulations, especially regulations related to environmental issues and health care reform) and from those who believe that it should be less aggressive in this regard (i.e., from those who generally view federal regulations favorably, especially in addressing environmental and workplace safety issues). Thus, Advocacy often finds itself involved in ideological and partisan disputes concerning the outcome of federal regulatory policies for which it does not have the final say. Finally, Advocacy's relatively limited budget restricts its ability to produce and promote economic research on small businesses and to engage in outreach activities, particularly outreach activities not directly related to its RFA role. It could be argued that Advocacy does not need additional resources for these endeavors because the SBA engages in these same activities. Once again, this reflects the challenges the Office of Advocacy faces as an independent office operating within a much larger federal agency with an overlapping mission.
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The Office of Advocacy (Advocacy) is an "independent" office within the U.S. Small Business Administration (SBA) that advances "the views and concerns of small businesses before Congress, the White House, federal agencies, the federal courts, and state and local policymakers as appropriate." The Chief Counsel for Advocacy (Chief Counsel) directs the office and is appointed by the President from civilian life with the advice and consent of the Senate. Advocacy is a relatively small office with a relatively large mandate—to represent the interests of small business in the regulatory process, provide Regulatory Flexibility Act (RFA) compliance training to federal regulatory officials, produce and promote small business economic research to inform policymakers and other stakeholders concerning the impact of federal regulatory burdens on small businesses and the role of small businesses in the economy, and facilitate small business outreach across the federal government. This report examines Advocacy's origins and the expansion of its responsibilities over time; describes its organizational structure, funding, functions, and current activities; and discusses recent legislative efforts to further enhance its authority. For example, during the 115th Congress, the House passed H.R. 5, the Regulatory Accountability Act of 2017 (Title III, Small Business Regulatory Flexibility Improvements Act), which would have expanded Advocacy's responsibilities. It would have revised and enhanced requirements for federal agency notification of the Chief Counsel prior to the publication of any proposed rule; expanded the required use of small business advocacy review panels from three federal agencies to all federal agencies, including independent regulatory agencies; empowered the Chief Counsel to issue rules governing federal agency compliance with the RFA; specifically authorized the Chief Counsel to file comments on any notice of proposed rulemaking, not just when the RFA is concerned; and transferred size standard determinations for purposes other than the Small Business Act and the Small Business Investment Act of 1958 from the SBA's Administrator to the Chief Counsel. The House passed similar legislation during the 114th Congress (H.R. 527). The analysis suggests that Advocacy faces several challenges. Advocacy, generally recognized as being an independent office, is housed within the much larger SBA which, given their statutorily overlapping missions as advocates for small businesses, makes it more difficult for stakeholders to recognize Advocacy as the definitive voice for small businesses. Chief Counsels tend to have relatively short tenures, creating continuity problems for Advocacy. The RFA does not define significant economic impact or substantial number of small entities, two key terms for triggering Advocacy's role under the RFA. The lack of clarity concerning these key terms makes it difficult for Advocacy to objectively determine agency compliance with the RFA and to train federal regulatory officials in how to come into compliance with the act. Advocacy often finds itself involved in ideological and partisan disputes concerning the outcome of federal regulatory policies for which it does not have the final say. Advocacy's ability to produce and promote economic research on small businesses and to engage in outreach activities, particularly outreach activities not directly related to its RFA role, is constrained by its relatively limited budgetary resources.
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Election administration attracted significant attention in 2000, when issues with the vote count delayed the results of the presidential race. Administrative issues have also been reported in subsequent election cycles. For example, issues with voter registration were reported in multiple states in 2016 and 2018. Some responses to such reports focus on the rules of elections. The Help America Vote Act of 2002 (HAVA; P.L. 107-252 ; 116 Stat. 1666), for example, requires states to establish a uniform standard of what counts as a vote for each voting system they use (52 U.S.C. §21081(a)(6)), and bills have been introduced in recent Congresses to change how voter registration is handled. Other responses focus on the systems that apply election rules. In the United States, that typically means state and local systems. The administration of elections in the United States is highly decentralized. Elections are primarily administered by thousands of state and local systems rather than a single, unified national system. Understanding how those state and local systems work may be relevant to Congress for at least two reasons. First, the way state and local election systems work can affect how well federal action on election administration serves its intended purposes. Most federal action on election administration is carried out by state and local election systems. Interactions between the workings of those systems and federal actions can help determine how effective the federal actions are at achieving their objectives. Second, Congress can require or encourage changes to the way state and local election systems work. Congress has a number of tools for influencing election administration policy. The use of these tools can—either intentionally or unintentionally—affect the workings of the state and local systems that administer federal elections. This report is intended to help Congress understand how state and local election systems work and how their workings might relate to federal activity on election administration. It starts by describing the distribution of election administration duties at the state and local levels and the structures of the state and local systems that conduct elections. It then uses examples from past federal action on election administration to illustrate some of the ways the duties and structures of state and local election systems interact with federal activity. It closes by introducing some considerations that may be relevant to Members interested in election administration. This report focuses on the administration of federal elections in the states by executive and legislative branches of state and local government. Much of the discussion applies to nonfederal as well as federal elections, but the report is intended explicitly to address only federal elections. The report also does not cover the federal role in administering federal elections, election administration in the U.S. territories, the role of law enforcement and the courts in election administration, or issues of constitutional or legal interpretation. The typical federal election process has three main parts: voter registration, vote casting, and vote counting. This report focuses on those three parts of the process rather than on other aspects of campaigns and elections, such as campaign finance and redistricting. Finally, the way federal elections are administered varies between and within states. A full accounting of the variations is beyond the scope of this report. Instead, the report describes general patterns and illustrates them with examples. Examples appear in text boxes like the box below, which describes the role the text boxes play in the report in more detail. Election administration involves making decisions about the rules of elections, such as whether voters should be able to register online, whether they should be required to show photo identification at the polls, and whether election results should be audited. It also involves conducting elections in accordance with those decisions and paying for the activities and resources required to conduct them. These three election administration duties can be described as policymaking, implementation, and funding. This section describes some common patterns in the distribution of these duties at the state and local levels. In the U.S. system, states generally play the primary decisionmaking role in election administration. State legislatures, with input from their governors, can make state laws about the administration of elections and make or initiate election administration amendments to their state constitutions. State laws and constitutions can also delegate or defer responsibility for decisions about the administration of elections to other state or local officials and to voters. The U.S. Constitution also provides for a federal role with respect to decisionmaking about elections, and Congress has exercised such powers in a number of instances. For more information about federal laws governing the state and local conduct of federal elections, see the Appendix . Box 1 uses examples from voter registration to illustrate a number of these approaches to policymaking. It starts with a discussion of a registration policy enacted by the federal government and then describes an adjustment to the policy made, respectively, by a state legislature on the recommendation of a state executive branch official, by state executive branch officials, and by voters. State and local officials may be granted decisionmaking authority explicitly by a variety of constitutional provisions, laws, charters, ordinances, and regulations at multiple levels of government. They may also be left discretion over policy details that are not specified in legislative or regulatory text. For example, states may set out general guidelines for voting technology and ballot design but leave decisions about exactly which machines to buy or how to lay out ballots to local officials. Voters have a say in election administration measures that are referred to the ballot by their state legislatures. Some states also offer citizen initiatives or popular referendums, which voters can use to propose their own state election administration statutes or state constitutional amendments or to repeal or affirm election administration laws adopted by their state legislatures. Table 1 lists the citizen initiative and popular referendum options available to voters in states that offer such mechanisms, as presented by the Initiative & Referendum Institute at the University of Southern California in January 2019. Box 2 uses examples from the November 2018 election to illustrate how states and voters have used ballot measures to make election administration policy. It describes a statewide proposal to enact automatic voter registration in Nevada that was initiated by citizens, and a statewide proposal to enact a voter ID requirement in North Carolina that was referred to the ballot by the state legislature. Early U.S. elections were conducted almost entirely locally. Some states have departed from that tradition. For example, in Alaska, the state conducts elections above the borough level, and, in Delaware, all elections are conducted by the state. Congress has also shifted some responsibility for conducting elections to the state level. For example, the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA; P.L. 99-410 ; 100 Stat. 924) requires states to designate a single state office to provide absent uniformed services and overseas voters with information about voter registration and absentee voting (52 U.S.C. §20302(b)). The NVRA requires states to designate a chief state election official to coordinate state responsibilities under the act (52 U.S.C. §20509), and HAVA requires chief state election officials to implement statewide voter registration lists and oversee development of plans for use of federal election administration funding (52 U.S.C. §21083(a)(1)(A); 52 U.S.C. §21005(a)). However, the day-to-day implementation of election administration policy is still mostly handled by localities. For example, localities typically add eligible voters to the voter rolls; design and print ballots; recruit and train poll workers; select and prepare polling places; store and transport voting equipment; and count, canvass, and report election results. The level of locality primarily responsible for conducting elections is typically the county, but there are some exceptions. The New England states, which have a strong tradition of township government, tend to assign primary responsibility to municipalities. Some states also split implementation duties between counties and municipalities. Responsibility for implementing election administration policy may also be divided between offices or agencies at the same level of local government. For example, according to one scholarly source, as of 2015, localities in about one-third of states split responsibility for conducting elections between two or more offices or agencies. Table 2 lists the states identified by those scholars. Election administration involves both intermittent and ongoing costs. Intermittent costs include irregular expenses like the costs of acquiring voting equipment. Ongoing costs include expenses that are linked to and recur with each individual election, such as the costs of printing ballots, paying poll workers, and transporting voting equipment to polling places, as well as expenses that are incurred whether or not there is an election, such as the costs of training election officials, maintaining voter registration lists, and providing IT support for online voter registration systems. The federal government does not supply ongoing funding to states and localities to conduct elections. To date, Congress has authorized significant federal funding for state and local election administration in one bill: HAVA. HAVA authorized $3.65 billion for three main types of formula-based payments to states as well as additional funding for a number of smaller grant and payment programs (52 U.S.C. §§20901-20906; 52 U.S.C. §§21001-21072). Congress appropriated most of the $3.65 billion for the three types of formula-based payments between FY2003 and FY2010 and appropriated an additional $380 million in March 2018. That means states and localities are responsible for most of the costs of conducting federal elections. Localities typically assume primary responsibility for those costs, with states contributing to varying degrees. All states have supplied or committed to supplying matching funds as required to receive federal HAVA funds (52 U.S.C. §21003(b)(5)(a)). All states but North Dakota, which does not have voter registration, have also contributed to establishing and maintaining the statewide voter registration lists required by HAVA (52 U.S.C. §21083(a)). State contributions to other costs vary. Many states used HAVA funding to help replace or update voting technology, and some have put additional money from state coffers toward those expenses. Table 3 lists state contributions to the costs of acquiring voting equipment, as reported by the U.S. Government Accountability Office (GAO) in 2018. Table 4 provides information from the same report about states' contributions to the costs of maintaining and operating voting equipment. As GAO uses the terms in the survey, operation costs "include things such as poll worker labor to set up equipment, postage for mailing absentee or vote-by-mail ballots, paper and printing supplies for paper ballots or voter-verified paper trails, and electricity to operate equipment during elections." Maintenance costs "include things such as labor to conduct maintenance between elections of any equipment hardware and software as well as any required parts." Some states cover or contribute to the costs of training local election officials, and some share election-specific costs, such as printing ballots and transporting voting equipment. Box 3 uses five examples of cost-sharing arrangements for election-specific costs of federal elections to illustrate the range of approaches states have taken to such arrangements. The structures of the state and local systems that conduct federal elections vary both between and within states. Common variations include differences related to the leadership of the election system; relationship between local election officials and the state; and population size and density of the jurisdiction served by the system. This section describes these structural variations. The state and local election systems that conduct federal elections may be led by an individual, such as the state secretary of state or a town or county clerk; a group, such as a state elections commission or a county board of elections; or a combination of individuals or groups, such as a state secretary of state and state board of elections, or a city clerk and city registrar of voters. Election system leadership may be chosen by voters or appointed by an authority such as the governor or state legislature. The selection method—and the leaders themselves—may be partisan, bipartisan, or nonpartisan. Federal law requires states to designate a chief election official to carry out certain tasks. Table 5 lists the titles of chief state election officials, as reported to CRS by the EAC, and the methods of selecting them, as listed by the National Association of Secretaries of State (NASS) and the National Association of State Legislatures (NCSL). The leadership types and selection methods of local election systems may vary within a state. Box 4 uses examples from Florida and Wisconsin to illustrate such variations. It describes the different causes of variation in the two states and a recent change in Florida to a more uniform selection process. The leadership structures of both state and local systems can also change over time. Box 5 uses the two states from Box 4 to illustrate the types of changes states might make, how they might make them, and how frequently they might make them. It describes one change that was approved by voters as a ballot measure and a number of others that were enacted legislatively. Another way in which the structures of election systems can vary is in the relationship between local election officials and the state. Some local election officials operate largely independently, whereas others rely on state officials or resources for some, most, or all basic functions. For example, as noted in " Funding ," states may provide some or all of the training for local election officials. As described in more detail in " Jurisdiction Size and Density ," local election officials who serve smaller or more rural jurisdictions may also depend on their states to provide specialized expertise, such as legal or technical know-how. States also have varying types and degrees of influence over local election officials. Choices about other structural features, such as the method used to select the leadership of local election systems, can shape this aspect of the state-local relationship. For example, in some states, state officials appoint and can remove local election officials. State officials in other states may have other options for influencing local officials. For example, state officials may have the power to initiate legal action against local officials, to provide or withhold funding for local election administration, or to certify and decertify voting systems. However, they tend to have less control over how local officials perform their election administration duties than state officials with appointment and removal authority. As described in more detail in " Compliance with Federal Requirements ," this dynamic may be especially pronounced for local officials who are popularly elected. Such officials are accountable primarily to voters rather than to the state. Other structural variations between election systems derive from differences in the population size and density of the jurisdictions they serve. Some election jurisdictions reported serving fewer than 100 eligible registered voters in the 2016 election, for example, whereas Los Angeles County reported serving 6.8 million. The eligible registered voters in that county alone reportedly outnumbered the eligible registrants in each of 40 other states. Election jurisdictions also differ in population density. For example, Los Angeles County is an urban center, and many small jurisdictions are rural. Jurisdictions with different population sizes and densities have different election administration advantages and face different administrative challenges. For example, voter registration list maintenance is typically more straightforward in small jurisdictions because their lists are shorter and election officials are more likely to know registrants personally. Meanwhile, large jurisdictions tend to have larger tax bases and more resources. Those differences between jurisdictions may be reflected in the internal structures of the election systems that serve them. One example of such a structural difference is the size and specialization of the system's staff. Larger jurisdictions, which typically have more personnel, may have much of the specialized expertise they need in-house. Smaller jurisdictions, which may have only one part-time employee dedicated to election administration, are more likely to rely on outside expertise. For example, according to law professors Steven F. Huefner, Daniel P. Tokaji, and Edward B. Foley, smaller jurisdictions in Illinois have looked to state attorneys for election law expertise and to voting equipment vendors for technical support. Another type of difference related to jurisdiction size and density is variation in the allocation of system resources. A study prepared for the U.S. Election Assistance Commission in 2013 found that election officials in rural jurisdictions were more likely than their urban counterparts to use paid print advertising for voter outreach. Election officials in urban jurisdictions were more likely to use websites and social media. Small jurisdictions may also allocate a larger share of their resources to meeting state and federal requirements than larger jurisdictions because there are often fixed start-up costs to required changes, and smaller jurisdictions may be less equipped to capitalize on economies of scale. For example, political scientists Heather M. Creek and Kimberly A. Karnes report, "There is a minimum cost to the acquisition and maintenance of voting technology that applies whether the district is purchasing 5 or 500 machines." The duties and structures of state and local election systems can affect the implementation of federal election administration laws. Perhaps as a result, Congress has specified how states and localities should distribute certain election administration duties and structure certain elements of their election systems. Changes to the duties and structures of state and local election systems have sometimes also been side effects of other federal activity on election administration. This section provides examples of ways in which the distribution of election administration duties at the state and local levels and the structures of state and local election systems can affect the implementation of federal election administration law. These examples include federal efforts to affect the administration of elections through (1) requirements, (2) funding, and (3) information sharing. Congress can use requirements to regulate how states and localities administer certain aspects of federal elections. How well such requirements serve their intended purposes depends in part on how closely states and localities comply with them. How closely states and localities comply with federal requirements may, in turn, be affected by the duties and structures of the state and local election systems that implement them. For example, UOCAVA assigns responsibility for complying with some of its requirements to the states (52 U.S.C. §20302), but the tasks required for compliance are often handled by local officials. One scholar, law professor Justin Weinstein-Tull, indicates that this means that the officials who are held liable for compliance with UOCAVA requirements may differ from the officials who take or fail to take the actions needed to comply. Box 6 provides an illustration of this phenomenon as reported by state officials in Alabama. The federal government can provide funding for state and local election administration, which may be conditional on the adoption of certain election administration policies or practices. How well such funding serves its intended purposes may depend in part on how timely it is and how well-tailored it is to its objectives. Duties and structures of state and local election systems may affect how quickly federal funding is claimed and used and how well the uses to which it is put serve federal objectives. For example, HAVA has authorized payments to states to meet its requirements (52 U.S.C. §21007). It has directed those payments to be disbursed to states (52 U.S.C. §21001(a)) and charged chief state election officials with overseeing decisions about how to spend them (52 U.S.C. §21005(a)). State election officials run federal elections in some states, but those states are the exception. As noted in " Implementation " and " Funding ," most states assign election administration implementation and funding duties to local officials. That means that the officials who receive HAVA funding and are charged with overseeing decisions about how to use it often differ from the officials who conduct and pay for the activities and resources it is intended to fund. That has had at least two reported consequences. First, in some cases, it has reportedly delayed access to or use of some HAVA funds. Directing HAVA funding to states introduces opportunities for state-level delays, such as decisions by state officials to wait to claim the funds or requirements in state law to obtain approval to do so. Second, some local officials have stated the view that their states' shares of HAVA funding were not put to what they considered the areas of greatest need. Box 7 provides examples of such consequences as described by state and local officials in Nevada, Minnesota, and Virginia. Congress can require or facilitate information sharing with states and localities by federal agencies. As with funding, the effectiveness of federal information sharing may depend in part on how timely it is. How quickly federal agencies share information with the appropriate state and local officials may be affected by the distribution of election administration duties at the state and federal levels. Box 8 provides an example of such an effect reported by NASS. Past federal action has resulted in both intentional and unintentional changes to state and local election systems. Some federal laws include provisions that are specifically designed to establish certain responsibilities for election administration at the state level. For example, the NVRA requires states to designate chief state election officials to coordinate state responsibilities under the act (52 U.S.C. §20509), and HAVA charges chief state election officials with implementing a statewide voter registration system (52 U.S.C. §21083(a)(1)(A)). Federal regulation has reportedly also had the side effect of shifting the distribution of other election administration duties. For example, the agency-based registration requirements in the NVRA divide voter registration responsibilities between traditional election offices and offices that had not historically been involved in election administration, such as motor vehicle and public assistance agencies (52 U.S.C. §20504; 52 U.S.C. §20506). According to Hale, Montjoy, and Brown, "the need to pass implementing legislation and the complexity of legal and technical requirements" in federal laws such as HAVA and the NVRA has also "led many states to grant new or additional rule-making power" to their chief state election officials. Congress has considered legislation—some of which has been enacted and some of which has not—that would change election rules or the state and local systems that implement them. The interactions between the duties and structures of state and local election systems and past federal actions suggest some considerations that may be relevant to future congressional consideration of proposals that would affect the administration of federal elections. The following questions may be of interest to Members as they consider making changes to election administration or maintaining current rules and structures: How would any proposed change interact with the duties and structures of state and local election systems? Would the duties and structures of state and local election systems make a proposed change difficult to implement? Would the design of a proposed change need to be adjusted to accommodate variations between or within states? Which of the policy tools available to Congress is best suited to achieving the purpose of a proposed change? For example, would it be more effective to advance a proposed change with a federal requirement, or incentivize it via federal funding? How might the nature of the state and local system inform a proposed change? For example, if it is a federal requirement, who is charged with compliance; who is responsible for the tasks required for compliance; and what is the relationship between the two? If it is federal funding, to whom should it be distributed, and who should be involved in making decisions about how to use it? Would a proposed change have the effect, either intentionally or unintentionally, of altering the duties or structures of state or local election systems? If so, what are the advantages and disadvantages of such changes? Are there complications with a proposed change that are not specifically related to election administration? For example, could there be federalism-related issues with intervening in the relationships between states and their political subdivisions?
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The administration of elections in the United States is highly decentralized. Elections are primarily administered by thousands of state and local systems rather than a single, unified national system. States and localities share responsibility for most election administration duties. Exactly how responsibilities are assigned at the state and local levels varies both between and within states, but there are some general patterns in the distribution of duties. States typically have primary responsibility for making decisions about the rules of elections (policymaking). Localities typically have primary responsibility for conducting elections in accordance with those rules (implementation). Localities, with varying contributions from states, typically also have primary responsibility for paying for the activities and resources required to conduct elections (funding). The structures of the state and local systems that conduct elections also vary between and within states. Common variations include differences related to the leadership of the system, the relationship between local election officials and the state, and the population size and density of the jurisdiction the system serves. The leadership of a state or local election system may be elected or appointed, and both the leaders and the methods used to select them may be partisan, bipartisan, or nonpartisan. State officials may have more or less direct influence over local election officials, and the extent of their influence may be affected by other structural features of the state's election systems, such as the methods used to select local officials. Finally, larger election jurisdictions have different administrative advantages and challenges than smaller ones, and more urban jurisdictions have different advantages and challenges than more rural ones. These differences between jurisdictions may be reflected in structural features of the election systems that serve them, such as how the systems allocate resources and where they find specialized expertise. Understanding the duties and structures of state and local election systems may be relevant to Congress for at least two reasons. First, the way state and local election systems work can affect how well federal action on election administration serves its intended purposes. The effectiveness of federal action depends in part on how it is implemented. How it is implemented can depend, in turn, on how the state and local election systems that implement it work. Second, Congress can make or incentivize changes to the way state and local election systems work. Congress has a number of policy tools it can use to affect the administration of federal elections. The use of these tools can—either intentionally or unintentionally—affect the state and local election systems that administer federal elections.
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Iran ratified the nuclear Nonproliferation Treaty (NPT) in 1970. Article III of the treaty requires non-nuclear-weapon states-parties to accept comprehensive International Atomic Energy Agency (IAEA) safeguards; Tehran concluded a comprehensive safeguards agreement with the IAEA in 1974. In 2002, the agency began investigating allegations that Iran had conducted clandestine nuclear activities; the IAEA ultimately reported that some of these activities had violated Tehran's safeguards agreement. Following more than three years of investigation, the IAEA Board of Governors referred the matter to the U.N. Security Council in February 2006. Since then, the council adopted six resolutions requiring Iran to take steps to alleviate international concerns about its nuclear program. This report provides a brief overview of Iran's nuclear program and describes the legal basis for the actions taken by the IAEA board and the Security Council. For more detailed information about Iran's nuclear program, see CRS Report RL34544, Iran's Nuclear Program: Status , by Paul K. Kerr. For more information about the July 2015 Joint Comprehensive Plan of Action (JCPOA) concerning Iran's nuclear program, see CRS Report R43333, Iran Nuclear Agreement , by Kenneth Katzman and Paul K. Kerr. Iran's nuclear program has generated widespread concern that Tehran is pursuing nuclear weapons. Tehran's construction of gas centrifuge uranium enrichment facilities has been the main source of proliferation concern. Gas centrifuges enrich uranium by spinning uranium hexafluoride gas at high speeds to increase the concentration of the uranium-235 isotope. Such centrifuges can produce both low-enriched uranium (LEU), which can be used in nuclear power reactors, and highly enriched uranium (HEU), which is one of the two types of fissile material used in nuclear weapons. HEU can also be used as fuel in certain types of nuclear reactors. Iran also has a uranium conversion facility, which converts uranium oxide into several compounds, including uranium hexafluoride. Tehran claims that it wants to produce LEU for its current and future power reactors. Iran's construction of a reactor moderated by heavy water has also been a source of concern. Although Tehran says that the reactor, which Iran is building at Arak, is intended for the production of medical isotopes, it was a proliferation concern because the reactor's spent fuel would have contained plutonium well-suited for use in nuclear weapons. In order to be used in nuclear weapons, however, plutonium must be separated from the spent fuel—a procedure called "reprocessing." Iran has said that it will not engage in reprocessing. Pursuant to the Joint Comprehensive Plan of Action (JCPOA), which Iran concluded in July 2015 with China, France, Germany, Russia, the United Kingdom, and the United States (collectively known as the "P5+1"), Tehran has rendered the Arak reactor's original core inoperable. Iran has also begun to fulfill a JCPOA requirement to redesign and rebuild the Arak reactor based on a design agreed to by the P5+1 so that it will not produce weapons-grade plutonium. The agreement also requires Iran to export the spent fuel from this reactor and all other nuclear reactors. Iran and the IAEA agreed in August 2007 on a work plan to clarify the outstanding questions regarding Tehran's nuclear program. Most of these questions, which had contributed to suspicions that Iran had been pursuing a nuclear weapons program, were subsequently resolved. Then-IAEA Director General Mohamed ElBaradei, however, told the IAEA board June 2, 2008, that there was "one remaining major [unresolved] issue," which concerns questions regarding "possible military dimensions to Iran's nuclear programme." The IAEA agency did not make any substantive progress on these matters for some time. Tehran has questioned the authenticity of some of the evidence underlying the agency's concerns and maintains that it has not done any work on nuclear weapons. Iran also expressed concern to the IAEA that resolving some of these issues would require agency inspectors to have "access to sensitive information related to its conventional military and missile related activities." The IAEA, according to a September 2008 report from ElBaradei, stated its willingness to discuss with Iran modalities that could enable Iran to demonstrate credibly that the activities referred to in the documentation are not nuclear related, as Iran asserts, while protecting sensitive information related to its conventional military activities. Indeed, the agency made several specific proposals, but Tehran did not provide the requested information. The IAEA Board of Governors adopted a resolution on November 18, 2011, stating that "it is essential" for Iran and the IAEA "to intensify their dialogue aiming at the urgent resolution of all outstanding substantive issues." IAEA and Iranian officials met 10 times between January 2012 and May 2013 to discuss what the agency termed a "structured approach to the clarification of all outstanding issues related to Iran's nuclear programme." However, during an October 2013 meeting, IAEA officials and their Iranian counterparts decided to adopt a "new approach" to resolving these issues. Iran signed a joint statement with the IAEA on November 11, 2013, describing a "Framework for Cooperation." According to the statement, Iran and the IAEA agreed to "strengthen their cooperation and dialogue aimed at ensuring the exclusively peaceful nature of Iran's nuclear programme through the resolution of all outstanding issues that have not already been resolved by the IAEA." Iran subsequently provided the agency with information about several of the outstanding issues. Iran later agreed in May 2014 to provide information to the IAEA by August 25, 2014, about five additional issues, including alleged Iranian research on high explosives and "studies made and/or papers published in Iran in relation to neutron transport and associated modelling and calculations and their alleged application to compressed materials." Iran subsequently provided information about four of these issues. According to the JCPOA, Iran was to "complete" a series of steps set out in an Iran-IAEA "Roadmap for Clarification of Past and Present Outstanding Issues." According to IAEA Director General Yukiya Amano, this road map set out "a process" under a November 24, 2013, Joint Plan of Action between Iran and the P5+1, "to enable the Agency, with the cooperation of Iran, to make an assessment of issues relating to possible military dimensions to Iran's nuclear programme." According to a December 2, 2015, report from Amano to the IAEA Board of Governors, "[a]ll the activities contained in the road-map were implemented in accordance with the agreed schedule." The road map required Amano to present this report, which contains the agency's "final assessment on the resolution" of the aforementioned outstanding issues. In response, the board adopted a resolution on December 15, 2015, that notes Iran's cooperation with the road map and "further notes that this closes the Board's consideration" of the "outstanding issues regarding Iran's nuclear programme." Since the IAEA has verified that Iran has taken the steps required for Implementation Day to take effect, the board is no longer focused on Iran's compliance with past Security Council resolutions and past issues concerning Iran's safeguards agreement. Instead, the board is focused on monitoring and verifying Iran's JCPOA implementation "in light of" United Nations Security Council Resolution 2231, which the Council adopted on July 20, 2015. This latter resolution requests the IAEA Director General "to undertake the necessary verification and monitoring of Iran's nuclear-related commitments for the full duration of those commitments under the JCPOA." The December 2015 IAEA resolution requests the Director General to issue quarterly reports to the board regarding Iran's "implementation of its relevant commitments under the JCPOA for the full duration of those commitments." The Director General is also to report to the Board of Governors and the Security Council "at any time if the Director General has reasonable grounds to believe there is an issue of concern" regarding Tehran's compliance with its JCPOA or safeguards obligations. The JCPOA and Resolution 2231 also contain a variety of reporting provisions for the IAEA. For example, the resolution requests the agency's Director General to provide regular updates to the IAEA Board of Governors and, as appropriate, in parallel to the Security Council on Iran's implementation of its commitments under the JCPOA and also to report to the IAEA Board of Governors and in parallel to the Security Council at any time if the Director General has reasonable grounds to believe there is an issue of concern directly affecting fulfilment of JCPOA commitments. Several U.N. Security Council Resolutions required Iran to cooperate fully with the IAEA's investigation of its nuclear activities, suspend its uranium enrichment program, suspend its construction of a heavy-water reactor and related projects, and ratify the Additional Protocol to its IAEA safeguards agreement. Tehran has signed, but not ratified, its Additional Protocol. Resolution 1929, which the council adopted in June 2010, contains these requirements and also required Tehran to refrain from "any activity related to ballistic missiles capable of delivering nuclear weapons." Iran has also continued its extensive ballistic missile program. Resolution 1929 also required Iran to comply with the modified Code 3.1 of its subsidiary arrangements. (See " Potential Noncompliance Since September 2005 .") Iran did not take any of these steps prior to concluding the JCPOA, but did limit and reverse some aspects of its nuclear program since the government began implementing the November 2013 Joint Plan of Action. Moreover, pursuant to the Joint Plan of Action and its November 2013 agreement with the IAEA, Iran provided some information to the agency required by the modified Code 3.1. Pursuant to the JCPOA, Tehran has since implemented additional restrictions on its uranium enrichment program and heavy-water reactor program, as well as begun implementing its additional protocol and the modified Code 3.1. On the JCPOA's Implementation Day, which took place on January 16, 2016, all of the previous Security Council resolutions' requirements were terminated pursuant to U.N. Security Council Resolution 2231, which along with the NPT, composes the current legal framework governing Iran's nuclear program. Although the IAEA reports findings of its inspection and monitoring activities and the JCPOA-established Joint Commission monitors the parties' implementation of the agreement, compliance determinations are national decisions. "Iran continued to adhere" to its JCPOA commitments during 2017, according to an April 2018 State Department report covering that period. All official reports and statements from the United Nations, European Union, the IAEA, and the non-U.S. participating governments also indicate that Iran has complied with the JCPOA and related Resolution 2231 requirements. The most recent report from IAEA Director General Amano states that the IAEA has continued verification and monitoring of the restrictions described in Section T of the JCPOA, which prohibits a number of nuclear weapons-related activities. The agreement, as noted, describes arrangements for agency inspectors to gain access to Iranian sites, including military sites, other than those that Tehran has declared to the agency, "if the IAEA has concerns regarding undeclared nuclear materials or activities, or activities inconsistent with" the JCPOA. The agreement also provides for alternative means to clarify the matter. The IAEA has not reported whether it has requested access to any Iranian military facilities, but the agency has a number of methods other than inspections, such as analyzing open-source information and receiving intelligence briefings from governments, to monitor Iranian compliance with these and other JCPOA commitments. According to the April 2018 State Department report [t]he IAEA continues to exercise its full authorities in pursuing any new safeguards-relevant or JCPOA-related information in Iran, including any new concerns regarding weaponization should they arise, through implementation of Iran's Safeguards Agreement, Additional Protocol, and the enhanced transparency and verification measures contained in the JCPOA. There are no apparent disputes between Iran and the IAEA with respect to Iranian cooperation with the agency. Amano noted in an October 2, 2018, statement that the IAEA has been able to access "all the sites and locations in Iran which" agency inspectors "needed to visit." Similarly, a February 2019 report from Amano states that the IAEA "has conducted complementary accesses under the Additional Protocol to all the sites and locations in Iran which it needed to visit." As noted, Iran is a party to the NPT and has concluded a comprehensive safeguards agreement with the agency. Such agreements are designed to enable the IAEA to detect the diversion of nuclear material from peaceful purposes to nuclear weapons uses, as well as to detect undeclared nuclear activities and material. Safeguards include agency inspections and monitoring of declared nuclear facilities. Although comprehensive safeguards agreements give the IAEA the authority "to verify the absence of undeclared nuclear material and activities, the tools available to it to do so, under such agreements, are limited," according to the agency. As a practical matter, the IAEA's ability to inspect and monitor nuclear facilities, as well as obtain information, in a particular country pursuant to that government's comprehensive safeguards agreement is limited to facilities and activities that have been declared by the government. Additional Protocols to IAEA comprehensive safeguards agreements increase the agency's ability to investigate undeclared nuclear facilities and activities by increasing the IAEA's authority to inspect certain nuclear-related facilities and demand information from member states. Iran signed such a protocol in December 2003 and agreed to implement the agreement pending ratification. Tehran stopped adhering to its Additional Protocol in 2006. The IAEA's authority to investigate nuclear-weapons-related activity is limited. Then Director General ElBaradei explained in a 2005 interview that the IAEA does not have "an all-encompassing mandate to look for every computer study on weaponization. Our mandate is to make sure that all nuclear materials in a country are declared to us." Similarly, a February 2006 report from ElBaradei to the IAEA board stated that "absent some nexus to nuclear material the agency's legal authority to pursue the verification of possible nuclear weapons related activity is limited." There is no requirement that there be any nexus to nuclear material in order for the IAEA to request access to a facility, but there are disagreements among IAEA member states regarding the extent of the agency's rights to access locations where there is no reason to suspect the presence of nuclear material. Such disagreements could play a role if the IAEA Board is required to consider a request for special inspections in Iran or another country (see Appendix B ). Therefore, the closer the connection between nuclear material and the location in question, the more likely the Board would be to approve such an inspection. The current public controversy over Iran's nuclear program began in August 2002, when the National Council of Resistance on Iran (NCRI), an Iranian exile group, revealed information during a press conference (some of which later proved to be accurate) that Tehran had built nuclear-related facilities that it had not revealed to the IAEA. The United States had been aware of at least some of these activities, according to knowledgeable former officials. Prior to the NCRI's revelations, the IAEA had expressed concerns that Iran had not been providing the agency with all relevant information about its nuclear programs, but had never found Tehran in violation of its safeguards agreement. In fall 2002, the IAEA began to investigate Iran's nuclear activities at the sites named by the NCRI; inspectors visited the sites the following February. Adopting its first resolution on the matter in September 2003, the IAEA board called on Tehran to increase its cooperation with the agency's investigation, suspend its uranium enrichment activities, and "unconditionally sign, ratify and fully implement" an Additional Protocol. In October 2003, Iran concluded a voluntary agreement with France, Germany, and the United Kingdom, collectively known as the "E3," to suspend its enrichment activities, sign and implement an Additional Protocol to its IAEA safeguards agreement, and comply fully with the IAEA's investigation. As a result, the agency's board decided to refrain from referring the matter to the U.N. Security Council. As noted, Tehran signed this Additional Protocol in December 2003, but has never ratified it. Ultimately, the IAEA's investigation, as well as information Iran provided after the October 2003 agreement, revealed that Iran had engaged in a variety of clandestine nuclear-related activities, some of which violated the country's safeguards agreement (see Appendix A ). After October 2003, Iran continued some of its enrichment-related activities, but Tehran and the E3 agreed in November 2004 to a more detailed suspension agreement. However, Iran resumed uranium conversion in August 2005 under the leadership of then-President Mahmoud Ahmadinejad, who had been elected two months earlier. On September 24, 2005, the IAEA Board of Governors adopted a resolution (GOV/2005/77) that, for the first time, found Iran to be in noncompliance with its IAEA safeguards agreement. The board, however, did not refer Iran to the Security Council, choosing instead to give Tehran additional time to comply with the board's demands. The resolution urged Iran to implement transparency measures including access to individuals, documentation relating to procurement, dual use equipment, certain military owned workshops, and research and development locations; to reestablish full and sustained suspension of all enrichment-related activity; to reconsider the construction of the research reactor moderated by heavy water; to ratify promptly and implement in full the Additional Protocol; and to continue to act in accordance with the provisions of the Additional Protocol. No international legal obligations required Tehran to take these steps. But ElBaradei's September 2008 report asserted that, without Iranian implementation of such "transparency measures," the IAEA would "not be in a position to progress in its verification of the absence of undeclared nuclear material and activities in Iran." Iran announced in January 2006 that it would resume research and development on its centrifuges at Natanz. The next month, the IAEA Board of Governors referred Iran's case to the U.N. Security Council. Tehran announced shortly after that it would stop implementing its Additional Protocol. (For details, see " Iran and the U.N. Security Council " below.) Iran further scaled back its cooperation with the IAEA in March 2007, when the government told the agency that it would stop complying with a portion of the subsidiary arrangements for its IAEA safeguards agreement. That provision (called the modified code 3.1), to which Iran agreed in February 2003, requires Tehran to provide design information for new nuclear facilities "as soon as the decision to construct, or to authorize construction, of such a facility has been taken, whichever is earlier." Beginning in March 2007, Iran argued that it was only obligated to adhere to the previous notification provisions of its subsidiary arrangements, which required Tehran to provide design information for a new facility 180 days before introducing nuclear material into it. This decision constituted the basis for Iran's stated rationale for its subsequent refusal to provide the IAEA with some information concerning its nuclear program. For example, Tehran had refused to provide updated design information for the heavy-water reactor under construction at Arak. As part of the November 2013 Joint Plan of Action, Iran submitted this information to the IAEA on February 12, 2014. Similarly, Tehran had refused to provide the IAEA with design information for a reactor that Iran intends to construct at Darkhovin. Although Iran provided the agency with preliminary design information about the Darkhovin reactor in a September 22, 2009, letter, the IAEA requested Tehran to "provide additional clarifications" of the information, according to a November 2009 report. Amano reported in September 2010 that Iran had "provided only limited design information with respect to" the reactor. IAEA reports since 2012 do not appear to address this issue. Tehran also argued, based on its March 2007 decision, that its failure to notify the IAEA before September 2009 that it has been constructing a gas-centrifuge uranium enrichment facility, called the Fordow facility, near the city of Qom was consistent with the government's safeguards obligations. Exactly when Iran decided to construct the facility is unclear. Amano reported in May 2012 that the IAEA has requested information from Iran regarding the Fordow construction decision. But Tehran, according to Amano's November 2015 report, has not yet provided all of this information. Subsequent reports from Amano have not addressed the issue. Both the 2007 decision, which the IAEA asked Iran to "reconsider," and Tehran's refusal to provide the design information appear to be inconsistent with the government's safeguards obligations. Although Article 39 of Iran's safeguards agreement states that the subsidiary arrangements "may be extended or changed by agreement between" Iran and the IAEA, the agreement does not provide for a unilateral modification or suspension of any portion of those arrangements. Moreover, the IAEA legal adviser explained in a March 2009 statement that Tehran's failure to provide design information for the reactors is "inconsistent with" Iran's obligations under its subsidiary arrangements. The adviser, however, added that "it is difficult to conclude that" Tehran's refusal to provide the information "in itself constitutes noncompliance with, or a breach of" Iran's safeguards agreement. Nevertheless, a November 2009 report from ElBaradei described Tehran's failures both to notify the agency of the decision to begin constructing the Fordow facility, as well as to provide the relevant design information in a timely fashion, as "inconsistent with" Iran's safeguards obligations. The report similarly described Iran's delay in providing design information for the Darkhovin reactor. Iran may also have violated its safeguards agreement if it decided to construct other new nuclear facilities without informing the IAEA. The agency has investigated whether Iran has made such decisions. For example, the IAEA has asked the government for information about Iranian statements that the government is planning to construct new uranium enrichment facilities, is designing a nuclear reactor similar to a research reactor located in Tehran, is producing fuel for four new research reactors, and is planning to construct additional nuclear power reactors. Pursuant to its November 2013 agreement with the IAEA, Iran has provided at least some of this information to the agency. Iran's March 2007 decision regarding the provision of information to the IAEA also formed the basis for Tehran's refusal until August 2009 to allow agency inspectors to verify design information for the Arak reactor. This action also appeared to be inconsistent with Tehran's safeguards agreement. Article 48 of that agreement states that the IAEA "may send inspectors to facilities to verify the design information provided to the Agency"; in fact, the agency has a "continuing right" to do so, according to a November 2008 report from ElBaradei. Moreover, the legal adviser's statement characterized Iran's refusal to allow IAEA inspectors to verify the Arak reactor's design information as "inconsistent with" Tehran's obligations under its safeguards agreement. IAEA inspectors visited the reactor facility in August 2009 to verify design information, according to a report ElBaradei issued the same month. Inspectors have visited the facility several more times, according to reports from Amano. In addition to the lapses described above, Iran's failure to notify the IAEA of its decision to produce enriched uranium containing a maximum of 20% uranium-235 in time for agency inspectors to adjust their safeguards procedures may, according to a February 2010 report from Amano, have violated Iran's IAEA safeguards agreement. Article 45 of that agreement requires that Tehran notify the IAEA "with design information in respect of a modification relevant for safeguards purposes sufficiently in advance for the safeguards procedures to be adjusted when necessary," according to Amano's report, which describes Iran's enrichment decision as "clearly relevant for safeguards purposes." The IAEA board has neither formally found that any of the Iranian actions described above are in noncompliance with Tehran's safeguards agreement, nor referred these issues to the U.N. Security Council. The IAEA board adopted a resolution on November 27, 2009, that described Iran's failure to notify the agency of the Fordow facility as "inconsistent with" the subsidiary arrangements under Iran's safeguards agreement, but this statement did not constitute a formal finding of noncompliance. A September 13, 2012, IAEA board resolution expressed "serious concern" that Tehran has not complied with the obligations described in IAEA Board of Governors and U.N. Security Council resolutions, but the September resolution did not contain a formal finding of noncompliance. As noted, Iran announced in January 2006 that it would resume research and development on its centrifuges at Natanz. In response, the IAEA board adopted a resolution (GOV/2006/14) on February 4, 2006, referring the matter to the Security Council and reiterating its call for Iran to take the measures specified in the September resolution. Two days later, Tehran announced that it would stop implementing its Additional Protocol. On March 29, 2006, the U.N. Security Council President issued a statement, which was not legally binding, that called on Iran to "take the steps required" by the February IAEA board resolution. The council subsequently adopted six resolutions concerning Iran's nuclear program: 1696 (July 2006), 1737 (December 2006), 1747 (March 2007), 1803 (March 2008), 1835 (September 2008), and 1929 (June 2010). The second, third, fourth, and sixth resolutions imposed a variety of restrictions on Iran. Resolution 1696 was the first to place legally binding Security Council requirements on Iran with respect to its nuclear program. That resolution made mandatory the IAEA-demanded suspension and called on Tehran to implement the transparency measures called for by the IAEA board's February 2006 resolution. Resolution 1737 reiterated these requirements but expanded the suspension's scope to include "work on all heavy water-related projects." It is worth noting that the Security Council has acknowledged (in Resolution 1803, for example) Iran's rights under Article IV of the NPT, which states that parties to the treaty have "the inalienable right ... to develop research, production and use of nuclear energy for peaceful Purposes." As noted, Resolution 1929 also required Tehran to refrain from "any activity related to ballistic missiles capable of delivering nuclear weapons" and to comply with the modified Code 3.1 of its subsidiary arrangement. Resolution 2231, which the U.N. Security Council adopted on July 20, 2015, states that all of the previous resolutions' requirements would be terminated when the council receives a report from the IAEA stating that Iran has implemented the nuclear-related measures by Implementation Day, as described by the July 2015 Joint Comprehensive Plan of Action. As noted, Implementation Day took place on January 16, 2016. Resolution 2231 also "reaffirms that Iran shall cooperate fully as the IAEA requests to be able to resolve all outstanding issues, as identified in IAEA reports." The IAEA Board of Governors' December 2015 resolution noted that the board had closed its consideration of the "outstanding issues regarding Iran's nuclear programme." The JCPOA spells out a process for Iran or the P5+1 to resolve disputes over alleged breaches of their JCPOA commitments pursuant to the agreement. Both the JCPOA and Resolution 2231 contain a "snap back" mechanism to reimpose sanctions should Iran fail to resolve satisfactorily a P5+1 claim regarding Iranian JCPOA noncompliance. This mechanism provides that any permanent UN Security Council member would be able to veto a Security Council resolution that would preserve U.N. sanctions relief in the event of Iranian noncompliance. The JCPOA specifies that, in such a case, "the provisions of the old U.N. Security Council resolutions would be re-imposed, unless the U.N. Security Council decides otherwise." The other P5+1 states are able to invoke this mechanism, but whether the United States may do so is unclear because Resolution 2231 provides that only a "JCPOA participant state" may bring a noncompliance finding to the Security Council; U.S. officials have stated that the United States is no longer participating in the agreement. The legal authority for the actions taken by the IAEA Board of Governors and the U.N. Security Council is found in both the IAEA Statute and the U.N. Charter. The following sections discuss the relevant portions of those documents. Two sections of the IAEA Statute explain what the agency should do if an IAEA member state is found to be in noncompliance with its safeguards agreement. Article III B. 4. of the statute states that the IAEA is to submit annual reports to the U.N. General Assembly and, "when appropriate," to the U.N. Security Council. If "there should arise questions that are within the competence of the Security Council," the article adds, the IAEA "shall notify the Security Council, as the organ bearing the main responsibility for the maintenance of international peace and security." Additionally, Article XII C. states that IAEA inspectors are to report noncompliance issues to the agency's Director General, who is to report the matter to the IAEA Board of Governors. The board is then to "call upon the recipient State or States to remedy forthwith any non-compliance which it finds to have occurred," as well as "report the non-compliance to all members and to the Security Council and General Assembly of the United Nations." In the case of Iran, the September 24, 2005, IAEA board resolution (GOV/2005/77) stated that the board found that Iran's many failures and breaches of its obligations to comply with its NPT Safeguards Agreement, as detailed in GOV/2003/75 [a November 2003 report from then-Director General ElBaradei], constitute non compliance in the context of Article XII.C of the Agency's Statute; According to the resolution, the board also found that the history of concealment of Iran's nuclear activities referred to in the Director General's report [GOV/2003/75], the nature of these activities, issues brought to light in the course of the Agency's verification of declarations made by Iran since September 2002 and the resulting absence of confidence that Iran's nuclear programme is exclusively for peaceful purposes have given rise to questions that are within the competence of the Security Council, as the organ bearing the main responsibility for the maintenance of international peace and security. ElBaradei issued the report cited by the resolution, GOV/2003/75, in November 2003. It described a variety of Iranian nuclear activities, which are detailed in Appendix A , that violated Tehran's safeguards agreement. ElBaradei subsequently reported that Iran has taken corrective measures to address these safeguards breaches. As noted above, the 2005 resolution called on Iran to take a variety of actions that Tehran was not legally required to implement. Several articles of the U.N. Charter, which is a treaty, describe the Security Council's authority to impose requirements and sanctions on Iran. Article 24 confers on the council "primary responsibility for the maintenance of international peace and security." The article also states that the "specific powers granted to the Security Council for the discharge of these duties are laid down" in several chapters of the charter, including Chapter VII, which describes the actions that the council may take in response to "threats to the peace, breaches of the peace, and acts of aggression." Chapter VII of the charter contains three articles relevant to the Iran case. Security Council resolutions that made mandatory the IAEA's demands concerning Iran's nuclear program invoked Chapter VII. Article 39 of that chapter states that the council shall determine the existence of any threat to the peace, breach of the peace, or act of aggression and shall make recommendations, or decide what measures shall be taken in accordance with Articles 41 and 42, to maintain or restore international peace and security. Resolution 1696 invoked Article 40 of Chapter VII "in order to make mandatory the suspension required by the IAEA." As noted, that resolution did not impose any sanctions on Iran. Article 40 states that the Security Council may, before making the recommendations or deciding upon the measures provided for in Article 39 [of Chapter VII], call upon the parties concerned to comply with such provisional measures as it deems necessary or desirable. Resolutions 1737, 1747, 1803, and 1929, which did impose sanctions, invoked Article 41 of Chapter VII. According to Article 41, the Security Council may decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures. These may include complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations. As noted, Security Council resolution 1835 did not impose new sanctions, but reaffirmed the previous resolutions and called on Iran to comply with them. It is worth noting that Article 25 of the U.N. Charter obligates U.N. members "to accept and carry out the decisions of the Security Council." Moreover, Article 103 of the Charter states that [i]n the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail. The IAEA also has an obligation to cooperate with the Security Council, "[b]y virtue of its Relationship Agreement with the United Nations." As noted, Security Council Resolution 2231 requests the IAEA Director General "to undertake the necessary verification and monitoring of Iran's nuclear-related commitments for the full duration of those commitments under the JCPOA." Whether Iran has violated the NPT is unclear. The treaty does not contain a mechanism for determining that a state-party has violated its obligations. Moreover, there does not appear to be a formal procedure for determining such violations. An NPT Review Conference would, however, be one venue for NPT states-parties to make such a determination. The U.N. Security Council has never declared Iran to be in violation of the NPT; neither the council nor the U.N. General Assembly has a responsibility to adjudicate treaty violations. However, the lack of a ruling by the council on Iran's compliance with the NPT has apparently had little practical effect because, as noted, the council has taken action in response to the IAEA Board of Governors' determination that Iran has violated its safeguards agreement. Iran's violations of its safeguards agreement appear to constitute violations of Article III, which requires NPT non-nuclear-weapon states-parties to accept IAEA safeguards, in accordance with the agency's statue, "for the exclusive purpose of verification of the fulfillment of its obligations assumed under this Treaty with a view to preventing diversion of nuclear energy from peaceful uses to nuclear weapons or other nuclear explosive devices." Tehran may also have violated provisions of Article II which state that non-nuclear-weapon states-parties shall not "manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices" or "seek or receive any assistance in the manufacture of nuclear weapons or other nuclear explosive devices." As noted, the IAEA investigated evidence of what then-IAEA Director General Mohamed ElBaradei described in June 2008 as "possible military dimensions to Iran's nuclear programme." Such activities may indicate that Tehran has violated both Article II provisions described above. Moreover, a November 2007 National Intelligence Estimate (NIE) stated that "until fall 2003, Iranian military entities were working under government direction to develop nuclear weapons." This past program could be a violation of Article II, although the estimate does not provide any detail about the program. Nevertheless, the IAEA has never reported that Iran has attempted to develop nuclear weapons. Despite the lack of such an IAEA conclusion, a 2005 State Department report regarding states' compliance with nonproliferation agreements argued that the country had violated Article II of the NPT: The breadth of Iran's nuclear development efforts, the secrecy and deceptions with which they have been conducted for nearly 20 years, its redundant and surreptitious procurement channels, Iran's persistent failure to comply with its obligations to report to the IAEA and to apply safeguards to such activities, and the lack of a reasonable economic justification for this program leads us to conclude that Iran is pursuing an effort to manufacture nuclear weapons, and has sought and received assistance in this effort in violation of Article II of the NPT. The report also stated that Iran's "weapons program combines elements" of Tehran's declared nuclear activities, as well as suspected "undeclared fuel cycle and other activities that may exist, including those that may be run solely by the military." The State Department's 2005 reasoning appears to be based on an interpretation of the NPT which holds that a wide scope of nuclear activities could constitute violations of Article II. The 2005 report states that assessments regarding Article II compliance "must look at the totality of the facts, including judgments as to" a state-party's "purpose in undertaking the nuclear activities in question." The report also includes a list of activities which could constitute such noncompliance. The 2005 State Department report cites testimony from then-Arms Control and Disarmament Agency Director William Foster during a 1968 Senate Foreign Relations Committee hearing. Foster stated that "facts indicating that the purpose of a particular activity was the acquisition of a nuclear explosive device would tend to show non-compliance" with Article II. He gave two examples: "the construction of an experimental or prototype nuclear explosive device" and "the production of components which could only have relevance" to such a device. However, Foster also noted that a variety of other activities could also violate Article II, adding that the United States believed it impossible "to formulate a comprehensive definition or interpretation." It is worth noting that the 2005 State Department report's arguments appear to rely heavily on the notion that a state's apparent intentions underlying certain nuclear-related activities can be used to determine violations of Article II. This interpretation is not shared by all experts. The 2005 report "primarily reflected activities from January 2002 through December 2003." Whether the State Department assesses that Iran has violated Article II since then is unclear. A version of the report released in 2010, which primarily reflected activities from January 1, 2004, through December 31, 2008, states that "the issues underlying" the 2005 report's conclusion regarding Iran's Article II compliance "remain unresolved." Subsequent versions of the report reiterated the 2010 report's assessment until 2016, when the State Department assessed that "previous issues leading to NPT noncompliance findings [regarding Iran] had been resolved." As noted, the 2007 NIE assessed that Iran halted its nuclear weapons program in 2003; subsequent U.S. official statements have consistently reiterated that Tehran has not yet decided to build nuclear weapons. The United Kingdom's then-Foreign Secretary William Hague would not say whether Iran had violated Article II when asked by a Member of Parliament in March 2012. Appendix A. Iranian Noncompliance with Its IAEA Safeguards Agreement The November 2003 report (GOV/2003/75) from IAEA Director General ElBaradei to the agency's Board of Governors details what the September 2005 board resolution described as "Iran's many failures and breaches of its obligations to comply with its safeguards agreement." The report stated that Iran has failed in a number of instances over an extended period of time to meet its obligations under its Safeguards Agreement with respect to the reporting of nuclear material and its processing and use, as well as the declaration of facilities where such material has been processed and stored. The report detailed some of these failures and referenced other failures described in two earlier reports (GOV/2003/40 and GOV/2003/63) from ElBaradei to the IAEA board. According to GOV/2003/40, Iran failed to declare the following activities to the agency: The importation of natural uranium, and its subsequent transfer for further processing. The processing and use of the imported natural uranium, including the production and loss of nuclear material, and the production and transfer of resulting waste. Additionally, Iran failed to declare the facilities where nuclear material (including the waste) was received, stored, and processed; provide in a timely manner updated design information for a research reactor located in Tehran; as well as provide in a timely manner information on two waste storage sites. GOV/2003/63 stated that Iran failed to report uranium conversion experiments to the IAEA. According to GOV/2003/75, Iran failed to report the following activities to the IAEA: The use of imported natural uranium hexafluoride for the testing of centrifuges, as well as the subsequent production of enriched and depleted uranium. The importation of natural uranium metal and its subsequent transfer for use in laser enrichment experiments, including the production of enriched uranium, the loss of nuclear material during these operations, and the production and transfer of resulting waste. The production of a variety of nuclear compounds from several different imported nuclear materials, and the production and transfer of resulting wastes. The production of uranium targets and their irradiation in the Tehran Research Reactor, the subsequent processing of those targets (including the separation of plutonium), the production and transfer of resulting waste, and the storage of unprocessed irradiated targets. Iran also failed to provide the agency with design information for a variety of nuclear-related facilities, according to the report. These included the following: A centrifuge testing facility. Two laser laboratories and locations where resulting wastes were processed. Facilities involved in the production of a variety of nuclear compounds. The Tehran Research Reactor (with respect to the irradiation of uranium targets), the hot cell facility where the plutonium separation took place, as well as the relevant waste handling facility. Additionally, the report cited Iran's "failure on many occasions to co-operate to facilitate the implementation of safeguards, through concealment" of its nuclear activities. Appendix B. IAEA Special Inspections As noted, Iran's obligations under its Additional Protocol to provide access to certain locations are unclear; Tehran may refuse to grant the IAEA access to certain facilities. In such a case, the IAEA Director General could call for a special inspection; the inspection could require approval from the IAEA Board of Governors. According to the IAEA, an inspection is deemed to be special when it is in addition to IAEA routine inspections or "involves access to information or locations" that have not been identified to the IAEA as part of the agency's implementation of safeguards in that country. Such inspections "are foreseen in all Agency safeguards agreements, principally as a means for the Agency to resolve unforeseen verification problems," according to a 1991 IAEA document. Paragraph 73 of the model safeguards agreement, INFCIRC 153, states that comprehensive safeguards agreements should provide for the IAEA's ability to "make special inspections," subject to certain procedures, if the agency considers that information made available by the State, including explanations from the State and information obtained from routine inspections, is not adequate for the Agency to fulfill its responsibilities under the Agreement. According to the 1991 document, a special inspection could be triggered by the IAEA's receipt of "plausible information, which is not adequately explained by the State or otherwise resolved" by other IAEA inspections that the country has "nuclear material in a nuclear activity" outside of IAEA safeguards, or that the state has an undeclared nuclear facility that it had been required to report to the agency. The IAEA Director General "has the authority ... to determine the need for, and to direct the carrying out of, special inspections," according to another 1991 IAEA paper. In the event that the IAEA argues for a special inspection in a country, the agency and the government "must hold immediate consultations," according to the 1991 paper. Any dispute regarding the inspection request must be resolved according to dispute settlement provisions described in INFCIRC 153. However, paragraph 18 of INFCIRC 153 states that if the Board, upon report of the Director General, decides that an action by the State is essential and urgent in order to ensure verification that nuclear material subject to safeguards under the Agreement is not diverted to nuclear weapons or other nuclear explosive devices the Board shall be able to call upon the State to take the required action without delay, irrespective of whether procedures for the settlement of a dispute have been invoked. If the state refuses the inspection, the IAEA Board of Governors can take action according to paragraph 19 of INFCIRC 153, including reporting the matter to the U.N. Security Council. Appendix C. Extended Remarks by William Foster Regarding Possible NPT Article II Violations On July 10, 1968, then-Arms Control and Disarmament Agency Director William Foster testified before the Senate Foreign Relations Committee about the NPT. In response to a question regarding the type of nuclear activities prohibited by Article II of the treaty, Foster supplied the following statement: Extension of Remarks by Mr. Foster in Response to Question Regarding Nuclear Explosive Devices The treaty articles in question are Article II, in which non-nuclear-weapon parties undertake "not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices," and Article IV, which provides that nothing in the Treaty is to be interpreted as affecting the right of all Parties to the Treaty "to develop research, production and use of nuclear energy for peaceful purposes…in conformity with Articles I and II of this Treaty." In the course of the negotiation of the Treaty, United States representatives were asked their views on what would constitute the "manufacture" of a nuclear weapon or other nuclear explosive device under Article II of the draft treaty. Our reply was as follows: "While the general intent of this provision seems clear, and its application to cases such as those discussed below should present little difficulty, the United States believe [sic] it is not possible at this time to formulate a comprehensive definition or interpretation. There are many hypothetical situations which might be imagined and it is doubtful that any general definition or interpretation, unrelated to specific fact situations could satisfactorily deal with all such situations. "Some general observations can be made with respect to the question of whether or not a specific activity constitutes prohibited manufacture under the proposed treaty. For example, facts indicating that the purpose of a particular activity was the acquisition of a nuclear explosive device would tend to show non-compliance. (Thus, the construction of an experimental or prototype nuclear explosive device would be covered by the term 'manufacture' as would be the production of components which could only have relevance to a nuclear explosive device.) Again, while the placing of a particular activity under safeguards would not, in and of itself, settle the question of whether that activity was in compliance with the treaty, it would of course be helpful in allaying any suspicion of non-compliance. "It may be useful to point out, for illustrative purposes, several activities which the United States would not consider per se to be violations of the prohibitions in Article II. Neither uranium enrichment nor the stockpiling of fissionable material in connection with a peaceful program would violate Article II so long as these activities were safeguarded under Article III. Also clearly permitted would be the development, under safeguards, of plutonium fueled power reactors, including research on the properties of metallic plutonium, nor would Article II interfere with the development or use of fast breeder reactors under safeguards."
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Several U.N. Security Council resolutions adopted between 2006 and 2010 required Iran to cooperate fully with the International Atomic Energy Agency's (IAEA's) investigation of its nuclear activities, suspend its uranium enrichment program, suspend its construction of a heavy-water reactor and related projects, and ratify the Additional Protocol to its IAEA safeguards agreement. However, Tehran has implemented various restrictions on, and provided the IAEA with additional information about, its nuclear program pursuant to the July 2015 Joint Comprehensive Plan of Action (JCPOA), which Tehran concluded with China, France, Germany, Russia, the United Kingdom, and the United States. On the JCPOA's Implementation Day, which took place on January 16, 2016, all of the previous resolutions' requirements were terminated. The nuclear Nonproliferation Treaty (NPT) and U.N. Security Council Resolution 2231, which the Council adopted on July 20, 2015, compose the current legal framework governing Iran's nuclear program. Iran has complied with the JCPOA and resolution. Iran and the IAEA agreed in August 2007 on a work plan to clarify outstanding questions regarding Tehran's nuclear program. The IAEA had essentially resolved most of these issues, but for several years the agency still had questions concerning "possible military dimensions to Iran's nuclear programme." A December 2, 2015, report to the IAEA Board of Governors from agency Director General Yukiya Amano contains the IAEA's "final assessment on the resolution" of the outstanding issues. This report provides a brief overview of Iran's nuclear program and describes the legal basis for the actions taken by the IAEA board and the Security Council. It will be updated as events warrant.
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On February 9, 2018, President Trump signed the Bipartisan Budget Act of 2018 into law ( P.L. 115-123 ). Subtitle B of Title IV provided for the creation of a Joint Select Committee on Budget and Appropriations Process Reform. The creation of this committee echoed a number of special panels created by Congress in the past in order to study and make recommendations on various issues unconstrained by existing committee jurisdictions. Prior examples include committees tasked with studying a wide spectrum of issues, including both budget process—such as the Joint Committee to Study Budget Control (created by P.L. 92-599)—and other topics, such as the Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities (also known as the Church Committee after its chairman, Senator Frank Church, created by S.Res. 2 , 94 th Congress). The act directed the joint select committee to "provide recommendations and legislative language that will significantly reform the budget and appropriations process." The act required that the committee be composed of 16 members, with 4 members appointed by each of the Speaker of the House, the minority leader of the House, the majority leader of the Senate, and the minority leader of the Senate. Members were appointed to serve for the life of the committee, with any vacancy to be filled within 14 calendar days. The act further stated that the committee would be led by cochairs. One cochair was to be appointed jointly by the Speaker of the House and the majority leader of the Senate, with the other cochair to be appointed jointly by the House and Senate minority leaders. The four members of the joint select committee appointed by then-Speaker Paul Ryan were House Budget Committee Chairman Steve Womack (who served as committee cochair), House Rules Committee Chairman Pete Sessions, and Representatives Rob Woodall and Jodey Arrington. The four members appointed by then-House Minority Leader Nancy Pelosi were House Appropriations Committee ranking member Nita M. Lowey (who served as committee cochair), House Budget Committee ranking member John Yarmuth, and Representatives Lucille Roybal-Allard and Derek Kilmer. The four members appointed by Senate Majority Leader Mitch McConnell were Senators Roy Blunt, David Perdue, James Lankford, and Joni Ernst. The four members appointed by Senate Minority Leader Charles Schumer were Senators Sheldon Whitehouse, Michael Bennet, Brian Schatz, and Mazie Hirono. Under the act, the joint select committee terminated on December 31, 2018. Federal agencies (including legislative branch agencies) were tasked with providing technical assistance to the committee if requested in writing by the cochairs, and employees of the legislative branch could be detailed to the committee on a nonreimbursable basis consistent with the rules and regulations of the Senate. The act provided an authorization for use of not more than $500,000 from the appropriations account for ''Expenses of Inquiries and Investigations'' of the Senate with such sums to be disbursed by the Secretary of the Senate, in accordance with Senate rules and procedures, upon vouchers signed by the joint panel's cochairs. The committee was required to hold its first meeting not later than 30 calendar days after the date of enactment, with the cochairs of the committee required to provide an agenda to committee members at least 48 hours in advance of any meeting. The initial organizing meeting was held on March 7, 2018, with additional working group meetings held on August 22, September 13, and September 26, 2018, and a markup held on November 15, 27, and 29, 2018. The committee was also authorized and expected to hold hearings and take testimony from witnesses. Each cochair was entitled to select an equal number of witnesses for each hearing. Witnesses appearing before the committee were required to file a written statement of proposed testimony at least two calendar days before his or her appearance. The law specified that nine members of the committee would constitute a quorum for purposes of voting and meeting, and five members of the committee would constitute a quorum for holding hearings. The act stated that the committee provide recommendations and legislative language to significantly reform the budget and appropriations process. The committee was required to vote by November 30, 2018, on (1) a report containing a detailed statement of the findings, conclusions, and recommendations of the committee and (2) proposed legislative language to carry out those recommendations. The text of any report and proposed legislative language were required to be made publicly available in electronic form at least 24 hours prior to its consideration by the joint select committee. The act required the report and the proposed legislative language to be approved by a majority of each of (1) the committee members appointed by the Speaker of the House and the majority leader of the Senate and (2) the committee members appointed by the House and Senate minority leaders. The law specified that nine members of the committee would constitute a quorum for purposes of voting, with no proxy voting permitted. If the committee voted to report recommendations and legislative language, members were to be allowed the opportunity to file supplemental, minority, or additional views to be included in a committee report. Under the act, if the committee had approved a report and legislative language, it would have been required to make them available to the public "promptly" and submit them to the President, the Vice President, the Speaker of the House, and the majority and minority leaders of each chamber within 15 calendar days of approval. Upon receipt of proposed legislative language, the Senate majority leader (or his designee) was required to introduce it in the Senate (by request) on the next day on which the Senate was in session. There were no provisions in the law concerning the introduction of the recommendations of the joint select committee in the House. The Bipartisan Budget Act established certain unique procedures for Senate consideration of any legislative language reported by the joint select committee. These procedures were intended to allow the Senate to reach a timely vote on the question of whether or not to consider legislation embodying the recommendations of the joint select committee, but the act did not specify any procedures governing consideration of the bill once the Senate agreed to take it up. There were no provisions in the act concerning the consideration of the recommendations of the joint select committee in the House. There were also no provisions concerning resolving any differences between the House and Senate or the consideration of a veto message from the President. Such actions would have occurred under the regular procedures of each chamber. Once any recommendations of the joint select committee were introduced in the Senate, the bill would be referred to the Senate Committee on the Budget, which was required to report the bill favorably, unfavorably, or without recommendation within seven session days—but without any revisions. If the Budget Committee failed to report the bill within that period, it would be automatically discharged from consideration of the bill, and the bill would be placed on the Senate Calendar of Business. Not later than two days of Senate session after a joint committee bill was reported or discharged from the Budget Committee, the majority leader (or his designee) could move to proceed to consider it. Should the majority leader (or his designee) not make such a motion within two session days, any Senator could do so. The motion to consider a joint committee bill—and all debatable motions and appeals in connection with the motion—would be considered for a maximum of 10 hours, evenly divided between the majority leader and the minority leader (or their designees). A nondebatable motion to further limit debate would be in order and would require a vote of three-fifths of all Senators—60 votes if there is not more than one vacancy—to pass. In order for the recommendations of the joint select committee to be considered by the full Senate, the act required that the motion to proceed be agreed to by a vote of three-fifths of all Senators—60 votes if there is not more than one vacancy. The act further specified that all points of order against the motion to proceed are waived and that a motion to postpone the motion to proceed or a motion to reconsider a vote on it are not in order. Finally, the act directed that not later than the last day of the 115 th Congress (2017-2018), the Senate must vote on a motion to proceed to a bill containing recommendations of the joint select committee. If the Senate approved the motion to proceed, the joint committee bill could then be considered under the regular rules of the Senate, meaning that it would be fully debatable and fully amendable (possibly including by nongermane amendments) and that cloture might need to be invoked on one or more questions (requiring the support of three-fifths of all Senators) in order to reach a final vote. The joint select committee held five days of public hearings. April 17: current challenges facing the budget and appropriations process in Congress and possibilities for improvement; May 9: challenges of the current procedural framework, particularly as it relates to the ability of Members to work effectively and in a bipartisan manner regardless of political dynamics; May 24: the role of the budget resolution and possible options to bolster its impact and influence on subsequent budgetary actions; June 27: testimony heard from 27 Members of the House and Senate (and written statements received from 5 others), including Speaker of the House Paul Ryan and Hou se Minority Leader, Nancy Pelosi; July 17: former Members' historical perspective on enacting budgetary legislation in the context of the challenges presented by both the politics and the framework of the budget and appropriations process. The committee held multiple meetings, both formal and informal, to provide its members a forum to discuss reforms to the budget and appropriations process. These meetings—including working sessions on August 22, September 13, and September 26, 2018—provided the basis for the recommendations that were subsequently incorporated into draft legislation to be considered by the committee as the cochair's mark. The cochair's mark included a recommendation that the budget resolution be adopted for a two-year cycle rather than the current annual cycle. The draft also addressed a number of related concerns, such as allowing reconciliation instructions for both years of a biennium, providing for a revision of the budget resolution in the second session of a Congress to update it for scoring purposes, and revising the requirements concerning the submission and content of the President's budget in the second year of a biennium. The recommendations also provided for a change in the membership of the Senate Budget Committee to be comprised of eight members from the majority and seven members from the minority, including the chairs and ranking members from the Appropriations and Finance Committees, and for the House and Senate Budget Committees to hold a joint hearing on the fiscal state of the nation. On November 15, 2018, the committee began marking up the draft legislation. In that markup, the committee agreed by unanimous consent to apply a voting rule for the adoption of amendments consistent with the rule required by the act for final adoption of any recommendations. This agreement required separate majorities of the appointees from each party. The markup continued on November 27 and 29. The final vote on reporting the draft bill, as amended, was not agreed to by a roll-call vote of one aye and seven noes of the Members appointed by the Speaker of the House and the Senate majority leader and seven ayes and zero noes of the Members appointed by the House minority leader and the Senate minority leader.
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The Bipartisan Budget Act of 2018 (P.L. 115-123), signed into law on February 9, 2018, created a joint select committee of the House and Senate. The Joint Select Committee on Budget and Appropriations Process Reform was to be made up of 16 Members from the House and Senate—4 chosen by each of the chambers' party leaders. The act charged the joint select committee with formulating recommendations and legislative language to "significantly reform the budget and appropriations process." The law directed the committee to make a report no later than November 30, 2018, to be submitted, along with legislative language, to the President, the Speaker of the House, and the majority and minority leaders of the House and Senate. The act included procedures intended to allow the Senate to reach a timely vote on the question of whether or not to consider any legislation embodying the recommendations of the joint select committee. Under the terms of the act, the Senate would be able to vote on a motion to proceed to consider any reported joint committee bill before the conclusion of the 115th Congress (2017-2018). Consideration of the motion to proceed (and all debatable motions and appeals in connection therewith) was to be limited to 10 hours, equally divided and controlled by the majority and minority leaders (or their designees) with support of at least three-fifths of the Senate (60 votes if there is no more than one vacancy) necessary to approve the motion. The act did not specify any procedures governing consideration of the bill once the Senate had agreed to take it up. There were also no provisions in the act concerning the consideration of the recommendations of the joint select committee in the House nor any provisions concerning resolving any differences between the House and Senate. Such actions would have occurred under the regular procedures of each chamber. During its lifespan, the joint select committee held five days of hearings, taking testimony from 12 outside witnesses and 27 Members, including then-Speaker of the House Paul Ryan and then-House Minority Leader Nancy Pelosi. Formal and informal discussions among committee members resulted in draft legislation to be considered in a markup that concluded on November 29, 2018. The chief recommendation in the draft provided for the budget resolution to be adopted for a two-year cycle rather than the current annual cycle. By unanimous consent, the committee members applied a voting rule for the adoption of amendments consistent with the rule required by the act for final adoption of any recommendations requiring separate majorities of the appointees from each party. The final vote on reporting the bill as amended was not agreed to by a roll-call vote of one aye and seven noes of the Members appointed by the Speaker of the House and the Senate majority leader and seven ayes and zero noes of the Members appointed by the House minority leader and the Senate minority leader.
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This report provides responses to frequently asked questions about the Temporary Assistance for Needy Families (TANF) block grant. It is intended to serve as a quick reference to provide easy access to information and data. Appendix B presents a series of tables with state-level data. This report does not provide information on TANF program rules (for a discussion of TANF rules, see CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements , by Gene Falk). On January 24, 2019, the President signed legislation ( P.L. 116-4 ) that funds TANF and related programs through June 30, 2019. The legislation permits states to receive their quarterly TANF grants for the 2 nd quarter (January through March) and 3 rd quarter (April through June) of FY2019. Additional legislation would be required to pay TANF grants in the final quarter (July through September) of FY2019. TANF programs are funded through a combination of federal and state funds. In FY2018, TANF has two federal grants to states. The bulk of the TANF funding is in a basic block grant to the states, totaling $16.5 billion for the 50 states, the District of Columbia, Puerto Rico, Guam, the Virgin Islands, and American Indian tribes. There is also a contingency fund available that provides extra federal funds to states that meet certain conditions. Additionally, states are required to expend a minimum amount of their own funds for TANF and TANF-related activities under what is known as the maintenance of effort (MOE) requirement. States are required to spend at least 75% of what they spent in FY1994 on TANF's predecessor programs. The minimum MOE amount, in total, is $10.3 billion per year for the 50 states, the District of Columbia, and the territories. TANF was created in the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193 ). A TANF basic block grant amount—both nationally and for each state—was established in the 1996 welfare reform law. The amount established in that law for the 50 states, District of Columbia, territories, and tribes was $16.6 billion in total. From FY1997 through FY2016, that amount remained the same. It was not adjusted for changes that occur over time, such as inflation, the size of the TANF assistance caseload, or changes in the poverty population. During this period, the real (inflation-adjusted) value of the block grant declined by one-third (33.1%). Beginning with FY2017, the state family assistance grant was reduced by 0.33% from its historical levels to finance TANF-related research and technical assistance. The reduced block grant amount is $16.5 billion. Table 1 shows the state family assistance grant, in both nominal (actual) and real (inflation-adjusted) dollars for each year, FY1997 through FY2018. In real (inflation-adjusted) terms, the FY2018 block grant was 36% below its value in FY1997. Figure 1 shows the uses of federal TANF grants to states and state MOE funds in FY2017. In FY2017, a total of $31.1 billion of both federal TANF and state MOE expenditures were either expended or transferred to other block grant programs. Basic assistance—ongoing benefits to families to meet basic needs—represented 23% ($7.1 billion) of total FY2017 TANF and MOE dollars. TANF is a major contributor of child care funding. In FY2017, $5 billion (16% of all TANF and MOE funds) were either expended on child care or transferred to the child care block grant (the Child Care and Development Fund, or CCDF). TANF work-related activities (including education and training) were the third-largest TANF and MOE spending category at $3.3 billion, or 11% of total TANF and MOE funds. TANF also helps low-wage parents by helping to finance state refundable tax credits, such as state add-ons to the Earned Income Tax Credit (EITC). TANF and MOE expenditures on refundable tax credits in FY2017 totaled $2.8 billion, or 9% of total TANF and MOE spending. TANF is also a major contributor to the child welfare system, which provides foster care, adoption assistance, and services to families with children who either have experienced or are at risk of experiencing child abuse or neglect, spending about $2.2 billion on such activities. TANF and MOE funds also help fund state prekindergarten (pre-K) programs, with total FY2017 expenditures for that category also at $2.5 billion. TANF and MOE funds are also used for short-term and emergency benefits and a wide range of other social services. For state-specific information on the use of TANF funds, see Table B-1 and Table B-2 . TANF law permits states to "reserve" unused funds without time limit. This permits flexibility in timing of the use of TANF funds, including the ability to "save" funds for unexpected occurrences that might increase costs (such as recessions or natural disasters). At the end of FY2017 (September 30, 2017, the most recent data currently available), a total of $5.1 billion of federal TANF funding remained neither transferred nor spent. However, some of these unspent funds represent monies that states had already committed to spend later. At the end of FY2017, states had made such commitments to spend—that is, had obligated—a total of $1.8 billion. At the end of FY2017, states had $3.3 billion of "unobligated balances." These funds are available to states to make new spending commitments. Table B-3 shows unspent TANF funds by state. This number is not known. Federal TANF reporting requirements focus on families receiving only ongoing assistance . There is no complete reporting on families receiving other TANF benefits and services. Assistance is defined as benefits provided to families to meet ongoing, basic needs. It is most often paid in cash. However, some states use TANF or MOE funds to provide an "earnings supplement" to working parents added to monthly Supplemental Nutrition Assistance Program (SNAP) allotments. These "earnings supplements" are paid separately from the regular TANF cash assistance program. Additionally, TANF MOE dollars are used to fund food assistance for immigrants barred from regular SNAP benefits in certain states. These forms of nutrition aid meet an ongoing need, and thus are considered TANF assistance. As discussed in a previous section of this report, TANF basic assistance accounts for about 24% of all TANF expenditures. Therefore, the federal reporting requirements that pertain to families receiving "assistance" are likely to undercount the number of families receiving any TANF-funded benefit or service. Table 2 provides assistance caseload information. A total of 1.2 million families, composed of 3.1 million recipients, received TANF- or MOE-funded assistance in September 2018. The bulk of the "recipients" were children—2.3 million in that month. For state-by-state assistance caseloads, see Table B-4 . Figure 2 provides a long-term historical perspective on the number of families receiving assistance from TANF or its predecessor program, from July 1959 to September 2017. The shaded areas of the figure represent months when the national economy was in recession. Though the health of the national economy has affected the trend in the cash assistance caseload, the long-term trend in receipt of cash assistance does not follow a classic countercyclical pattern. Such a pattern would have the caseload rise during economic slumps, and then fall again during periods of economic growth. Factors other than the health of the economy (demographic trends, policy changes) also have influenced the caseload trend. The figure shows two periods of sustained caseload increases: the period from the mid-1960s to the mid-1970s and a second period from 1988 to 1994. The number of families receiving assistance peaked in March 1994 at 5.1 million families. The assistance caseload fell rapidly in the late 1990s (after the 1996 welfare reform law) before leveling off in 2001. In 2004, the caseload began another decline, albeit at a slower pace than in the late 1990s. During the recent 2007-2009 recession and its aftermath, the caseload began to rise from 1.7 million families in August 2008, peaking in December 2010 at close to 2.0 million families. By September 2018, the assistance caseload had declined to 1.2 million families. Table B-5 shows recent trends in the number of cash assistance families by state. Before PRWORA, the "typical" family receiving assistance has been headed by a single parent (usually the mother) with one or two children. That single parent has also typically been unemployed. However, over the past 20 years the assistance caseload decline has occurred together with a major shift in the composition of the rolls. Figure 3 shows the change in the size and composition of the assistance caseload under both AFDC (1988 and 1994) and TANF. In FY1988, an estimated 84% of AFDC families were headed by an unemployed adult recipient. In FY2016, families with an unemployed adult recipient represented 32% of all cash assistance families. This decline occurred, in large part, as the number of families headed by unemployed adult recipients declined more rapidly than other components of the assistance caseload. In FY1994, a monthly average of 3.8 million families per month who received AFDC cash assistance had adult recipients who were not working. In FY2016, a monthly average of 485,000 families per month had adult recipients or work-eligible individuals, with no adult recipient or work-eligible individual working. With the decline in families headed by unemployed adults, the share of the caseload represented by families with employed adults and "child only" families has increased. In FY2017, families with all adult recipients unemployed and families with employed adult recipients each represented 31% of all assistance families. The latter category includes families in "earnings supplement" programs separate from the regular TANF cash assistance program. "Child-only" families are those where no adult recipient receives benefits in their own right; the family receives benefits on behalf of its children. The share of the caseload that was child-only in FY2017 was 38%. In FY2017, families with a nonrecipient, nonparent relative (grandparents, aunts, uncles) represented 14% of all assistance families. Families with ineligible, noncitizen adults or adults who have not reported their citizenship status made up 9% of the assistance caseload in that year. Families where the parent received Supplemental Security Income (SSI) and the children received TANF made up 9% of all assistance families in FY2017. There are no federal rules that help determine the amount of TANF cash benefits paid to a family. (There are also no federal rules that require states to use TANF to pay cash benefits, though all states do so.) Benefit amounts are determined solely by the states. Most states base TANF cash benefit amounts on family size, paying larger cash benefits to larger families on the presumption that they have greater financial needs. The maximum monthly cash benefit is usually paid to a family that receives no other income (e.g., no earned or unearned income) and complies with program rules. Families with income other than TANF often are paid a reduced benefit. Moreover, some families are financially sanctioned for not meeting a program requirement (e.g., a work requirement), and are also paid a lower benefit. Figure 4 shows the maximum monthly TANF cash benefit by state for a single mother caring for two children (family of three) in July 2016. The benefit amounts shown are those for a single-parent family with two children. For a family of three, the maximum TANF benefit paid in July 2017 varied from $170 per month in Mississippi to $1,201 per month in New Hampshire. The map shows a regional pattern to the maximum monthly benefit paid, with lower benefit amounts in the South than in other regions. Only New Hampshire (at 60% of the federal poverty guidelines) had a maximum TANF cash assistance amount for this sized family in excess of 50% of poverty-level income. TANF's main federal work requirement is actually a performance measure that applies to the states, rather than individual recipients. States determine the work rules that apply to individual recipients. The TANF statute requires states to have 50% of their caseload meet standards of participation in work or activities—that is, a family member must be in specified activities for a minimum number of hours. There is a separate participation standard that applies to the two-parent portion of a state's caseload, requiring 90% of the state's two-parent caseload to meet participation standards. However, the statutory work participation standards are reduced by a "caseload reduction credit." The caseload reduction credit reduces the participation standard one percentage point for each percentage point decline in a state's caseload. Additionally, under a regulatory provision, a state may get "extra" credit for caseload reduction if it spends more than required under the TANF MOE. Therefore, the effective standards states face are often less than the 50% and 90% targets, and vary by state and by year. States that do not meet the TANF work participation standard are at risk of being penalized through a reduction in their block grant. However, penalties can be forgiven if a state claims, and the Secretary of HHS finds, that it had "reasonable cause" for not meeting the standard. Penalties can also be forgiven for states that enter into "corrective compliance plans," and subsequently meet the work standard. The 50% and 90% target standards that states face, as well as the caseload reduction credit, date back to the 1996 welfare reform law. However, the Deficit Reduction Act of 2005 (DRA, P.L. 109-171 ) made several changes to the work participation rules effective in FY2007 The caseload reduction credit was changed to measure caseload reduction from FY2005, rather than the original law's FY1995. The work participation standards were broadened to include families receiving cash aid in "separate state programs." Separate state programs are programs run with state funds, distinct from a state's "TANF program," but with expenditures countable toward the TANF MOE. HHS was instructed to provide definition to the allowable TANF work activities listed in law. HHS was also required to define what is meant by a "work-eligible" individual, expanding the number of families that are included in the work participation calculation. States were required to develop plans and procedures to verify work activities. The American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ), a law enacted in response to the sharp economic downturn of 2007-2009, held states "harmless" for caseload increases affecting the work participation standards for FY2009 through FY2011. It did so by allowing states to "freeze" caseload reduction credits at pre-recession levels through the FY2011 standards. HHS computes two work participation rates for each state that are then compared with the effective (after-credit) standard to determine if it has met the TANF work standard. An "all-families" work participation rate is computed and compared with the all-families effective standard (50% minus the state's caseload reduction credit). HHS also computes a two-parent work participation rate that is compared with the two-parent effective standard (90% minus the state's caseload reduction credit). Figure 5 shows the national average all-families work participation rate for FY2002 through FY2017. For the period FY2002 through FY2011, states achieved an average all-families work participation rate hovering around 30%. The work participation rate increased since then. In FY2016, it exceeded 50% for the first time since TANF was established. However, it is important to note that the increase in the work participation rate has not come from an increase in the number of recipients in regular TANF assistance programs who are either working or in job preparation activities. This increase stems mostly from states creating new "earnings supplement" programs that use TANF funds to aid working parents in the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) or who have left the regular TANF assistance programs for work. Figure 6 shows which states did not meet the TANF all-families work participation standards from FY2006 through FY2017. Before FY2007, the first year that DRA was effective, only a few jurisdictions did not meet TANF all-families work participation standards. However, in FY2007, 15 jurisdictions did not meet the all-families standard. This number declined to 9 in FY2008 and 8 in FY2009. In FY2012, despite the uptick in the national average work participation rate, 16 states did not meet the all-family standard, the largest number of states that did not meet their participation standards in any one year since the enactment of TANF. FY2012 was the year that ARRA's "freeze" of the caseload reduction credit expired, and states were generally required to meet higher standards than in previous years. The number of jurisdictions that did not meet the all-families standard declined over the FY2012 to FY2017 period. In FY2017, two jurisdictions did not meet the all-family participation standard: Nevada and Guam. In addition to meeting a work standard for all families, TANF also imposes a second standard—90%—for the two-parent portion of its cash assistance caseload. This standard can also be lowered by caseload reduction. Figure 7 shows whether each state met its two-parent work participation standard for FY2006 through FY2017. However, the display on the table is more complex than that for reporting whether a state met or did not meet its "all family" rate. A substantial number of states have reported no two-parent families subject to the work participation standard. These states are denoted on the table with an "NA," indicating that the two-parent standard was not applicable to the state in that year. Before the changes made by the DRA were effective, a number of states had their two-parent families in separate state programs that were not included in the work participation calculation. When DRA brought families receiving assistance in separate state programs into the work participation rate calculations, a number of states moved these families into solely state-funded programs. These are state-funded programs with expenditures not countable toward the TANF maintenance of effort requirement, and hence are outside of TANF's rules. For states with two-parent families in their caseloads, the table reports "Yes" for states that met the two-parent standard, and "No" for states that did not meet the two-parent standard. Of the 28 jurisdictions that had two-parent families in their FY2017 TANF work participation calculation, 19 met the standard and 9 did not. Appendix A. Supplementary Tables Appendix B. State Tables
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The Temporary Assistance for Needy Families (TANF) block grant funds a wide range of benefits and services for low-income families with children. TANF was created in the 1996 welfare reform law (P.L. 104-193). This report responds to some frequently asked questions about TANF; it does not describe TANF rules (see, instead, CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk). TANF Funding and Expenditures. TANF provides fixed funding for the 50 states, the District of Columbia, the territories, and American Indian tribes. The basic block grant totals $16.5 billion per year. States are also required in total to contribute, from their own funds, at least $10.3 billion annually under a maintenance-of-effort (MOE) requirement. Though TANF is best known for funding cash assistance payments for needy families with children, the block grant and MOE funds are used for a wide variety of benefits and activities. In FY2017, expenditures on basic assistance totaled $7.1 billion—23% of total federal TANF and MOE dollars. Basic assistance is often—but not exclusively—paid as cash. In addition to funding basic assistance, TANF also contributes funds for child care and services for children who have been, or are at risk of being, abused and neglected. Some states also count expenditures in prekindergarten programs toward the MOE requirement. The TANF Assistance Caseload. A total of 1.2 million families, composed of 3.1 million recipients, received TANF- or MOE-funded assistance in September 2018. The bulk of the "recipients" were children—2.3 million in that month. The assistance caseload is heterogeneous. The type of family once thought of as the "typical" assistance family—one with an unemployed adult recipient—accounted for 32% of all families on the rolls in FY2016. Additionally, 31% of cash assistance families had an employed adult, while 38% of all TANF families were "child-only" and had no adult recipient. Child-only families include those with disabled adults receiving Supplemental Security Income (SSI), adults who are nonparents (e.g., grandparents, aunts, uncles) caring for children, and families consisting of citizen children and ineligible noncitizen parents. Cash Assistance Benefits. TANF cash benefit amounts are set by states. In July 2017, the maximum monthly benefit for a family of three ranged from $1,021 in New Hampshire to $170 in Mississippi. Only New Hampshire (at 60% of the federal poverty guidelines) had a maximum TANF cash assistance amount for this sized family in excess of 50% of poverty-level income. Work Requirements. TANF's main federal work requirement is actually a performance measure that applies to the states. States determine the work rules that apply to individual recipients. TANF law requires states to engage 50% of all families and 90% of two-parent families with work-eligible individuals in work activities, though these standards can be reduced by "credits." Therefore, the effective standards states face are often less than the 50% or 90% targets, and vary by state. In FY2017, states achieved, on average, an all-family participation rate of 53.0% and a two-parent rate of 69.5%. In FY2017, two jurisdictions did not meet the all-family participation standard: Nevada and Guam. This is a reduction from FY2012, when 16 states did not meet that standard. In FY2017, nine jurisdictions did not meet the two-parent standard. States that do not meet work standards are at risk of being penalized by a reduction in their block grant.
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Budget justifications are detailed written materials, data, and supporting documents provided by federal agencies that expand upon and support the President's yearly budget submission to Congress. In form and content, the justifications may vary by agency. The Office of Management and Budget (OMB) provides yearly instructions to agencies for producing materials to be included in the President's budget submission and agency budget justifications. Each summer, OMB issues these instructions as part of a document entitled, Circular No. A-11: Preparation, Submission, and Execution of the Budget . The release of budget justifications occurs soon after the release of the President's annual budget submission and in advance of congressional hearings on agency budget requests. Agencies submit budget justifications to the appropriations subcommittees to support agency testimony and inform congressional deliberations. Beginning with the FY2008 executive budget cycle, agencies have also been required to post their congressional budget justification materials on the internet within two weeks of transmittal to Congress. Website links to FY2020 budget justification documents for each of the 15 executive departments and 9 selected independent agencies are provided below. The organization of the materials on agency websites can vary, therefore brief guidance for navigating to FY2020-specific materials is provided below the links as appropriate. In addition, links to historical information from prior fiscal years may also appear or be available through the cited websites. Department of Agriculture https://www.obpa.usda.gov/explan_notes.html Th e webs ite i ncludes links to historical budget justification materials back to FY2008. Department of Commerce https://www.commerce.gov/about/budget-and-performance/FY-2020-congressional-bureau-justification Historical Department of Commerce budget justification materials back to FY2009 and Budget in Brief documents . http://www.osec.doc.gov/bmi/budget/default.htm Department of Defense http://comptroller.defense.gov/Budget-Materials/ Th e webs ite includes an index of links to historical Department of Defense budget justification materials back to FY1998 in the banner section at the top of the site . Department of Education https://www2.ed.gov/about/overview/budget/budget20/index.html Historical Department of Education budget justifica tion materials back to FY2011 . https://www2.ed.gov/about/overview/budget/news.html?src=rt Department of Energy https://www.energy.gov/cfo/downloads/fy-2020-budget-justification Historical Department of Energy budget justifica tion materials back to FY2005 ; scroll to the bottom of the website . https://www.energy.gov/cfo/listings/budget-justification-supporting-documents Department of Health and Human Services https://www.hhs.gov/about/budget/index.html Historical Department of Health and Human Services budget justification materials back to FY2009 are available toward the bottom of the website. Department of Homeland Security https://www.dhs.gov/dhs-budget Historical Department of Homeland Security budget justification materials back to FY2010 and budget-related materials back to FY2003 are available toward the bottom of the website. Department of Housing and Urban Development https://www.hud.gov/program_offices/cfo/reports/fy20_CJ Historical Department of Housing and Urban Development budget justification materials back to FY1998. https://www.hud.gov/program_offices/cfo/budget . Department of the Interior https://www.doi.gov/budget/appropriations/2020 Historical Department of the Interior budget justifica tion materials back to FY2001 . https://www.doi.gov/budget/appropriations/ . Department of Justice https://www.justice.gov/doj/fy-2020-congressional-budget-submission Historical Department of Justice budget justification materials back to FY2015. http://www.justice.gov/doj/budget-and-performance . Department of Labor https://www.dol.gov/general/budget Historical DOL budget justification materials back to FY2008; under "Past Budgets" heading. https://www.dol.gov/general/aboutdol Department of State https://www.state.gov/s/d/rm/rls/ebs/index.htm Historical Department of State budget justifica tion materials back to FY2015 are available on the same site . Department of Transportation https://www.transportation.gov/budget Historical Department of Transportation budget justification materials back to FY2009; under "Budget Estimates" heading. https://www.transportation.gov/mission/budget/dot-budget-and-performance-documents Department of the Treasury https://www.treasury.gov/about/budget-performance/Pages/cj-index.aspx Historical Department of the Treasury budget justification materials back to FY2007 and budget-related materials back to FY2007 are available by scrolling down on the website. Department of Veterans Affairs https://www.va.gov/budget/products.asp Historical Department of Veterans Affairs budget justification materials back to FY2008 are available toward the bottom of the website. Environmental Protection Agency https://www.epa.gov/planandbudget/fy-2020-justification-appropriation-estimates-committee-appropriations FY2019 EPA (prior year) budget justification materials. https://www.epa.gov/planandbudget/fy-2019-justification-appropriation-estimates-committee-appropriations Other historical EPA budget justification materials back to FY2011; toward the bottom of the website under "Justification of Appropriations for Committee on Appropriations" heading. https://www.epa.gov/planandbudget/archive National Aeronautics and Space Administration https://www.nasa.gov/news/budget/index.html Historical NASA budget justification materials back to FY2004 and selected materials back to FY1997 are available toward the bottom of the website under "Previous Years' Budget Requests" heading. Agency for International Development https://www.usaid.gov/results-and-data/budget-spending/cong r essional-budget-justification/fy2020 Historical AID budget justification materials back to FY2001. https://www.usaid.gov/results-and-data/budget-spending/congressional-budget-justification General Services Administration https://www.gsa.gov/reference/reports/budget-performance/annual-budget-requests Previous GSA budget justification materials back to FY2006 are also available on the website. National Science Foundation https://www.nsf.gov/about/budget/fy2020/index.jsp Historical NSF budget justification materials back to FY1996. https://www.nsf.gov/about/budget/ Nuclear Regulatory Commission https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1100/v35/ Historical NRC budget justification materials back to FY2011. https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1100/ Office of Personnel Management https://www.opm.gov/about-us/budget-pe r formance/budgets/#url=Congressional-Budget-Justification Historical budget justification materials back to FY2007 are also available on th e website. Small Business Administration https://www.sba.gov/document/report—congressional-budget-justification-annual-performance-report This site also has links by fiscal year to annual budget justification and performance report materials back to FY2010 . Social Security Administration https://www.ssa.gov/budget/ Historical budget justification materials back to FY20 08 are available via the tabs at the top of th e website. Policy analysis for each of the 12 regular appropriations bills is available via the Congressional Research Service (CRS) Appropriations Status Table by clicking on the corresponding CRS report for each bill at http://www.crs.gov/AppropriationsStatusTable/Index . Additional budget submissions to Congress for subagencies or quasi-government agencies may also be available online. A more extensive listing of federal agencies and offices is available in the current U.S. Government Manual at https://www.govinfo.gov/content/pkg/GOVMAN-2018-12-03/pdf/GOVMAN-2018-12-03.pdf .
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This report provides a convenient listing of online FY2020 agency budget justification submissions for all 15 executive branch departments and 9 selected independent agencies. In most cases, budget justifications contain more detailed descriptions of the proposals and programs that are provided in the President's budget submissions. This report will be updated to reflect the current budget justifications submissions for the forthcoming fiscal year.
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Under the Appointments Clause of the Constitution, the President and the Senate share responsibility for making appointments to the Supreme Court, as well as to various lower courts of the federal judiciary. While the President nominates persons to fill federal judgeships, the appointment of each nominee also requires Senate confirmation. Historically, the vast majority of appointments to federal judgeships (other than to the Supreme Court) have typically not involved much public disagreement between the President and the Senate or between the parties within the Senate. Debate in the Senate over particular lower court nominees, or over the lower court appointment process itself, was uncommon. Typically, such nominations were both reported out of the Judiciary Committee and confirmed by the Senate without any recorded opposition. In recent decades, however, appointments to two kinds of lower federal courts—the U.S. circuit courts of appeals and the U.S. district courts—have often been the focus of heightened Senate interest and debate, as has the process itself for appointing judges to these courts. Given congressional interest in the subject, this report provides statistics and analysis related to the nomination and confirmation of U.S. circuit and district court judges from 1977 (the beginning of the Carter presidency) through 2018 (the second year of the Trump presidency). The report's exclusive focus are the U.S. circuit courts of appeals and U.S. district courts. Excluded from the scope of the report are the U.S. Supreme Court; the U.S. Court of International Trade; the U.S. Court of Federal Claims; and territorial district courts (e.g., the District Court of Guam). The U.S. courts of appeals, or circuit courts, take appeals from federal district court decisions and are also empowered to review the decisions of many administrative agencies. Cases presented to the courts of appeals are generally considered by judges sitting in three-member panels. Courts within the courts of appeals system are often called "circuit courts" (e.g., the First Circuit Court of Appeals is also referred to as the "First Circuit"), because the nation is divided into 12 geographic circuits, each with a U.S. court of appeals. One additional nationwide circuit, the U.S. Court of Appeals for the Federal Circuit, has specialized subject matter jurisdiction. Altogether, 179 judgeships for these 13 courts of appeals are currently authorized by law (167 for the 12 regional U.S. courts of appeals and 12 for the U.S. Court of Appeals for the Federal Circuit). The First Circuit (comprising Maine, Massachusetts, New Hampshire, Rhode Island, and Puerto Rico) has the fewest number of authorized appellate court judgeships, 6, while the Ninth Circuit (comprising Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) has the most, 29. U.S. district courts are the federal trial courts of general jurisdiction. There are 91 Article III district courts: 89 in the 50 states, plus 1 in the District of Columbia and 1 more in Puerto Rico. Each state has at least one U.S. district court, while some states (specifically California, New York, and Texas) have as many as four. Altogether, 673 Article III U.S. district court judgeships are currently authorized by law. Congress has authorized between 1 and 28 judgeships for each district court. The Eastern District of Oklahoma (Muskogee) has 1 authorized judgeship, the smallest number among Article III district courts, while the Southern District of New York (Manhattan) and the Central District of California (Los Angeles) each have 28 judgeships, the most among Article III district courts. Opportunities for a President to make circuit and district court appointments arise when judgeships are vacant or are scheduled to become vacant. Various factors influence the number of such opportunities a President will have during his tenure in office, including the frequency with which judicial departures occur; whether any new judgeships are statutorily created by Congress (which consequently provide a President with the opportunity to nominate individuals to the new judgeships); the number of judicial nominations submitted by a President; and the speed by which the Senate considers such nominations. Table 1 reports the percentage of U.S. circuit and district court judgeships that were vacant on January 1 immediately prior to the beginning of each new Congress and four-year presidential term from 1977 through 2017. Overall, during this period, the median percentage of circuit court judgeships that were vacant immediately prior to the start of a new Congress was 8.9%. The median percentage of district court judgeships that were vacant immediately prior to the start of a new Congress was 7.2%. As shown by the table, the percentage of U.S. circuit judgeships that were vacant was highest at the beginning of the 96 th Congress, 28.8%, and lowest at the beginning of the 98 th Congress, 3.5%. The percentage of U.S. district court judgeships that were vacant was also highest at the beginning of the 96 th Congress, 24.7%, and lowest at the beginning of the 109 th Congress, 3.1%. The percentage of judgeships that are vacant at the beginning of a presidency is influenced, in part, by the extent to which the preceding President's nominees were approved by the Senate during the final year or two of his term. For example, most recently, at the beginning of the Trump presidency, the percentage of U.S. district court judgeships that were vacant was 12.8%. This was due, in part, to the comparatively small number of district court nominations confirmed by the Senate during the final two years of the Obama presidency. Various factors influence the number and percentage of judicial nominees confirmed during any given presidency or Congress. These factors include, but are not limited to, the frequency with which judges depart the bench; the speed with which a presidential Administration vets and selects nominees for vacant judgeships; whether a President is of the same political party as the majority party in the Senate; whether a congressional session coincides with a presidential election year; and the point in a congressional session when nominations arrive in the Senate. As shown by Table 2 , the number of U.S. circuit court nominees confirmed during a completed presidency ranged from a high of 83 during the Reagan presidency to a low of 42 during the single four-year term of George H. W. Bush. Of two-term Presidents, the high ranged from a high of 83 (Reagan) to a low of 55 during the Obama presidency. In terms of the percentage of circuit court nominees confirmed during a completed presidency, which takes into account the number of circuit court nominations submitted to the Senate, the greatest percentage of nominees were confirmed during the Carter presidency (93.3%), and the smallest percentage were confirmed during the George W. Bush presidency (71.8%). Of two-term Presidents, the high ranged from 88.3% during the Reagan presidency to a low of 71.8% (George W. Bush). The number of U.S. district court nominees confirmed during a completed presidency ranged from a high of 305 during the Clinton presidency to a low of 148 during the single four-year term of George H. W. Bush. Of two-term Presidents, the high ranged from a high of 305 (Clinton) to a low of 261 during the George W. Bush presidency. In terms of the percentage of district court nominees confirmed during a completed presidency, which takes into account the number of district court nominations submitted to the Senate, the greatest percentage of nominees were confirmed during the Reagan presidency (94.8%), and the smallest percentage were confirmed during the George H. W. Bush presidency (77.1%). Of two-term Presidents, the high ranged from 94.8% (Reagan) to a low of 83.2% during the Obama presidency. The median number of U.S. circuit court nominees confirmed during a Congress, from the 95 th through the 115 th , was 17 (while the median number of circuit court nominations submitted to the Senate was 26). And as shown by Table 3 , the number of U.S. circuit court nominees confirmed during this same period ranged from a low of 2 (during the 114 th Congress, 2015-2016) to a high of 44 (during the 96 th Congress, 1979-1980). The median percentage of circuit court nominees confirmed during a Congress, from the 95 th through the 115 th , was 65.4%. The smallest percentage of circuit court nominees, 22.2%, were confirmed during the 114 th Congress (2015-2016). All (100%) of the circuit court nominations submitted to the Senate during the 95 th and 99 th Congresses (1977-1978 and 1985-1986, respectively) were confirmed by the Senate. The median number of U.S. district court nominees confirmed during a Congress, from the 95 th through the 115 th , was 66 (while the median number of district court nominations submitted to the Senate was 85). The number of nominees confirmed ranged from a low of 18 (during the 114 th Congress, 2015-2016) to a high of 154 (during the 96 th Congress, 1979-1980). The median percentage of district court nominees confirmed during a Congress, from the 95 th through the 115 th , was 84.0%. The smallest percentage confirmed during this period was 29.5% (during the 114 th Congress, 2015-2016) and the greatest percentage confirmed was 98.6% (during the 97 th Congress, 1981-1982). In general, both a greater number and percentage of circuit and district court nominees were confirmed during Congresses in which the party of the President was the same as the majority party in the Senate. During Congresses in which there was unified party control (i.e., the party of the President and the majority party in the Senate were the same), the median number of circuit court nominees confirmed was approximately 18, and the median percentage of nominees confirmed was 80.0%. In contrast, during Congresses in which there was divided party control (i.e., the party of the President was different than the majority party in the Senate), the median number of circuit court nominees confirmed was 16, and the median percentage of nominees confirmed was 59.7%. During Congresses in which there was unified party control, the median number of district court nominees confirmed was approximately 76, and the median percentage of nominees confirmed was 89.5%. In contrast, during Congresses in which there was divided party control, the median number of district court nominees confirmed was 60, and the median percentage of nominees confirmed was 73.1%. Over the last several presidencies, it has become increasingly common for a President to nominate an individual two or more times to a U.S. circuit or district court judgeship prior to final action on the nomination by the Senate (irrespective of whether the Senate ultimately approved the nomination). Consequently, the percentage of nominees confirmed during a presidency who were nominated two or more times prior to being approved by the Senate has also increased in recent years. As shown by Table 4 , the total number of circuit court nominees who were nominated two or more times prior to final action, whether confirmed or not, ranged from a low of 1 (during the Carter and George H. W. Bush presidencies) to a high of 39 (during the George W. Bush presidency). The number of circuit court nominees who were nominated more than once and ultimately confirmed by the Senate ranged from a low of 0 (during the George H. W. Bush presidency) to a high of 28 (during the George W. Bush presidency). And the number of nominees who were nominated more than once but not confirmed by the Senate ranged from a low of 0 (during the Carter presidency) to a high of 11 (during the George W. Bush presidency). Overall, of the six presidencies listed in Table 4 , President George W. Bush had the greatest percentage of confirmed circuit court nominees who were nominated more than once prior to being confirmed by the Senate (45.9%). Most recently, during the Obama presidency, the percentage of confirmed circuit court nominees who were nominated more than once prior to being approved by the Senate declined to 36.4% (representing the second-highest percentage of circuit court nominees nominated more than once prior to Senate approval). As shown by Table 5 , the total number of district court nominees who were nominated two or more times prior to final action ranged from a low of 3 (during the George H. W. Bush presidency) to a high of 111 (during the Obama presidency). The number of district court nominees who were nominated more than once and ultimately confirmed by the Senate ranged from a low of 2 (during the George H. W. Bush presidency) to a high of 104 (during the Obama presidency). And the number of nominees who were nominated more than once but not confirmed by the Senate ranged from a low of 1 (during the Carter and George H. W. Bush presidencies) to a high of 9 (during the Clinton presidency). Overall, of the six presidencies listed in Table 5 , President Obama had the greatest percentage of confirmed district court nominees who were nominated more than once prior to being confirmed by the Senate (38.8%). This was an increase from the George W. Bush presidency, when 23.8% of district court nominees were nominated more than once prior to being confirmed (which represents the second-highest percentage of district court nominees nominated more than once prior to Senate approval). Table 6 provides data related to the number of U.S. circuit and district court nominees whose nominations were returned by the Senate to the President at the end of each Congress, from the 95 th through the 115 th . The table also indicates how many of these nominees had been given a hearing (or not) by the Judiciary Committee as well as how many had their nominations reported by the committee and pending on the Executive Calendar prior to being returned to the President. For a Congress that did not coincide with the last two years of a presidency, it was not uncommon for a nominee whose nomination was returned at the end of it to be resubmitted during a subsequent Congress and eventually be approved by the Senate. For a Congress, however, that did coincide with the last two years of a presidency, a nominee whose nomination was returned at the end of it was not confirmed by the Senate. The median number of U.S. circuit court nominees whose nominations were returned to a President at the end of a Congress during this period was 8, while the median number of district court nominees whose nominations were returned at the end of a Congress was 13. For the 13 most recent Congr esses (corresponding to Congresses during the Clinton, George W. Bush, Obama, and Trump presidencies), the median number of circuit court nominees whose nominations were returned to a President at the end of a Congress was 9, while the median number of district court nominations returned was 20. No circuit court nominees had nominations returned at the end of the 95 th Congress (during the Carter presidency) or during the 99 th Congress (during the Reagan presidency). The 106 th Congress, during the Clinton presidency, had the greatest number of circuit court nominees whose nominations were returned at the end of a Congress (17)—followed by the 107 th and 108 th Congresses, both during the George W. Bush presidency, when 15 circuit court nominations were returned at the end of each Congress. The greatest percentage of circuit court nominees who had nominations returned, as a percentage of all nominees who were nominated during a Congress, occurred at the end of the 114 th Congress during the Obama presidency (seven of nine nominations, or 77.8%, were returned). A single district court nominee had a nomination returned at the end of each of the 95 th and 97 th Congresses during the Carter and Reagan presidencies, respectively. The 115 th Congress had the greatest number of district court nominees whose nominations were returned at the end of a Congress (56). The smallest percentage of district court nominees who had nominations returned, as a percentage of all nominees who were nominated during a Congress, occurred at the end of the 97 th Congress, 1981-1982, during the Reagan presidency (1 of 69, or 1.4%, were returned). The greatest percentage of district court nominees who had nominations returned, as a percentage of all nominees who were nominated during a Congress, occurred at the end of the 114 th Congress, 2015-2016, during the Obama presidency (43 of 61 nominations, or 70.5%, were returned). Table 6 does not indicate when, during a Congress, a President submitted nominations to the Senate. If nominations are submitted for the first time relatively late in a Congress, it may not give the Senate adequate time to act on them prior to adjournment. This section provides, for nominees confirmed by the Senate from 1977 through 2018, the median number of days from nomination to confirmation by presidency and by Congress. In general, the length of time from when a President nominates an individual to a vacant circuit or district court judgeship to when the Senate approves that nomination has steadily increased, for most nominees, since 1977. In addition to the general increase in the length of time of the confirmation process itself, an individual nominee might experience a relatively longer period of time from nomination to confirmation due to opposition to the nomination by the nonpresidential party in the Senate; committee and floor scheduling decisions unrelated to partisan opposition to the nomination; and delays in receiving requested background information from the nominee. As shown by Table 7 , the median number of days from nomination to confirmation for U.S. circuit court nominees for completed presidencies ranged from a low of 45.0 days during the Reagan presidency to a high of 229.0 days during the Obama presidency. Following the Reagan presidency, the median number of days from nomination to confirmation increased during each successive completed presidency (increasing to 83.0 days during the George H. W. Bush presidency, 139.0 days during the Clinton presidency, 216.0 days during the George W. Bush presidency, and 229.0 days during the Obama presidency). The first two years of the Trump presidency, with a median of 140.5 days, represent a decline in this trend. If the average, rather than the median, is used to measure the length of time a President's circuit court nominees waited from nomination to confirmation, the average number of days from nomination to confirmation for completed presidencies ranged from a low of 68.7 days during the Reagan presidency to a high of 350.6 days during the George W. Bush presidency. For completed presidencies, the median number of days from nomination to confirmation for U.S. district court nominees ranged from a low of 41.0 days during the Reagan presidency to a high of 215.0 days during the Obama presidency. Following the Reagan presidency, the median number of days from nomination to confirmation increased during each successive completed presidency (increasing to 93.0 days during the George H. W. Bush presidency, 99.0 days during the Clinton presidency, 141.0 days during the George W. Bush presidency, and to 215.0 days during the Obama presidency). The first two years of the Trump presidency, with a median of 235.0 days, represented a continuation of this upward trend. Figure 1 shows, for each U.S. circuit court nominee who was confirmed from 1977 through 2018, the number of days from when that individual was first nominated to when he or she was confirmed by the Senate. The particular circuit court nominee who waited the longest period of time from nomination to confirmation is also labeled for each presidency. As shown by the figure, there was a notable increase after the George H. W. Bush presidency in the number of nominees who waited one year or more from nomination to confirmation. During the Carter, Reagan, and George H. W. Bush presidencies, no circuit court nominees waited 365 days or more to be confirmed. During the Clinton presidency, there were 12 circuit court nominees who waited one year or more to be confirmed. The number of circuit court nominees who waited at least 365 days to be confirmed increased further, to a high of 18, during the George W. Bush presidency. During the Obama presidency, there were 8 circuit court nominees who waited at least one year to be confirmed. During the first two years of the Trump presidency, none of the 30 circuit court nominees whose nominations were confirmed by the Senate waited at least 365 days to be confirmed. Overall, 18% of President Clinton's circuit court nominees waited at least 365 days to be confirmed, 30% of President George W. Bush's nominees waited at least this long (the highest among the six completed presidencies), and 15% of President Obama's nominees waited at least 365 days. During the Carter and Reagan presidencies, 47 and 63 circuit court nominees, respectively, waited 90 or fewer days from nomination to confirmation. During the George H. W. Bush presidency, 24 circuit court nominees waited 90 or fewer days to confirmation. President Clinton had 18 circuit court nominees confirmed within 90 days (i.e., within approximately three months) of being nominated, while President George W. Bush had 11 such nominees. President Obama had 2 circuit court nominees confirmed within three months of being nominated (the lowest number among the completed presidencies). During the first two years of the Trump presidency, eight circuit court nominees were confirmed within 90 or fewer days of being nominated. Overall, 84% of President Carter's circuit court nominees were confirmed within 90 days of being nominated. During the Reagan presidency, 76% of circuit court nominees were confirmed within 90 days of nomination, while during the George H. W. Bush presidency 57% of circuit court nominees were confirmed within this time frame. During the Clinton presidency, the percentage of circuit court nominees approved by the Senate within 90 days fell below half of all circuit court nominees confirmed (to 26%). The percentage of nominees confirmed in 90 or fewer days decreased further during both the George W. Bush presidency (to 16%) and the Obama presidency (to 4%, the lowest percentage among the six completed presidencies). During the first two years of the Trump presidency, 27% of circuit court nominees were confirmed within 90 days of being nominated. Figure 2 shows, for each U.S. district court nominee who was confirmed from 1977 through 2018, the number of days from when that individual was first nominated to when he or she was confirmed by the Senate. The particular district court nominee who waited the longest period of time from nomination to confirmation is also labeled for each presidency. As shown by the figure, there was a notable increase after the George H. W. Bush presidency in the number of nominees who waited one year or more from nomination to confirmation. During the Carter and Reagan presidencies, a combined total of five district court nominees waited 365 days or more to be confirmed. No district court nominees during the George H. W. Bush presidency waited 365 or more days from nomination to confirmation. During the Clinton presidency, there were 14 district court nominees who waited one year or more to be confirmed. The number of district court nominees who waited at least 365 days to be confirmed increased further, to a high of 17, during the George W. Bush presidency. During the Obama presidency, there were 16 district court nominees who waited at least 365 days to be confirmed (which was the second highest among the completed presidencies). During the first two years of the Trump presidency, there were six district court nominees who waited at least 365 days from nomination to confirmation. Overall, 5% of President Clinton's district court nominees waited at least 365 days to be confirmed, 7% of President George W. Bush's nominees waited at least this long, and 6% of President Obama's nominees waited at least 365 days. During the first two years of the Trump presidency, 11% of district court nominees waited at least 365 days from nomination to confirmation. During the Carter and Reagan presidencies, 157 and 234 district court nominees, respectively, waited 90 or fewer days from nomination to confirmation. During the George H. W. Bush presidency, 72 district court nominees waited 90 or fewer days to confirmation. President Clinton had 129 district court nominees confirmed within 90 days (i.e., within approximately three months) of being nominated, while President George W. Bush had 41 such nominees. President Obama had five district court nominees, the fewest of any completed presidency, confirmed within three months of being nominated. During the first two years of the Trump presidency, two district court nominees were confirmed within 90 or fewer days of being nominated. Overall, 78% of President Carter's district court nominees were confirmed within 90 days of being nominated. During the Reagan presidency, 81% of district court nominees were confirmed within 90 days of nomination, while during the George H. W. Bush presidency 49% of district nominees were confirmed within this time frame. During the Clinton and George W. Bush presidencies, the percentage of district court nominees approved by the Senate within 90 days declined further to 42% and 16%, respectively. During the Obama presidency, the percentage of nominees confirmed in 90 or fewer days was 2% (the lowest percentage of the completed presidencies). During the first two years of the Trump presidency, 4% of district court nominees were confirmed within 90 days of being nominated. Table 8 reports the median number of days from nomination to confirmation for U.S. circuit and district court nominees whose nominations were approved by the Senate from the 95 th Congress through the 115 th Congress. For circuit court nominees, the median number of days from nomination to confirmation ranged from a low of 28.0 days during the 97 th Congress (1981-1982) to a high of 331.0 days during the 114 th Congress (2015-2016). The second-shortest median number of days from nomination to confirmation was 29.0 days during the 95 th Congress (1977-1978), while the second-highest median number of days was 281.5 days during the 109 th Congress (2005-2006). The median number of days from nomination to confirmation for U.S. circuit court nominees stayed above 200 days from the 106 th through 114 th Congresses. In contrast, for the 115 th Congress, the median number of days from nomination to confirmation (140.5 days, or 4.6 months) declined to its lowest point since the 103 rd Congress. If the average, rather than the median, is used to measure the length of time circuit court nominees waited from nomination to confirmation, the average number of days from nomination to confirmation ranged from a low of 32.6 days during the 95 th Congress to a high of 562.9 days during the 109 th Congress. Additionally, the average time from nomination to confirmation for U.S. circuit court nominees increases by more than 30 days, relative to the median, for the 106 th Congress (to 373.9 days); 105 th Congress (303.1 days); 108 th Congress (287.2 days); 113 th Congress (281.2 days); and 110 th Congress (268.8 days). For U.S. district court nominees, the median number of days from nomination to confirmation ranged from a low of 26.0 days during the 98 th Congress (1983-1984) to a high of 299.5 days during the 114 th Congress (2015-2016). The second-shortest median was 30.0 days during the 97 th Congress (1981-1982), while the second-longest median was 235.0 days during the 115 th Congress (2017-2018). The median number of days from nomination to confirmation during the 115 th Congress was the fourth consecutive Congress for which the median wait time from nomination to confirmation for district court nominees was greater than 200 days. The first Congress during which the median wait time for district court nominees exceeded 200 days was the 112 th Congress (2011-2012). Figure 3 displays the overall trends in the median number of days from nomination to confirmation for U.S. circuit and district court nominees who were confirmed from the 95 th Congress through the 115 th Congress (and also indicates the corresponding presidency for each Congress during this period). For circuit court nominees, the five greatest increases in the number of median days from nomination to confirmation occurred during the 114 th Congress (an increase of 102.0 days from the 113 th Congress); the 109 th Congress (an increase of 80.5 days from the 108 th Congress); 100 th Congress (an increase of 73.0 days from the 99 th Congress); 104 th Congress (an increase of 68.0 days from the 103 rd Congress); and the 107 th Congress (an increase of 52.0 days from the 106 th Congress). Most recently, from the 114 th to 115 th Congress, the median number of days from nomination to confirmation for U.S. circuit court nominees declined from 331.0 to 140.5 days. For district court nominees, the five greatest increases in the number of median days from nomination to confirmation occurred during the 114 th Congress (an increase of 96.5 days from the 113 th Congress); 112 th Congress (an increase of 85.0 days from the 111 th Congress); 110 th Congress (an increase of 67.0 days from the 109 th Congress); 100 th Congress (an increase of 57.0 days from the 99 th Congress); and the 102 nd Congress (an increase of 45.5 days from the 101 st Congress). Most recently, from the 114 th to 115 th Congress, the median number of days from nomination to confirmation for U.S. district court nominees declined from 299.5 to 235.0 days. The President customarily transmits a circuit or district court nomination to the Senate in the form of a written nomination message. Once received, the nomination is numbered by the Senate executive clerk, read on the floor, and then immediately referred to the Judiciary Committee. The Judiciary Committee's processing of the nomination typically consists of three phases—a prehearing phase, the holding of a hearing on the nomination, and voting on whether to report the nomination to the Senate. During a hearing on the nomination, lower court nominees engage in a question-and-answer session with members of the Senate Judiciary Committee. The hearing typically is held for more than one judicial nominee at a time. From 1977 through 2018, the median length of time from when an individual was first nominated to a circuit court judgeship to when he or she received a hearing by the Judiciary Committee was 63.0 days (or 2.1 months). During this same period, the median length of time from when an individual was nominated to a district court judgeship to when he or she received a hearing was also 63.0 days. As shown in Table 9 , the median length of time from nomination to committee hearing for circuit and district court nominees has, however, varied across presidencies. For individuals nominated during more recent presidencies, the length of time from nomination to committee hearing has been relatively longer than the median for all nominees from 1977 through 2018. The median number of days from nomination to committee hearing for U.S. circuit court nominees ranged from a low of 23.0 days (during the Reagan presidency) to a high of 154.0 days (during the George W. Bush presidency). For the first two years of the Trump presidency, the median number of days from nomination to hearing for U.S. circuit court nominees was 69.0 days. The median number of days from nomination to committee hearing for U.S. district court nominees ranged from a low of 22.0 days (during the Reagan presidency) to a high of 87.5 days (during the George W. Bush presidency). For the first two years of the Trump presidency, the median number of days from nomination to hearing for U.S. district court nominees was 77.0 days. After a nominee receives a hearing by the Judiciary Committee, she awaits a vote by the committee on whether her nomination will be reported to the Senate as a whole. If the nomination is not put to the committee for a vote, or if the committee votes against reporting it (i.e., rejects the nomination), the nomination will not move forward, ultimately failing to receive Senate confirmation. The committee, in reporting a nomination to the Senate as a whole, has three options—to report a nomination favorably, unfavorably, or without recommendation. Almost always, when the committee votes on a nomination, it votes to report favorably. The committee, however, may vote (as it has done in the past, but only on rare occasions) to report unfavorably or without recommendation. Such a vote advances the nomination for Senate consideration despite the lack of majority support for it in committee. After it is reported by the Judiciary Committee, a circuit or district court nomination is listed on the Executive Calendar and is eligible for floor consideration. The nominees who are included in this part of the analysis all had their nominations reported by the Judiciary Committee (i.e., their nominations advanced to the full Senate for consideration) and were confirmed by the Senate. From 1977 through 2018, the median length of time from when an individual who was nominated to a circuit court judgeship had his nomination reported by the Judiciary Committee to when he was confirmed by the Senate was 9.0 days. During this same period, the median length of time from when a district court nominee had his nomination reported to when he was confirmed was 8.0 days. There was, however, variation during this period across presidencies in how long circuit and district court nominees waited to be confirmed once their nominations were reported by the Judiciary Committee—with nominees during more recent presidencies waiting longer to be confirmed once their nominations were reported by the committee. As shown by Table 10 , for completed presidencies, the median number of days from committee report to confirmation for U.S. circuit court nominees ranged from a low of 1.0 day (during the George H. W. Bush presidency) to a high of 98.0 days (during the Obama presidency). For the first two years of the Trump presidency, the median number of days from committee report to confirmation was 26.0 days. For completed presidencies, the median number of days from committee report to confirmation for U.S. district court nominees ranged from a low of 1.0 day (during the George H. W. Bush presidency) to a high of 84.0 days (during the Obama presidency). For the first two years of the Trump presidency, the median number of days from committee report to confirmation for U.S. district court nominees was 133.0 days. Since 1953, every presidential Administration, except those of George W. Bush and Donald Trump, has sought prenomination evaluations of its candidates for district and circuit court judgeships by the American Bar Association (ABA). The committee that performs this evaluation, the ABA's Standing Committee on the Federal Judiciary, is made up of 15 lawyers with various professional experiences. The stated objective of the committee is to assist the White House in assessing whether prospective judicial nominees should be nominated. It seeks to do so by providing what it describes as an "impartial peer-review evaluation" of each candidate's professional qualifications. This evaluation, according to the committee, focuses strictly on a candidate's "integrity, professional competence and judicial temperament" and does not take into account the candidate's "philosophy, political affiliation or ideology." In evaluating professional competence, the committee assesses the prospective nominee's "intellectual capacity, judgment, writing and analytical abilities, knowledge of the law, and breadth of professional experience." Following the multistep evaluation process by the committee, a nominee is given an official rating of "well qualified," "qualified," or "not qualified." A rating is provided strictly on an advisory basis; it is solely in the President's discretion as to how much weight to place on a judicial candidate's ABA rating in deciding whether to nominate him or her. As shown by Table 11 , there is some variation across presidencies in the percentage of confirmed U.S. circuit and district court nominees who received a particular rating by the ABA. For U.S. circuit court nominees for completed presidencies, the percentage who received a well qualified rating ranged from a low of 56.6% during the Reagan presidency to a high of 80.0% during the Obama presidency. During the first two years of the Trump presidency, 80.0% of confirmed circuit court nominees also received a well qualified rating. None of the completed presidencies listed in the table had any confirmed circuit court nominees who were rated as not qualified by the ABA. During the first two years of the Trump presidency, two circuit court nominees were rated as not qualified (comprising 6.7% of the circuit court nominees confirmed during this period). For confirmed U.S. district court nominees, the percentage who received a well qualified rating ranged from a low of 51.0% during the Carter presidency to a high of 69.3% during the George W. Bush presidency. During the first two years of the Trump presidency, 62.3% of confirmed district court nominees received a well qualified rating. For completed presidencies during which at least one confirmed district court nominee was rated as not qualified, the percentage of nominees who received such a rating ranged from a high of 1.5% of all confirmed nominees during the Carter and George W. Bush presidencies to a low of 1.3% of such nominees during the Clinton presidency. During the first two years of the Trump presidency, 3.8% of confirmed district court nominees received a rating of not qualified. The Senate may confirm nominations by unanimous consent, voice vote, or by recorded roll call vote. When the question of whether to confirm a nomination is put to the Senate, a roll call vote will be taken on the nomination if the Senate has ordered "the yeas and nays." The support of 11 Senators is necessary to order the roll call. Historically, the Senate confirmed most U.S. circuit and district court nominations by unanimous consent or by voice vote. As shown by Figure 4 , however, using roll call votes to confirm nominees has become much more common during recent presidencies. A relatively small percentage of circuit court nominees were confirmed by roll call vote during the Carter, Reagan, and George H. W. Bush presidencies. Specifically, 7.1%, 6.0%, and 2.4% of circuit court nominees were confirmed by roll call during each of these three presidencies, respectively. Additionally, only one district court nominee was confirmed by roll call vote during each of the Carter and Reagan presidencies, and no district court nominees were confirmed by roll call vote during George H. W. Bush's presidency. Confirmation by roll call vote became more common during the Clinton presidency, with nearly one-quarter, 24.6%, of circuit court nominees and 10.5% of district court nominees receiving roll call votes at the time of Senate confirmation. It was not, however, until the George W. Bush presidency that a majority of lower court nominees were approved using roll call votes, with 80.3% of circuit court nominees and 54.0% of district court nominees confirmed in this way. This trend continued under President Obama, with 89.1% of circuit court nominees and 64.6% of district court nominees being confirmed by roll call vote. During the first two years of the Trump presidency, all U.S. circuit court nominees were confirmed using roll call votes, representing an increase from recent years in the frequency of using roll call votes to confirm circuit court nominees. In contrast, 50.9% of district court nominees were confirmed by roll call vote, representing a decrease from recent years in the frequency of using roll call votes to confirm district court nominees. The increased frequency with which roll call votes have been used to confirm U.S. circuit and district court nominations has not always been correlated with Senators using roll call votes to express opposition to a nominee by voting against his or her nomination. As shown by Figure 5 , there is notable variation in the number of nay votes received by circuit and district court nominations when they have been confirmed by roll call vote. The figure shows the number of nominations that received zero nay votes at the time of confirmation. For nominations that received at least one nay vote, the roll call data are presented using five ranges to reflect the number of nay votes received by a President's nominees: (1) 1 to 10 nay votes; (2) 11 to 20 nay votes; (3) 21 to 30 nay votes; (4) 31 to 40 nay votes; and (5) more than 40 nay votes. During the Clinton presidency, 12 (75.0%) of 16 circuit court nominees who were confirmed by roll call vote received at least one nay vote (with 9, or 56.2%, receiving more than 20 nay votes). Of the 32 district court nominees who were confirmed by roll call vote, 18 (56.2%) received at least one nay vote. In contrast to the Clinton presidency, a majority of the circuit and district court nominees approved by roll call vote during the George W. Bush and Obama presidencies were confirmed after having received zero nay votes. During the Bush presidency, 30 (61.2%) of 49 circuit court nominees confirmed by roll call votes received zero nay votes. For the 141 district court nominees confirmed by roll call vote, 136 (96.4%) received zero nay votes. During the Obama presidency, 26 (53.1%) of 49 circuit court nominees confirmed by roll call vote received zero nay votes. For the 173 district court nominees confirmed by roll call vote, 95 (54.9%) received zero nay votes. During the first two years of the Trump presidency, 18 (60.0%) of 30 circuit court nominees approved by roll call vote were confirmed with more than 40 nay votes. In contrast, 2 (6.7%) were confirmed with zero nay votes. For district court nominees, 17 (63.0%) of 27 confirmed by roll call vote received at least one nay vote (while 10, or 37.0%, received zero nay votes). Of the 17 who received at least one nay vote, a plurality (5, or 29.4%) received more than 40 nay votes. This section provides data related to the gender and race of U.S. circuit and district court nominees confirmed by the Senate during each presidency since the Carter Administration. These particular demographic characteristics of judicial nominees are of ongoing interest to Congress. Such interest is demonstrated especially at the time circuit and district court nominations are considered by the Senate. For example, floor statements by Senators in support of circuit or district court nominees frequently emphasize the particular demographic characteristics of nominees who would enhance the diversity of the federal judiciary. As shown by Figure 6 , for completed presidencies, the percentage of confirmed U.S. circuit court nominees who were women ranged from a low of 7.2% during the Reagan presidency to a high of 43.6% during the Obama presidency. For district court nominees, the percentage of confirmed nominees who were women ranged from a low of 8.3% during the Reagan presidency to a high of 41.0% during the Obama presidency. During the first two years of the Trump presidency, 20.0% of confirmed U.S. circuit court nominees were women, while 26.4% of confirmed district court nominees were women. Figure 7 shows the percentage of each President's confirmed U.S. circuit and district court nominees who were African American, Asian American, Hispanic, and white. For completed presidencies, the percentage of confirmed U.S. circuit court nominees who were African American ranged from a low of 1.2% during the Reagan presidency to a high of 16.4% during the Obama presidency. During the first two years of the Trump presidency, no confirmed circuit court nominees were African American. For completed presidencies, the percentage of confirmed U.S. district court nominees who were African American ranged from a low of 2.1% during the Reagan presidency to a high of 18.7% during the Obama presidency. During the first two years of the Trump presidency, 1.9% of confirmed district court nominees were African American. For completed presidencies, there were no Asian American circuit court judges appointed during the Reagan, George H. W. Bush, or George W. Bush presidencies. The greatest percentage was appointed during the Obama presidency (7.3%). During the first two years of the Trump presidency, 10.0% of confirmed circuit court nominees were Asian American. For past presidencies, there were no Asian American district court judges appointed during the George H. W. Bush presidency. The greatest percentage was appointed during the Obama presidency (5.2%). During the first two years of the Trump presidency, 3.8% of confirmed district court nominees were Asian American. For completed presidencies, the percentage of confirmed U.S. circuit court nominees who were Hispanic ranged from a low of 1.2% during the Reagan presidency to a high of 10.9% during the Obama presidency. During the first two years of the Trump presidency, no confirmed circuit court nominees were Hispanic. For completed presidencies, the percentage of confirmed U.S. district court nominees who were Hispanic ranged from a low of 4.1% during the George H. W. Bush presidency to a high of 10.3% during the George W. Bush presidency. During the first two years of the Trump presidency, 1.9% of confirmed district court nominees were Hispanic.
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In recent decades, the process for appointing judges to the U.S. circuit courts of appeals and the U.S. district courts has been of continuing Senate interest. The President and the Senate share responsibility for making these appointments. Pursuant to the Constitution's Appointments Clause, the President nominates persons to fill federal judgeships, with the appointment of each nominee also requiring Senate confirmation. Although not mentioned in the Constitution, an important role is also played midway in the appointment process by the Senate Judiciary Committee. The statistics presented in this report reflect congressional interest in issues related to the confirmation process for lower federal court nominees. Statistics are provided for each stage of the nomination and confirmation process—from the frequency of judicial vacancies that require a presidential nomination for a judgeship to be filled to the frequency of roll call votes (rather than the use of unanimous consent or voice votes) to confirm judicial nominees. Statistics are also provided related to the length of the confirmation process itself. Additional statistics provided relate to the demographic characteristics of circuit and district court nominees confirmed by the Senate. The period covered by the report, 1977 through 2018, includes every Administration from the Carter presidency to the first two years of the Trump presidency. This period also includes every Congress from the 95th (1977-1978) through the 115th (2017-2018). Because the statistics presented for the Trump presidency are for the first two years of his Administration (while statistics for other presidencies reflect each President's entire Administration, whether four or eight years), the statistics presented for the Trump presidency may be different at the conclusion of his Administration. This report will be next updated by CRS at the conclusion of the 116th Congress.
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This report provides background information and issues for Congress on multiyear procurement (MYP) and block buy contracting (BBC), which are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by a few or several percent. Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP; and whether the Coast Guard should begin making use of MYP and BBC. Congress's decisions on these issues could affect defense acquisition practices, defense funding requirements, and the defense industrial base. A contract that the Air Force has for the procurement of Evolved Expendable Launch Vehicle (EELV) Launch Services (ELS) has sometimes been referred to as a block buy, but it is not an example of block buy contracting as discussed in this report. The Air Force in this instance is using the term block buy to mean something different. This report does not discuss the ELS contract. (For additional discussion, see " Terminology Alert: Block Buy Contracting vs. Block Buys " below.) In discussing MYP, BBC, and incremental funding, it can be helpful to distinguish contracting mechanisms from funding approaches. The two are often mixed together in discussions of DOD acquisition, sometimes leading to confusion. Stated briefly Funding approaches are ways that Congress can appropriate funding for weapon procurement programs, so that DOD can then put them under contract. Examples of funding approaches include traditional full funding (the standard or default approach), incremental funding, and advance appropriations. Any of these funding approaches might make use of advance procurement (AP) funding. Contracting mechanisms are ways for DOD to contract for the procurement of weapons systems, once funding for those systems has been appropriated by Congress. Examples of contracting mechanisms include annual contracting (the standard or default DOD approach), MYP, and BBC. Contracting mechanisms can materially change the total procurement cost of a ship. The use of a particular funding approach in a defense acquisition program does not dictate the use of a particular contracting mechanism. Defense acquisition programs consequently can be implemented using various combinations of funding approaches and contracting mechanisms. Most DOD weapon acquisition programs use a combination of traditional full funding and annual contracting. A few programs, particularly certain Navy shipbuilding programs, use incremental funding as their funding approach. A limited number of DOD programs use MYP as their contracting approach, and to date three Navy shipbuilding programs have used BBC as their contracting approach. The situation is summarized in Table 1 . This report focuses on the contracting approaches of MYP and BBC and how they compare to annual contracting. Other CRS reports discuss the funding approaches of traditional full funding, incremental funding, and advance appropriations. What is MYP, and how does it differ from annual contracting? MYP, also known as multiyear contracting, is an alternative to the standard or default DOD approach of annual contracting. Under annual contracting, DOD uses one or more contracts for each year's worth of procurement of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years' worth of procurement of a given kind of item, without having to exercise a contract option for each year after the first year. DOD needs congressional approval for each use of MYP. To illustrate the basic difference between MYP and annual contracting, consider a hypothetical DOD program to procure 20 single-engine aircraft of a certain kind over the 5-year period FY2018-FY2022, at a rate of 4 aircraft per year: Under annual contracting , DOD would issue one or more contracts for each year's procurement of four aircraft. After Congress funds the procurement of the first four aircraft in FY2018, DOD would issue one or more contracts (or exercise a contract option) for those four aircraft. The next year, after Congress funds the procurement of the next four aircraft in FY2019, DOD would issue one or more contracts (or exercise a contract option) for those four aircraft, and so on. Under MYP , DOD would issue one contract covering all 20 aircraft to be procured during the 5-year period FY2018-FY2022. DOD would award this contract in FY2018, at the beginning of the five-year period, following congressional approval to use MYP for the program, and congressional appropriation of the FY2018 funding for the program. To continue the implementation of the contract over the next four years, DOD would request the FY2019 funding for the program as part of DOD's proposed FY2019 budget, the FY2020 funding as part of DOD's proposed FY2020 budget, and so on. How much can MYP save? Compared with estimated costs under annual contracting, estimated savings for programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on the particulars of the program in question, with many estimates falling in the range of 5% to 10%. In practice, actual savings from using MYP rather than annual contracting can be difficult to observe or verify because of cost growth during the execution of the contract that was caused by developments independent of the use of MYP rather than annual contracting. A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD) states that "MYP savings analysis is difficult due to the lack of actual costs on the alternative acquisition path, i.e., the path not taken." The briefing states that CAPE up to that point had assessed MYP savings for four aircraft procurement programs—F/A-18E/F strike fighters, H-60 helicopters, V-22 tilt-rotor aircraft, and CH-47F helicopters—and that CAPE's assessed savings ranged from 2% to 8%. A 2008 Government Accountability Office (GAO) report stated that DOD does not have a formal mechanism for tracking multiyear results against original expectations and makes few efforts to validate whether actual savings were achieved by multiyear procurement. It does not maintain comprehensive central records and historical information that could be used to enhance oversight and knowledge about multiyear performance to inform and improve future multiyear procurement (MYP) candidates. DOD and defense research centers officials said it is difficult to assess results because of the lack of historical information on multiyear contracts, comparable annual costs, and the dynamic acquisition environment. How does MYP potentially save money? Compared to annual contracting, using MYP can in principle reduce the cost of the weapons being procured in two primary ways: Contractor optimization of workforce and production facilities . An MYP contract gives the contractor (e.g., an airplane manufacturer or shipbuilder) confidence that a multiyear stream of business of a known volume will very likely materialize. This confidence can permit the contractor to make investments in the firm's workforce and production facilities that are intended to optimize the facility for the production of the items being procured under the contract. Such investments can include payments for retaining or training workers, or for building, expanding, or modernizing production facilities. Under annual contracting, the manufacturer might not have enough confidence about its future stream of business to make these kinds of investments, or might be unable to convince its parent firm to finance them. E conomic order quan tity (EOQ) purchases of selected long-leadtime components. Under an MYP contract, DOD is permitted to bring forward selected key components of the items to be procured under the contract and to purchase the components in batch form during the first year or two of the contract. In the hypothetical example introduced earlier, using MYP could permit DOD to purchase, say, the 20 engines for the 20 aircraft in the first year or two of the 5-year contract. Procuring selected components in this manner under an MYP contract is called an economic order quantity (EOQ) purchase. EOQ purchases can reduce the procurement cost of the weapons being procured under the MYP contract by allowing the manufacturers of components to take maximum advantage of production economies of scale that are possible with batch orders. What gives the contractor confidence that the multiyear stream of business will materialize? At least two things give the contractor confidence that DOD will not terminate an MYP contract and that the multiyear stream of business consequently will materialize: For a program to qualify for MYP, DOD must certify, among other things, that the minimum need for the items to be purchased is expected to remain substantially unchanged during the contract in terms of production rate, procurement rate, and total quantities. Perhaps more important to the contractor, MYP contracts include a cancellation penalty intended to reimburse a contractor for costs that the contractor has incurred (i.e., investments the contractor has made) in anticipation of the work covered under the MYP contract. The undesirability of paying a cancellation penalty acts as a disincentive for the government against canceling the contract. (And if the contract is canceled, the cancellation penalty helps to make the contractor whole.) Is there a permanent statute governing MYP contracting? There is a permanent statute governing MYP contracting—10 U.S.C. 2306b. The statute was created by Section 909 of the FY1982 Department of Defense Authorization Act ( S. 815 / P.L. 97-86 of December 1, 1981), revised and reorganized by Section 1022 of the Federal Acquisition Streamlining Act of 1994 ( S. 1587 / P.L. 103-355 of October 13, 1994), and further amended on several occasions since. For the text of 10 U.S.C. 2306b, see Appendix A . DOD's use of MYP contracting is further governed by DOD acquisition regulations. Under this statute, what criteria must a program meet to qualify for MYP? 10 U.S.C. 2306b(a) states that to qualify for MYP, a program must meet several criteria, including the following: Significant savings. DOD must estimate that using an MYP contract would result in "significant savings" compared with using annual contracting. Realistic cost estimates . DOD's estimates of the cost of the MYP contract and the anticipated savings must be realistic. Stable need for the items. DOD must expect that its minimum need for the items will remain substantially unchanged during the contract in terms of production rate, procurement rate, and total quantities. Stable design for the items . The design for the items to be acquired must be stable, and the technical risks associated with the items must not be excessive. 10 U.S.C. includes provisions requiring the Secretary of Defense or certain other DOD officials to find, determine, or certify that these and other statutory requirements for using MYP contracts have been met, and provisions requiring the heads of DOD agencies to provide written notifications of certain things to the congressional defense committees 30 days before awarding or initiating an MYP contract, or 10 days before terminating one. 10 U.S.C. 2306b also requires DOD MYP contracts to be fixed-price type contracts. What is meant by " significant savings"? The amount of savings required under 10 U.S.C. 2306b to qualify for using an MYP contract has changed over time; the requirement was changed from "substantial savings" to "significant savings" by Section 811 of the FY2016 National Defense Authorization Act ( S. 1356 / P.L. 114-92 of November 25, 2015). The joint explanatory statement for the FY2016 National Defense Authorization Act states the following regarding Section 811: Amendment relating to multiyear contract authority for acquisition of property (sec. 811) The House bill contained a provision (sec. 806) that would strike the existing requirement that the head of an agency must determine that substantial savings would be achieved before entering into a multiyear contract. The Senate amendment contained no similar provision. The Senate recedes with an amendment that would require that significant savings would be achieved before entering into a multiyear contract. The conferees agree that the government should seek to maximize savings whenever it pursues multiyear procurement. However, the conferees also agree that significant savings (estimated to be greater than $250.0 million), and other benefits, may be achieved even if it does not equate to a minimum of 10 percent savings over the cost of an annual contract. The conferees expect a request for authority to enter into a multiyear contract will include (1) the estimated cost savings, (2) the minimum quantity needed, (3) confirmation that the design is stable and the technical risks are not excessive, and (4) any other rationale for entering into such a contract. In addition, 10 U.S.C. 2306b states the following: If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that significant savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program. Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions. What is meant by "stable design"? The term "stable design" is generally understood to mean that the design for the items to be procured is not expected to change substantially during the period of the contract. Having a stable design is generally demonstrated by having already built at least a few items to that design (or in the case of a shipbuilding program, at least one ship to that design) and concluding, through testing and operation of those items, that the design does not require any substantial changes during the period of the contract. What happens if Congress does not provide the annual funding requested by DOD to continue the implementation of the contract? If Congress does not provide the funding requested by DOD to continue the implementation of an MYP contract, DOD would be required to renegotiate, suspend, or terminate the contract. Terminating the contract could require the government to pay a cancellation penalty to the contractor. Renegotiating or suspending the contract could also have a financial impact. What effect does using MYP have on flexibility for making procurement changes? A principal potential disadvantage of using MYP is that it can reduce Congress's and DOD's flexibility for making changes (especially reductions) in procurement programs in future years in response to changing strategic or budgetary circumstances, at least without incurring cancellation penalties. In general, the greater the portion of DOD's procurement account that is executed under MYP contracts, the greater the potential loss of flexibility. The use of MYP for executing some portion of the DOD procurement account means that if policymakers in future years decide to reduce procurement spending below previously planned levels, the spending reduction might fall more heavily on procurement programs that do not use MYP, which in turn might result in a less-than-optimally balanced DOD procurement effort. How does Congress approve the use of MYP? Congress approves the use of MYP on a case-by-case basis, typically in response to requests by DOD. Congressional approval for DOD MYP contracts with a value of more than $500 million must occur in two places: an annual DOD appropriations act and an act other than the annual DOD appropriations act. In annual DOD appropriations acts, the provision permitting the use of MYP for one or more defense acquisition programs is typically included in the title containing general provisions, which typically is Title VIII. As shown in Table B-2 , since FY2011, it has been Section 8010. An annual national defense authorization act (NDAA) is usually the act other than an appropriations act in which provisions granting authority for using MYP contracting on individual defense acquisition programs are included. Such provisions typically occur in Title I of the NDAA, the title covering procurement programs. Provisions in which Congress approves the use of MYP for a particular defense acquisition program may include specific conditions for that program in addition to the requirements and conditions of 10 U.S.C. 2306b. How often is MYP used? MYP is used for a limited number of DOD acquisition programs. As shown in the Appendix B , annual DOD appropriations acts since FY1990 typically have approved the use of MYP for zero to a few DOD programs each year. An August 28, 2017, press report states the following: The Pentagon's portfolio of active multiyear procurement contracts is on track to taper from $10.7 billion in fiscal year 2017—or more than 8 percent of DOD procurement spending—to $1.2 billion by FY-19, according to data recently compiled by the Pentagon comptroller for lawmakers. However, there are potential new block-buy deals in the works, including several large Navy deals. According to the Multiyear Procurement Contracts Report for FY-17, which includes data current as of June 27, seven major defense acquisition programs are being purchased through multiyear procurement contracts, collectively obligating the U.S. government to spend $16 billion across the five-year spending plan with $14.5 billion of the commitments lashed to FY-17 and FY-18. In an interview published on January 13, 2014, Sean Stackley, the Assistant Secretary of the Navy for Research, Development, and Acquisition (i.e., the Navy's acquisition executive), stated the following: What the industrial base clamors for is stability, so they can plan, invest, train their work force. It gives them the ability in working with say, the Street [Wall Street], to better predict their own performance, then meet expectations in the same fashion we try to meet our expectations with the Hill. It's emblematic of stability that we've got more multiyear programs in the Department of the Navy than the rest of the Department of Defense combined. We've been able to harvest from that significant savings, and that has been key to solving some of our budget problems. It's allowed us in certain cases to put the savings right back into other programs tied to requirements. A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD) shows that the total dollar value of DOD MYP contracts has remained more or less stable between FY2000 and FY2012 at roughly $7 billion to $13 billion per year. The briefing shows that since the total size of DOD's procurement budget has increased during this period, the portion of DOD's total procurement budget accounted for by programs using MYP contracts has declined from about 17% in FY2000 to less than 8% in FY2012. The briefing also shows that the Navy makes more use of MYP contracts than does the Army or Air Force, and that the Air Force made very little use of MYP in FY2010-FY2012. A 2008 Government Accountability Office (GAO) report stated the following: Although DOD had been entering into multiyear contracts on a limited basis prior to the 1980s, the Department of Defense Authorization Act, [for fiscal year] 1982, codified the authority for DOD to procure on a multiyear basis major weapon systems that meet certain criteria. Since that time, DOD has annually submitted various weapon systems as multiyear procurement candidates for congressional authorization. Over the past 25 years, Congress has authorized the use of multiyear procurement for approximately 140 acquisition programs, including some systems approved more than once. What is BBC, and how does it compare to MYP? BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC. BBC differs from MYP in the following ways: There is no permanent statute governing the use of BBC. There is no requirement that BBC be approved in both a DOD appropriations act and an act other than a DOD appropriations act. Programs being considered for BBC do not need to meet any legal criteria to qualify for BBC because there is no permanent statute governing the use of BBC that establishes such criteria. A BBC contract can cover more than five years of planned procurements. The BBC contracts that were used by the Navy for procuring Littoral Combat Ships (LCSs), for example, covered a period of seven years (FY2010-FY2016). Economic order quantity (EOQ) authority does not come automatically as part of BBC authority because there is no permanent statute governing the use of BBC that includes EOQ authority as an automatic feature. To provide EOQ authority as part of a BBC contract, the provision granting authority for using BBC in a program may need to state explicitly that the authority to use BBC includes the authority to use EOQ. BBC contracts are less likely to include cancellation penalties. Given the one key similarity between BBC and MYP (the use of a single contract for more than one year's worth of procurement), and the various differences between BBC and MYP, BBC might be thought of as a less formal stepchild of MYP. When and why was BBC invented? BBC was invented by Section 121(b) of the FY1998 National Defense Authorization Act ( H.R. 1119 / P.L. 105-85 of November 18, 1997), which granted the Navy the authority to use a single contract for the procurement of the first four Virginia (SSN-774) class attack submarines. The 4 boats were scheduled to be procured during the 5-year period FY1998-FY2002 in annual quantities of 1-1-0-1-1. Congress provided the authority granted in Section 121(b) at least in part to reduce the combined procurement cost of the four submarines. Using MYP was not an option for the Virginia-class program at that time because the Navy had not even begun, let alone finished, construction of the first Virginia-class submarine, and consequently could not demonstrate that it had a stable design for the program. When Section 121(b) was enacted, there was no name for the contracting authority it provided. The term block buy contracting came into use later, when observers needed a term to refer to the kind of contracting authority that Congress authorized in Section 121(b). As discussed in the next section, this can cause confusion, because the term block buy was already being used in discussions of DOD acquisition to refer to something else. What's the difference between block buy cont r acting and block buys? In discussions of defense procurement, the term "block buy" by itself (without "contracting" at the end) is sometimes used to refer to something quite different from block buy contracting—namely, the simple act of funding the procurement of more than one copy of an item in a single year, particularly when no more than one item of that kind might normally be funded in a single year. For example, when Congress funded the procurement of two aircraft carriers in FY1983, and another two in FY1988, these acts were each referred to as block buys, because aircraft carriers are normally procured one at a time, several years apart from one another. This alternate meaning of the term block buy predates by many years the emergence of the term block buy contracting. The term block buy is still used in this alternate manner, which can lead to confusion in discussions of defense procurement. For example, for FY2017, the Air Force requested funding for procuring five Evolved Expendable Launch Vehicles (EELVs) for its EELV Launch Services (ELS) program. At the same time, Navy officials sometimes refer to the use of block buy contracts for the first four Virginia-class submarines, and in the LCS program, as block buys, when they might be more specifically referred to as instances of block buy contract ing . How much can BBC save, compared with MYP? BBC can reduce the unit procurement costs of ships by amounts less than or perhaps comparable to those of MYP, if the authority granted for using BBC explicitly includes authority for making economic order quantity (EOQ) purchases of components. If the authority granted for using BBC does not explicitly include authority for making EOQ purchases, then the savings from BBC will be less. Potential savings under BBC might also be less than those under MYP if the BBC contract does not include a cancellation penalty, or includes one that is more limited than typically found in an MYP contract, because this might give the contractor less confidence than would be the case under an MYP contract that the future stream of business will materialize as planned, which in turn might reduce the amount of money the contractor invests to optimize its workforce and production facilities for producing the items to be procured under the contract. How frequently has BBC been used? Since its use at the start of the Virginia-class program, BBC has been used very rarely. The Navy did not use it again in a shipbuilding program until December 2010, when it awarded two block buy contracts, each covering 10 LCSs to be procured over the six-year period FY2010-FY2015, to the two LCS builders. (Each contract was later amended to include an 11 th ship in FY2016, making for a total of 22 ships under the two contracts.) A third example is the John Lewis (TAO-205) class oiler program, in which the Navy is using a block buy contract to procure the first six ships in the program. A fourth example, arguably, is the Air Force's KC-46 aerial refueling tanker program, which is employing a fixed price incentive fee (FPIF) development contract that includes a "back end" commitment to procure certain minimum numbers of KC-46s in certain fiscal years. When might BBC be suitable as an alternative to MYP? BBC might be particularly suitable as an alternative to MYP in cases where using a multiyear contract can reduce costs, but the program in question cannot meet all the statutory criteria needed to qualify for MYP. As shown in the case of the first four Virginia-class boats, this can occur at or near the start of a procurement program, when design stability has not been demonstrated through the production of at least a few of the items to be procured (or, for a shipbuilding program, at least one ship). What i s the difference between an MYP or block buy contract and a contract with options? The military services sometimes use contracts with options to procure multiple copies of an item that are procured over a period of several years. The Navy, for example, used a contract with options to procure Lewis and Clark (TAKE-1) class dry cargo ships that were procured over a period of several years. A contract with options can be viewed as somewhat similar to an MYP or block buy contract in that a single contract is used to procure several years' worth of procurement of a given kind of item. There is, however, a key difference between an MYP or block buy contract and a contract with options: In a contract with options, the service is under no obligation to exercise any of the options, and a service can choose to not exercise an option without having to make a penalty payment to the contractor. In contrast, in an MYP or block buy contract, the service is under an obligation to continue implementing the contract beyond the first year, provided that Congress appropriates the necessary funds. If the service chooses to terminate an MYP or block buy contract, and does so as a termination for government convenience rather than as a termination for contractor default, then the contractor can, under the contract's termination for convenience clause, seek a payment from the government for cost incurred for work that is complete or in process at the time of termination, and may include the cost of some of the investments made in anticipation of the MYP or block buy contract being fully implemented. The contractor can do this even if the MYP or block buy contract does not elsewhere include a provision for a cancellation penalty. As a result of this key difference, although a contract with options looks like a multiyear contract, it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP and BBC. Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP. Should MYP and BBC in the future be used more frequently, less frequently, or about as frequently as they are currently used? Supporters of using MYP and BBC more frequently in the future might argue the following: Since MYP and BBC can reduce procurement costs, making greater use of MYP and BBC can help DOD get more value out of its available procurement funding. This can be particularly important if DOD's budget in real (i.e., inflation-adjusted) terms remains flat or declines in coming years, as many observers anticipate. The risks of using MYP have been reduced by Section 811 of the FY2008 National Defense Authorization Act ( H.R. 4986 / P.L. 110-181 of January 28, 2008), which amended 10 U.S.C. 2306b to strengthen the process for ensuring that programs proposed for MYP meet certain criteria (see " Permanent Statute Governing MYP "). Since the value of MYP contracts equated to less than 8% of DOD's procurement budget in FY2012, compared to about 17% of DOD's procurement budget in FY2000, MYP likely could be used more frequently without exceeding past experience regarding the share of DOD's procurement budget accounted for by MYP contracts. Supporters of using MYP and BBC less frequently in the future, or at least no more frequently than now, might argue the following: Using MYP and BBC more frequently would further reduce Congress's and DOD's flexibility for making changes in DOD procurement programs in future years in response to changing strategic or budgetary circumstances. The risks of reducing flexibility in this regard are increased now because of uncertainties in the current strategic environment and because efforts to reduce federal budget deficits could include reducing DOD spending, which could lead to a reassessment of U.S. defense strategy and associated DOD acquisition programs. Since actual savings from using MYP and BBC rather than annual contracting can be difficult to observe or verify, it is not clear that the financial benefits of using MYP or BBC more frequently in the future would be worth the resulting further reduction in Congress's and DOD's flexibility for making changes in procurement programs in future years in response to changing strategic or budgetary circumstances. Should Congress create a permanent statute to govern the use of BBC, analogous to the permanent statute (10 U.S.C. 2306b) that governs the use of MYP? Supporters of creating a permanent statute to govern the use of BBC might argue the following: Such a statute could encourage greater use of BBC, and thereby increase savings in DOD procurement programs by giving BBC contracting a formal legal standing and by establishing a clear process for DOD program managers to use in assessing whether their programs might be considered suitable for BBC. Such a statute could make BBC more advantageous by including a provision that automatically grants EOQ authority to programs using BBC, as well as provisions establishing qualifying criteria and other conditions intended to reduce the risks of using BBC. Opponents of creating a permanent statute to govern the use of BBC might argue the following: A key advantage of BBC is that it is not governed by a permanent statute. The lack of such a statute gives DOD and Congress full flexibility in determining when and how to use BBC for programs that may not qualify for MYP, but for which a multiyear contract of some kind might produce substantial savings. Such a statute could encourage DOD program managers to pursue their programs using BBC rather than MYP. This could reduce discipline in DOD multiyear contracting if the qualifying criteria in the BBC statute are less demanding than the qualifying criteria in 10 U.S.C. 2306b. Should the Coast Guard should begin making use of MYP and BBC? Although the Coast Guard is part of the Department of Homeland Security (DHS), the Coast Guard is a military service and a branch of the U.S. Armed Forces at all times (14 U.S.C. 1), and 10 U.S.C. 2306b provides authority for using MYP not only to DOD, but also to the Coast Guard (and the National Aeronautics and Space Administration as well). In addition, Section 311 of the Frank LoBiondo Coast Guard Authorization Act of 2018 ( S. 140 / P.L. 115-282 of December 4, 2018) provides permanent authority for the Coast Guard to use block buy contracting with EOQ purchases of components in its major acquisition programs. The authority is now codified at 14 U.S.C. 1137. As discussed earlier in this report, the Navy in recent years has made extensive use of MYP and BBC in its ship and aircraft acquisition programs, reducing the collective costs of those programs, the Navy estimates, by billions of dollars. The Coast Guard, like the Navy, procures ships and aircraft. In contrast to the Navy, however, the Coast Guard has never used MYP or BBC in its ship or aircraft acquisition programs. Instead, the Coast has tended to use contracts with options. As discussed earlier, although a contract with options looks like a multiyear contract, it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP and BBC. CRS in recent years has testified and reported on the possibility of using BBC or MYP in Coast Guard ship acquisition programs, particularly the Coast Guard's 25-ship Offshore Patrol Cutter (OPC) program and the Coast Guard's three-ship polar icebreaker program. CRS estimates that using multiyear contracting rather than contracts with options for the entire 25-ship OPC program could reduce the cost of the OPC program by about $1 billion. The OPC program is the Coast Guard's top-priority acquisition program, and it represents a once-in-a-generation opportunity to reduce the acquisition cost of a Coast Guard acquisition program by an estimated $1 billion. CRS also estimates that using BBC for a three-ship polar icebreaker program could reduce the cost of that program by upwards of $150 million. The Coast Guard has expressed some interest in using BBC in the polar icebreaker program, but its baseline acquisition strategy for that program, like its current acquisition strategy for the OPC program, is to use a contract with options. As part of its FY2020 budget submission, the Department of Defense is proposing continued funding for implementing several MYP contracts initiated in fiscal years prior to FY2020, but it has not highlighted any requests for authority for new MYP or block buy contracts for major acquisition programs that would begin in FY2020. Appendix A. Text of 10 U.S.C. 2306b The text of 10 U.S.C. 2306b as of April 29, 2019, is as follows: §2306b. Multiyear contracts: acquisition of property (a) In General.-To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following: (1) That the use of such a contract will result in significant savings of the total anticipated costs of carrying out the program through annual contracts. (2) That the minimum need for the property to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities. (3) That there is a reasonable expectation that throughout the contemplated contract period the head of the agency will request funding for the contract at the level required to avoid contract cancellation. (4) That there is a stable design for the property to be acquired and that the technical risks associated with such property are not excessive. (5) That the estimates of both the cost of the contract and the anticipated cost avoidance through the use of a multiyear contract are realistic. (6) In the case of a purchase by the Department of Defense, that the use of such a contract will promote the national security of the United States. (7) In the case of a contract in an amount equal to or greater than $500,000,000, that the conditions required by subparagraphs (C) through (F) of subsection (i)(3) will be met, in accordance with the Secretary's certification and determination under such subsection, by such contract. (b) Regulations.-(1) Each official named in paragraph (2) shall prescribe acquisition regulations for the agency or agencies under the jurisdiction of such official to promote the use of multiyear contracting as authorized by subsection (a) in a manner that will allow the most efficient use of multiyear contracting. (2)(A) The Secretary of Defense shall prescribe the regulations applicable to the Department of Defense. (B) The Secretary of Homeland Security shall prescribe the regulations applicable to the Coast Guard, except that the regulations prescribed by the Secretary of Defense shall apply to the Coast Guard when it is operating as a service in the Navy. (C) The Administrator of the National Aeronautics and Space Administration shall prescribe the regulations applicable to the National Aeronautics and Space Administration. (c) Contract Cancellations.-The regulations may provide for cancellation provisions in multiyear contracts to the extent that such provisions are necessary and in the best interests of the United States. The cancellation provisions may include consideration of both recurring and nonrecurring costs of the contractor associated with the production of the items to be delivered under the contract. (d) Participation by Subcontractors, Vendors, and Suppliers.-In order to broaden the defense industrial base, the regulations shall provide that, to the extent practicable- (1) multiyear contracting under subsection (a) shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, vendors, or suppliers; and (2) upon accrual of any payment or other benefit under such a multiyear contract to any subcontractor, vendor, or supplier company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable. (e) Protection of Existing Authority.-The regulations shall provide that, to the extent practicable, the administration of this section, and of the regulations prescribed under this section, shall not be carried out in a manner to preclude or curtail the existing ability of an agency- (1) to provide for competition in the production of items to be delivered under such a contract; or (2) to provide for termination of a prime contract the performance of which is deficient with respect to cost, quality, or schedule. (f) Cancellation or Termination for Insufficient Funding.-In the event funds are not made available for the continuation of a contract made under this section into a subsequent fiscal year, the contract shall be canceled or terminated. The costs of cancellation or termination may be paid from- (1) appropriations originally available for the performance of the contract concerned; (2) appropriations currently available for procurement of the type of property concerned, and not otherwise obligated; or (3) funds appropriated for those payments. (g) Contract Cancellation Ceilings Exceeding $100,000,000.-(1) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification. (2) In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (1), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall, as part of the certification required by subsection (i)(1)(A),1 give written notification to the congressional defense committees of- (A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned; (B) the extent to which costs of contract cancellation are not included in the budget for the contract; and (C) a financial risk assessment of not including budgeting for costs of contract cancellation. (h) Defense Acquisitions of Weapon Systems.-In the case of the Department of Defense, the authority under subsection (a) includes authority to enter into the following multiyear contracts in accordance with this section: (1) A multiyear contract for the purchase of a weapon system, items and services associated with a weapon system, and logistics support for a weapon system. (2) A multiyear contract for advance procurement of components, parts, and materials necessary to the manufacture of a weapon system, including a multiyear contract for such advance procurement that is entered into in order to achieve economic-lot purchases and more efficient production rates. (i) Defense Acquisitions Specifically Authorized by Law.-(1) In the case of the Department of Defense, a multiyear contract in an amount equal to or greater than $500,000,000 may not be entered into under this section unless the contract is specifically authorized by law in an Act other than an appropriations Act. (2) In submitting a request for a specific authorization by law to carry out a defense acquisition program using multiyear contract authority under this section, the Secretary of Defense shall include in the request the following: (A) A report containing preliminary findings of the agency head required in paragraphs (1) through (6) of subsection (a), together with the basis for such findings. (B) Confirmation that the preliminary findings of the agency head under subparagraph (A) were supported by a preliminary cost analysis performed by the Director of Cost Assessment and Program Evaluation. (3) A multiyear contract may not be entered into under this section for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority unless the Secretary of Defense certifies in writing, not later than 30 days before entry into the contract, that each of the following conditions is satisfied: (A) The Secretary has determined that each of the requirements in paragraphs (1) through (6) of subsection (a) will be met by such contract and has provided the basis for such determination to the congressional defense committees. (B) The Secretary's determination under subparagraph (A) was made after completion of a cost analysis conducted on the basis of section 2334(e)(2) 1 of this title, and the analysis supports the determination. (C) The system being acquired pursuant to such contract has not been determined to have experienced cost growth in excess of the critical cost growth threshold pursuant to section 2433(d) of this title within 5 years prior to the date the Secretary anticipates such contract (or a contract for advance procurement entered into consistent with the authorization for such contract) will be awarded. (D) A sufficient number of end items of the system being acquired under such contract have been delivered at or within the most current estimates of the program acquisition unit cost or procurement unit cost for such system to determine that current estimates of such unit costs are realistic. (E) During the fiscal year in which such contract is to be awarded, sufficient funds will be available to perform the contract in such fiscal year, and the future-years defense program for such fiscal year will include the funding required to execute the program without cancellation. (F) The contract is a fixed price type contract. (G) The proposed multiyear contract provides for production at not less than minimum economic rates given the existing tooling and facilities. (4) If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that significant savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program. Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions. (5)(A) The Secretary may obligate funds for procurement of an end item under a multiyear contract for the purchase of property only for procurement of a complete and usable end item. (B) The Secretary may obligate funds appropriated for any fiscal year for advance procurement under a contract for the purchase of property only for the procurement of those long-lead items necessary in order to meet a planned delivery schedule for complete major end items that are programmed under the contract to be acquired with funds appropriated for a subsequent fiscal year (including an economic order quantity of such long-lead items when authorized by law). (6) The Secretary may make the certification under paragraph (3) notwithstanding the fact that one or more of the conditions of such certification are not met, if the Secretary determines that, due to exceptional circumstances, proceeding with a multiyear contract under this section is in the best interest of the Department of Defense and the Secretary provides the basis for such determination with the certification. (7) The Secretary may not delegate the authority to make the certification under paragraph (3) or the determination under paragraph (6) to an official below the level of Under Secretary of Defense for Acquisition, Technology, and Logistics. (j) Defense Contract Options for Varying Quantities.-The Secretary of Defense may instruct the Secretary of the military department concerned to incorporate into a proposed multiyear contract negotiated priced options for varying the quantities of end items to be procured over the period of the contract. (k) Multiyear Contract Defined.-For the purposes of this section, a multiyear contract is a contract for the purchase of property for more than one, but not more than five, program years. Such a contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds and (if it does so provide) may provide for a cancellation payment to be made to the contractor if such appropriations are not made. (l) Various Additional Requirements With Respect to Multiyear Defense Contracts.-(1)(A) The head of an agency may not initiate a contract described in subparagraph (B) unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract. (B) Subparagraph (A) applies to the following contracts: (i) A multiyear contract- (I) that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract; or (II) that includes an unfunded contingent liability in excess of $20,000,000. (ii) Any contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year. (2) The head of an agency may not initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability. (3) The head of an agency may not initiate a multiyear procurement contract for any system (or component thereof) if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided in an appropriations Act. (4) Each report required by paragraph (5) with respect to a contract (or contract extension) shall contain the following: (A) The amount of total obligational authority under the contract (or contract extension) and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total. (B) The amount of total obligational authority under all multiyear procurements of the agency concerned (determined without regard to the amount of the multiyear contract (or contract extension)) under multiyear contracts in effect at the time the report is submitted and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total. (C) The amount equal to the sum of the amounts under subparagraphs (A) and (B), and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total. (D) The amount of total obligational authority under all Department of Defense multiyear procurements (determined without regard to the amount of the multiyear contract (or contract extension)), including any multiyear contract (or contract extension) that has been authorized by the Congress but not yet entered into, and the percentage that such amount represents of the procurement accounts of the Department of Defense treated in the aggregate. (5) The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract), the value of which would exceed $500,000,000 (when entered into or when extended, as the case may be), until the Secretary of Defense submits to the congressional defense committees a report containing the information described in paragraph (4) with respect to the contract (or contract extension). (6) The head of an agency may not terminate a multiyear procurement contract until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees. (7) The execution of multiyear contracting authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement. (8) This subsection does not apply to the National Aeronautics and Space Administration or to the Coast Guard. (9) In this subsection: (A) The term "applicable procurement account" means, with respect to a multiyear procurement contract (or contract extension), the appropriation account from which payments to execute the contract will be made. (B) The term "agency procurement total" means the procurement accounts of the agency entering into a multiyear procurement contract (or contract extension) treated in the aggregate. (m) Increased Funding and Reprogramming Requests.-Any request for increased funding for the procurement of a major system under a multiyear contract authorized under this section shall be accompanied by an explanation of how the request for increased funding affects the determinations made by the Secretary under subsection (i). Appendix B. Programs Approved for MYP in Annual DOD Appropriations Acts Since FY1990 This appendix presents, in two tables, programs approved for MYP in annual DOD appropriations acts since FY1990. Table B-1 covers FY2011 to the present, and Table B-2 covers FY1990 through FY2010.
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Multiyear procurement (MYP) and block buy contracting (BBC) are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by a few or several percent. Under annual contracting, DOD uses one or more contracts for each year's worth of procurement of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years' worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. DOD needs congressional approval for each use of MYP. There is a permanent statute governing MYP contracting—10 U.S.C. 2306b. Under this statute, a program must meet several criteria to qualify for MYP. Compared with estimated costs under annual contracting, estimated savings for programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on the particulars of the program in question, with many estimates falling in the range of 5% to 10%. In practice, actual savings from using MYP rather than annual contracting can be difficult to observe or verify because of cost growth during the execution of the contract due to changes in the program independent of the use of MYP rather than annual contracting. BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC. BBC differs from MYP in the following ways: There is no permanent statute governing the use of BBC. There is no requirement that BBC be approved in both a DOD appropriations act and an act other than a DOD appropriations act. Programs being considered for BBC do not need to meet any legal criteria to qualify for BBC, because there is no permanent statute governing the use of BBC that establishes such criteria. A BBC contract can cover more than five years of planned procurements. Economic order quantity (EOQ) authority—the authority to bring forward selected key components of the items to be procured under the contract and purchase the components in batch form during the first year or two of the contract—does not come automatically as part of BBC authority because there is no permanent statute governing the use of BBC that includes EOQ authority as an automatic feature. BBC contracts are less likely to include cancellation penalties. Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP; and whether the Coast Guard should begin making use of MYP and BBC.
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The U.S. energy pipeline network is integral to the nation's energy supply and provides vital links to other critical infrastructure, such as power plants, airports, and military bases. These pipelines are geographically widespread, running alternately through remote and densely populated regions—from Arctic Alaska to the Gulf of Mexico and nearly everywhere in between. Because these pipelines carry volatile, flammable, or toxic materials, they have the potential to injure the public, destroy pr operty, and damage the environment. Although they are generally an efficient and comparatively safe means of transport, pipeline systems are nonetheless vulnerable to accidents, operational failure, and malicious attacks. A series of accidents in California, Pennsylvania, and Massachusetts, among other places, have demonstrated this vulnerability and have heightened congressional concern about U.S. pipeline safety. The Department of Energy's first Quadrennial Energy Review (QER), released in 2015, also highlighted pipeline safety as a growing concern for the nation's energy infrastructure. The federal pipeline safety program resides primarily within the Department of Transportation's (DOT's) Pipeline and Hazardous Materials Safety Administration (PHMSA), although its inspection and enforcement activities rely heavily upon partnerships with the states. Together, the federal and state pipeline safety agencies administer a comprehensive set of regulatory authorities which has changed significantly over the last decade and continues to do so. The federal pipeline safety program is authorized through the fiscal year ending September 30, 2019, under the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act; P.L. 114-183 ) signed by President Obama on June 22, 2016. This report reviews the history of federal programs for pipeline safety, discusses significant safety concerns, and summarizes recent developments focusing on key policy issues. It discusses the roles of other federal agencies involved in pipeline safety and security, including their relationship with PHMSA. Although pipeline security is not mainly under PHMSA's jurisdiction, the report examines the agency's past role in pipeline security and its recent activities working on security-related issues with other agencies. The U.S. energy pipeline network is composed of approximately 3 million miles of pipeline transporting natural gas, oil, and hazardous liquids ( Table 1 ). Of the nation's approximately half million miles of long-distance transmission pipeline, roughly 215,000 miles carry hazardous liquids—over two thirds of the nation's crude oil and refined petroleum products, along with other products. The U.S. natural gas pipeline network consists of around 300,000 miles of inter state and intra state transmission. It also contains some 240,000 miles of field and gathering pipeline, which connect gas extraction wells to processing facilities. However, with 7% of gathering lines currently under federal regulation (discussed later in this report), the total mileage of U.S. gathering lines is not known more precisely. Few state agencies collect this information. The natural gas transmission pipelines feed around 2.2 million miles of regional pipelines in some 1,500 local distribution networks serving over 69 million customers. Natural gas pipelines also connect to 152 active liquefied natural gas (LNG) storage sites, as well as underground storage facilities, both of which can augment pipeline gas supplies during peak demand periods. Uncontrolled pipeline releases can result from a variety of causes, including third-party excavation, corrosion, mechanical failure, control system failure, operator error, and malicious acts. Natural forces, such as floods and earthquakes, can also damage pipelines. Taken as a whole, releases from pipelines cause few annual injuries or fatalities compared to other product transportation modes. According to PHMSA statistics, there were, on average, 12 deaths and 66 injuries annually caused by 32 pipeline incidents in all U.S. pipeline systems from 2009 through 2018. After steady decline between 2009 and 2013, the average incident count increased and recently shows no clear trend ( Figure 1 ). A total of 40 serious pipeline incidents was reported for 2018. Apart from injury to people, some accidents may cause environmental damage or other physical impacts, which may be significant, particularly in the case of oil spills or fires. PHMSA requires the reporting of such incidents involving $50,000 or more in total costs, measured in 1984 dollars, highly volatile liquid releases of 5 barrels or more or other liquid releases of 50 barrels or more, or liquid releases resulting in an unintentional fire or explosion. On average there were 260 such "significant" incidents (not involving injury or fatality) per year from 2009 through 2018. As with serious incidents, there is no clear trend for pipeline incidents affecting only the environment or property over the last five years ( Figure 2 ). It should be noted that federally regulated pipeline mileage overall rose approximately 7% over this period; neither the annual statistics for injury nor environmental incidents are adjusted on a per-mile basis. Although pipeline releases have caused relatively few fatalities in absolute numbers, a single pipeline accident can be catastrophic in terms of public safety and environmental damage. Notable pipeline and pipeline-related incidents over the last decade include the following: 2010 ―A pipeline spill in Marshall, MI, released 19,500 barrels of crude oil into a tributary of the Kalamazoo River. 2010 —An explosion caused by a natural gas pipeline in San Bruno, CA, killed 8 people, injured 60 others, and destroyed 37 homes. 2011― An explosion caused by a natural gas pipeline in Allentown, PA, killed 5 people, damaged 50 buildings, and caused 500 people to be evacuated. 2011 ―A pipeline spill near Laurel, MT, released an estimated 1,000 barrels of crude oil into the Yellowstone River. 2012 —An explosion caused by a natural gas pipeline in Springfield, MA, injured 21 people and damaged over a dozen buildings. 2013 —An oil pipeline spill in Mayflower, AK, spilled 5,000 barrels of crude oil in a residential community causing 22 homes to be evacuated. 2014 —An explosion caused by a natural gas distribution pipeline in New York City killed 8 people, injured 50 others, and destroyed two 5-story buildings. 2015 —A pipeline in Santa Barbara County, CA, spilled 3,400 barrels of crude oil, including 500 barrels reaching Refugio State Beach on the Pacific Ocean. 2015 — The Aliso Canyon underground natural gas storage facility in Los Angeles County, CA, released 5.4 billion cubic feet of gas, causing the temporary relocation of over 2,000 households and two schools in Porter Ranch. 2016 —An explosion caused by a natural gas distribution pipeline in Canton, OH, killed one person, injured 11 others, and damaged over 50 buildings. 201 8 —Explosions and fires caused by natural gas distribution pipelines in the Merrimack Valley, MA, killed one person, injured 21 others, damaged 131 structures, and required 30,000 residents to evacuate. Such incidents have generated persistent scrutiny of pipeline regulation and have increased state and community activity related to pipeline safety. Three federal agencies play the most significant roles in the formulation, administration, and oversight of pipeline safety regulations in the United States. As stated above, PHMSA has the primary responsibility for the promulgation and enforcement of federal pipeline safety standards. The Federal Energy Regulatory Commission (FERC) is not operationally involved in pipeline safety but examines safety issues under its siting authority for interstate natural gas pipelines. The National Transportation Safety Board (NTSB) investigates transportation accidents—including pipeline accidents—and issues associated safety recommendations. These agency roles are discussed in the following sections. The Natural Gas Pipeline Safety Act of 1968 (P.L. 90-481) and the Hazardous Liquid Pipeline Act of 1979 ( P.L. 96-129 ) are two of the principal early acts establishing the federal role in pipeline safety. Under both statutes, the Transportation Secretary is given primary authority to regulate key aspects of interstate pipeline safety: design, construction, operation and maintenance, and spill response planning. Pipeline safety regulations are covered in Title 49 of the Code of Federal Regulations . As of March 8, 2019, PHMSA employed 290 full-time equivalent (FTE) staff in its Office of Pipeline Safety (OPS)—including 145 regional inspectors—and in DOT offices outside of OPS that also support pipeline safety functions. Those staff include attorneys, data analysts, information technology specialists, and regulatory specialists required for certain enforcement actions, promulgating regulations, issuing pipeline safety grants, and issuing agreements for pipeline safety research and development. In addition to federal staff, PHMSA's enabling legislation allows the agency to delegate authority to intra state pipeline safety offices, and allows state offices to act as "agents" administering inter state pipeline safety programs (excluding enforcement) for those sections of inter state pipelines within their boundaries. According to the DOT, "PHMSA leans heavily on state inspectors for the vast network of intrastate lines." A few states serve as agents for inspection of interstate pipelines as well. There were approximately 380 state pipeline safety inspectors in 2018. PHMSA's pipeline safety program is funded primarily by user fees assessed on a per-mile basis on each regulated pipeline operator. The agency's total annual budget authority has grown fairly steadily since 2001, with the largest increase in FY2015 ( Figure 3 ). For FY2019, PHMSA's estimated budget authority is approximately $164 million—more than double the agency's budget authority in FY2008 (not adjusted for inflation). The Trump Administration's requested budget authority for PHMSA is approximately $151 million for FY2020, roughly 8% less than the FY2019 budget authority, with proposed reductions primarily in contract programs, research and development, and grants to states. PHMSA uses a variety of strategies to promote compliance with its safety standards. The agency conducts programmatic inspections of management systems, procedures, and processes; conducts physical inspections of facilities and construction projects; investigates safety incidents; and maintains a dialogue with pipeline operators. The agency clarifies its regulatory expectations through published protocols and regulatory orders, guidance manuals, and public meetings. PHMSA relies upon a range of enforcement actions, including administrative actions such as corrective action orders (CAOs) and civil penalties, to ensure that operators correct safety violations and take measures to preclude future safety problems. From 2014 through 2018, PHMSA initiated 943 enforcement actions against pipeline operators. Of these cases, 348 resulted in safety orders to operators. Civil penalties proposed by PHMSA for safety violations during this period totaled approximately $24.2 million. PHMSA also conducts accident investigations and system-wide reviews focusing on high-risk operational or procedural problems and areas of the pipeline near sensitive environmental areas, high-density populations, or navigable waters. Since 1997, PHMSA has increasingly required industry's implementation of "integrity management" programs on pipeline segments near "high consequence areas." Integrity management provides for continual evaluation of pipeline condition; assessment of risks to the pipeline; inspection or testing; data analysis; and follow-up repair; as well as preventive or mitigative actions. High consequence areas (HCAs) include population centers, commercially navigable waters, and environmentally sensitive areas, such as drinking water supplies or ecological reserves. The integrity management approach prioritizes resources to locations of highest consequence rather than applying uniform treatment to the entire pipeline network. PHMSA made integrity management programs mandatory for most oil pipeline operators with 500 or more miles of regulated pipeline as of March 31, 2001 (49 C.F.R. §195). Congress subsequently mandated the expansion of integrity management to natural gas pipelines, along with other significant changes to federal pipeline safety requirements, through a series of agency budget reauthorizations as discussed below. The PIPES Act of 2016 was preceded by a series of periodic pipeline safety statutes, each of which reauthorized funding for PHMSA's pipeline safety program and included other provisions related to PHMSA's authorities, administration, or regulatory activities. On December 12, 2002, President George W. Bush signed into law the Pipeline Safety Improvement Act of 2002 ( P.L. 107-355 ). The act strengthened federal pipeline safety programs, state oversight of pipeline operators, and public education regarding pipeline safety. Among other provisions, P.L. 107-355 required operators of regulated natural gas pipelines in high-consequence areas to conduct risk analysis and implement integrity management programs similar to those required for oil pipelines. The act authorized DOT to order safety actions for pipelines with potential safety problems and increased violation penalties. The act streamlined the permitting process for emergency pipeline restoration by establishing an interagency committee, including the DOT, the Environmental Protection Agency, the Bureau of Land Management, the Federal Energy Regulatory Commission, and other agencies, to ensure coordinated review and permitting of pipeline repairs. The act required DOT to study ways to limit pipeline safety risks from population encroachment and ways to preserve environmental resources in pipeline rights-of-way. P.L. 107-355 also included provisions for public education, grants for community pipeline safety studies, "whistle blower" and other employee protection, employee qualification programs, and mapping data submission. On December 29, 2006, President Bush signed into law the Pipeline Inspection, Protection, Enforcement and Safety Act of 2006 ( P.L. 109-468 ). The main provisions of the act address pipeline damage prevention, integrity management, corrosion control, and enforcement transparency. The act created a national focus on pipeline damage prevention through grants to states for improving damage prevention programs, establishing 811 as the national "call before you dig" one-call telephone number, and giving PHMSA limited "backstop" authority to conduct civil enforcement against one-call violators in states that have failed to conduct such enforcement. The act mandated the promulgation by PHMSA of minimum standards for integrity management programs for natural gas distribution pipelines. It also mandated a review of the adequacy of federal pipeline safety regulations related to internal corrosion control, and required PHMSA to increase the transparency of enforcement actions by issuing monthly summaries, including violation and penalty information, and a mechanism for pipeline operators to make response information available to the public. On January 3, 2012, President Obama signed the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (Pipeline Safety Act, P.L. 112-90 ). The act contains a broad range of provisions addressing pipeline safety. Among the most significant are provisions to increase the number of federal pipeline safety inspectors, require automatic shutoff valves for transmission pipelines, mandate verification of maximum allowable operating pressure for gas transmission pipelines, increase civil penalties for pipeline safety violations, and mandate reviews of diluted bitumen pipeline regulation. Altogether, the act imposed 42 mandates on PHMSA regarding studies, rules, maps, and other elements of the federal pipeline safety program. P.L. 112-90 authorized the federal pipeline safety program through the fiscal year ending September 30, 2015. On June 22, 2016, President Obama signed the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act, P.L. 114-183 ). As noted earlier, the act authorizes the federal pipeline safety program through FY2019. Among its other provisions, the act requires PHMSA to promulgate federal safety standards for underground natural gas storage facilities and grants PHMSA emergency order authority to address urgent "industry-wide safety conditions" without prior notice. The act also requires PHMSA to report regularly on the progress of outstanding statutory mandates, which are discussed later in this report. One area related to pipeline safety not under PHMSA's primary jurisdiction is the siting approval of interstate natural gas pipelines, which is the responsibility of the Federal Energy Regulatory Commission (FERC). Companies building interstate natural gas pipelines must first obtain from FERC certificates of public convenience and necessity. (FERC does not oversee oil pipeline construction.) FERC must also approve the abandonment of gas facility use and services. These approvals may include safety provisions with respect to pipeline routing, safety standards, and other factors. In particular, pipeline and aboveground facilities associated with a proposed pipeline project must be designed in accordance with PHMSA's safety standards regarding material selection and qualification, design requirements, and protection from corrosion. FERC and PHMSA cooperate on pipeline safety-related matters according to a Memorandum of Understanding (MOU) signed in 1993. According to the MOU, PHMSA agrees to promptly alert FERC when safety activities may impact commission responsibilities, notify FERC of major accidents or significant enforcement actions involving pipelines under FERC's jurisdiction, refer to FERC complaints and inquiries by state and local governments and the public about environmental or certificate matters related to FERC-jurisdictional pipelines, and when requested by FERC, review draft mitigation conditions considered by the commission for potential conflicts with PHMSA's regulations. Under the MOU, FERC agrees to promptly alert PHMSA when the commission learns of an existing or potential safety problem involving natural gas transmission facilities, notify PHMSA of future pipeline construction, periodically provide PHMSA with updates to the environmental compliance inspection schedule, and coordinate site inspections, upon request, with PHMSA officials, notify PHMSA when significant safety issues have been raised during the preparation of environmental assessments or environmental impact statements for pipeline projects, and refer to PHMSA complaints and inquiries made by state and local governments and the public involving safety matters related to FERC-jurisdictional pipelines. FERC may also serve as a member of PHMSA's Technical Pipeline Safety Standards Committee which determines whether proposed safety regulations are technically feasible, reasonable, cost-effective, and practicable. In April 2015, FERC issued a policy statement to provide "greater certainty regarding the ability of interstate natural gas pipelines to recover the costs of modernizing their facilities and infrastructure to enhance the efficient and safe operation of their systems." FERC's policy statement was motivated by the commission's expectation that governmental safety and environmental initiatives could soon cause greater safety and reliability costs for interstate gas pipeline systems. The National Transportation Safety Board (NTSB) is an independent federal agency charged with determining the probable cause of transportation incidents—including pipeline releases—and promoting transportation safety. The board's experts investigate significant incidents, develop factual records, and issue safety recommendations to prevent similar events from reoccurring. The NTSB has no statutory authority to regulate transportation, however, and it does not perform cost-benefit analyses of regulatory changes; its safety recommendations to industry or government agencies are not mandatory. Nonetheless, because of the board's strong reputation for thoroughness and objectivity, over 82% of the NTSB's safety recommendations have been implemented across all transportation modes. In the pipeline sector, specifically, the NTSB's safety recommendations have led to changes in pipeline safety regulation regarding one-call systems before excavation ("Call Before You Dig"), use of pipeline internal inspection devices, facility response plan effectiveness, hydrostatic pressure testing of older pipelines, and other pipeline safety improvements. In August 2011, the NTSB issued preliminary findings and recommendations from its investigation of the San Bruno Pipeline incident. The investigation included testimony from pipeline company officials, government agency officials (PHMSA, state, and local), as well as testimony from other pipeline experts and stakeholders. The investigation determined that the pipeline ruptured due to a faulty weld in a pipeline section constructed in 1956. In addition to specifics about the San Bruno incident, the hearing addressed more general pipeline issues, including public awareness initiatives, pipeline technology, and oversight of pipeline safety by federal and state regulators. The NTSB's findings were highly critical of the pipeline operator (Pacific Gas and Electric, PG&E) as well as both the state and federal pipeline safety regulators. The board concluded that "the multiple and recurring deficiencies in PG&E operational practices indicate a systemic problem" with respect to its pipeline safety program. The board further concluded that the pipeline safety regulator within the state of California, failed to detect the inadequacies in PG&E's integrity management program and that the Pipeline and Hazardous Materials Safety Administration integrity management inspection protocols need improvement. Because the Pipeline and Hazardous Materials Safety Administration has not incorporated the use of effective and meaningful metrics as part of its guidance for performance-based management pipeline safety programs, its oversight of state public utility commissions regulating gas transmission and hazardous liquid pipelines could be improved. In an opening statement about the San Bruno incident report, the NTSB chairman summarized the board's findings as "troubling revelations … about a company that exploited weaknesses in a lax system of oversight and government agencies that placed a blind trust in operators to the detriment of public safety." The NTSB's final incident report concluded "that PHMSA's enforcement program and its monitoring of state oversight programs have been weak and have resulted in the lack of effective Federal oversight and state oversight." The NTSB issued 39 recommendations stemming from its San Bruno incident investigation, including 20 recommendations to the Secretary of Transportation and PHMSA. These recommendations included the following: conducting audits to assess the effectiveness of PHMSA's oversight of performance-based pipeline safety programs and state pipeline safety program certification, requiring pipeline operators to provide system-specific information to the emergency response agencies of the communities in which pipelines are located, requiring that automatic shutoff valves or remote control valves be installed in high consequence areas and in class 3 and 4 locations, requiring that all natural gas transmission pipelines constructed before 1970 be subjected to a hydrostatic pressure test that incorporates a pressure spike test, requiring that all natural gas transmission pipelines be configured so as to accommodate internal inspection tools, with priority given to older pipelines, and revising PHMSA's integrity management protocol to incorporate meaningful metrics, set performance goals for pipeline operators, and require operators to regularly assess the effectiveness of their programs using meaningful metrics. In July 2012, the NTSB issued the final report of its investigation of the Marshall, MI, oil pipeline spill. In addition to finding management and operation failures by the pipeline operator, the report was critical of PHMSA for inadequate regulatory requirements and oversight of crack defects in pipelines, inadequate regulatory requirements for emergency response plans, generally, and inadequate review and approval of the response plan for this particular pipeline. The NTSB issued eight recommendations to the Secretary of Transportation and PHMSA, including auditing the business practices of PHMSA's onshore pipeline facility response plan programs, including reviews of response plans and drill programs, to correct deficiencies, allocating sufficient resources to ensure that PHMSA's facility response plan program meets all of the requirements of the Oil Pollution Act of 1990, clarifying and strengthening federal regulation related to the identification and repair of pipeline crack defects, issuing advisory bulletins to all hazardous liquid and natural gas pipeline operators describing the circumstances of the accident in Marshall, asking them to take appropriate action to eliminate similar deficiencies, to identify deficiencies in facility response plans, and to update these plans as necessary, developing requirements for team training of control center staff involved in pipeline operations similar to those used in other transportation modes, strengthening operator qualification requirements, and harmonizing onshore oil pipeline response planning requirements with those of the U.S. Coast Guard and the U.S. Environmental Protection Agency for oil and petroleum products facilities to ensure that operators have adequate resources for worst-case discharges. In October 2018, the NTSB issued a preliminary report of its investigation into the Merrimack Valley natural gas fires and explosions, which affected the communities of Lawrence, Andover, and North Andover, MA. The report concluded, based on an initial investigation, that the natural gas releases were caused by excessive pressure in a local distribution main during a cast iron pipeline replacement project. Due to an erroneous work order, pipeline workers improperly bypassed critical pipeline pressure-sensing lines. Without an accurate sensor signal from the bypassed pipeline segment, the pipeline pressure regulators allowed high-pressure gas into the distribution lines supplying homes and businesses—many of which failed and released natural gas as a result. The NTSB's formal incident investigation continues, so the agency has not yet released a final accident report. However, in response to its initial findings, the NTSB made a preliminary recommendation to the Commonwealth of Massachusetts to eliminate its professional engineer license exemption for public utility work and to require a professional engineer's seal on public utility engineering drawings. The NTSB also made recommendations to the natural gas distribution utility regarding its design and operating practices. It made no recommendations to PHMSA. The NTSB has made recommendations to PHMSA as a result of other pipeline incident investigations. Detailed discussion of NTSB findings and recommendations, including those described above, are publicly available in the NTSB's docket management system. In addition, in January 2015, the NTSB released a safety study examining integrity management of natural gas transmission pipelines in high consequence areas. The study identified several areas of potential safety improvement among such facilities expanding and improving PHMSA guidance to both operators and inspectors for the development, implementation, and inspection of operators' integrity management programs, expanding the use of in-line inspection, especially for intrastate pipelines, eliminating the use of direct assessment as the sole integrity assessment method, evaluating the effectiveness of the approved risk assessment approaches, strengthening aspects of inspector training, developing minimum professional qualification criteria for all personnel involved in integrity management programs, and improving data collection and reporting, including geospatial data. PHMSA maintains a list of NTSB's pipeline safety recommendations directed at the agency which are currently open. As of September 11, 2018, there were 25 open recommendations dating back to 2011. In many cases, NTSB has classified these recommendations as "Open—Acceptable Response" because they are being incorporated satisfactorily in ongoing PHMSA rulemakings, further discussed below. However, a few recommendations are classified as "Open—Unacceptable response," because NTSB is not satisfied with PHMSA's actions to implement them. Pipeline safety and security are distinct issues involving different threats, statutory authorities, and regulatory frameworks. Nonetheless, pipeline safety and security are intertwined in some respects—and PHMSA is involved in both. The Department of Transportation played the leading role in pipeline security through the late 1990s. Presidential Decision Directive 63 (PDD-63), issued during the Clinton Administration, assigned lead responsibility for pipeline security to DOT. These responsibilities fell to the Office of Pipeline Safety, at that time a part of DOT's Research and Special Programs Administration, because the agency was already addressing some elements of pipeline security in its role as safety regulator. The DOT's pipeline (and LNG) safety regulations already included provisions related to physical security, such as requirements to protect surface facilities (e.g., pumping stations) from vandalism and unauthorized entry. Other regulations required continuing surveillance, patrolling pipeline rights-of-way, damage prevention, and emergency procedures. In the early 2000s, OPS conducted a vulnerability assessment to identify critical pipeline facilities and worked with industry groups and state pipeline safety organizations "to assess the industry's readiness to prepare for, withstand and respond to a terrorist attack.... " Together with DOE and state pipeline agencies, OPS promoted the development of consensus standards for security measures tiered to correspond with the five levels of threat warnings issued by the Office of Homeland Security. OPS also developed protocols for inspections of critical facilities to ensure that operators implemented appropriate security practices. To convey emergency information and warnings, OPS established a variety of communication links to key staff at the most critical pipeline facilities throughout the country. OPS also began identifying near-term technology to enhance deterrence, detection, response, and recovery, and began seeking to advance public and private sector planning for response and recovery. On September 5, 2002, OPS circulated formal guidance developed in cooperation with the pipeline industry associations defining the agency's security program recommendations and implementation expectations. This guidance recommended that operators identify critical facilities, develop security plans consistent with prior trade association security guidance, implement these plans, and review them annually. While the guidance was voluntary, OPS expected compliance and informed operators of its intent to begin reviewing security programs and to test their effectiveness. In November 2001, President Bush signed the Aviation and Transportation Security Act ( P.L. 107-71 ) establishing the Transportation Security Administration (TSA) within DOT. According to TSA, the act placed DOT's pipeline security authority (under PDD-63) within TSA. The act specified for TSA a range of duties and powers related to general transportation security, such as intelligence management, threat assessment, mitigation, security measure oversight, and enforcement. On November 25, 2002, President Bush signed the Homeland Security Act of 2002 ( P.L. 107-296 ) creating the Department of Homeland Security (DHS). Among other provisions, the act transferred the Transportation Security Administration from DOT to DHS (§403). On December 17, 2003, President Bush issued Homeland Security Presidential Directive 7 (HSPD-7), clarifying executive agency responsibilities for identifying, prioritizing, and protecting critical infrastructure. HSPD-7 maintained DHS as the lead agency for pipeline security (paragraph 15), and instructed DOT to "collaborate in regulating the transportation of hazardous materials by all modes (including pipelines)" (paragraph 22h). In 2004, the DOT and DHS entered into a memorandum of understanding concerning their respective security roles in all modes of transportation. The MOU notes that DHS has the primary responsibility for transportation security with support from the DOT, and establishes a general framework for cooperation and coordination. The MOU states that "specific tasks and areas of responsibility that are appropriate for cooperation will be documented in annexes ... individually approved and signed by appropriate representatives of DHS and DOT." On August 9, 2006, the departments signed an annex "to delineate clear lines of authority and responsibility and promote communications, efficiency, and nonduplication of effort through cooperation and collaboration between the parties in the area of transportation security." In January 2007, the PHMSA Administrator testified before Congress that the agency had established a joint working group with TSA "to improve interagency coordination on transportation security and safety matters, and to develop and advance plans for improving transportation security," presumably including pipeline security. According to TSA, the working group developed a multiyear action plan specifically delineating roles, responsibilities, resources and actions to execute 11 program elements: identification of critical infrastructure/key resources, and risk assessments; strategic planning; developing regulations and guidelines; conducting inspections and enforcement; providing technical support; sharing information during emergencies; communications; stakeholder relations; research and development; legislative matters; and budgeting. P.L. 109-468 required the DOT Inspector General (IG) to assess the pipeline security actions taken by the DOT in implementing its 2004 MOU with the DHS (§23). The Inspector General published this assessment in May 2008. The IG report stated, PHMSA and TSA have taken initial steps toward formulating an action plan to implement the provisions of the pipeline security annex.... However, further actions need to be taken with a sense of urgency because the current situation is far from an "end state" for enhancing the security of the Nation's pipelines. The report recommended that PHMSA and TSA finalize and execute their security annex action plan, clarify their respective roles, and jointly develop a pipeline security strategy that maximizes the effectiveness of their respective capabilities and efforts. According to TSA, working with PHMSA "improved drastically" after the release of the IG report; the two agencies began to maintain daily contact, share information in a timely manner, and collaborate on security guidelines and incident response planning. Consistent with this assertion, in March 2010, TSA published a Pipeline Security and Incident Recovery Protocol Plan which lays out in detail the separate and cooperative responsibilities of the two agencies with respect to a pipeline security incident. Among other notes, the plan states, DOT has statutory tools that may be useful during a security incident, such as special permits, safety orders, and corrective action orders. DOT/PHMSA also has access to the Regional Emergency Transportation Coordinator (RETCO) Program…. Each RETCO manages regional DOT emergency preparedness and response activities in the assigned region on behalf of the Secretary of Transportation. The plan also refers to the establishment of an Interagency Threat Coordination Committee established by TSA and PHMSA to organize and communicate developing threat information among federal agencies that may have responsibility for pipeline incident response. DOT has continued to cooperate with TSA on pipeline security in recent years. For example, TSA coordinated with DOT and other agencies to address ongoing vandalism and sabotage against critical pipelines by environmental activists in 2016. In April 2016, the Director of TSA's Surface Division testified about her agency's relationship with DOT: TSA and DOT co-chair the Pipeline Government Coordinating Council to facilitate information sharing and coordinate on activities including security assessments, training, and exercises. TSA and DOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) work together to integrate pipeline safety and security priorities, as measures installed by pipeline owners and operators often benefit both safety and security. In December 2016, PHMSA issued an Advisory Bulletin "in coordination with" TSA regarding cybersecurity threats to pipeline Supervisory Control and Data Acquisition (SCADA) systems. In July 2017, the two agencies collaborated on a web-based portal to facilitate sharing sensitive but unclassified incident information among federal agencies with pipeline responsibilities. In February 2018, the Director of TSA's Surface Division again testified about cooperation with PHMSA, stating "TSA works closely with [PHMSA] for incident response and monitoring of pipeline systems," although she did not provide specific examples. The 116 th Congress may focus on several key issues in its continuing oversight of federal pipeline safety and as it considers PHMSA's reauthorization, including incomplete statutory mandates, adequacy of PHMSA staffing, state program oversight, aging pipeline infrastructure, and PHMSA's role in pipeline security. These issues are discussed in the following sections. Congress has used reauthorizations to impose on PHMSA various mandates regarding standards, studies, and other elements of pipeline safety regulation—usually in response to major pipeline accidents. The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 ( P.L. 112-90 ) and the PIPES Act of 2016 ( P.L. 114-183 ) together included 61 such mandates. As of March 5, 2019, according to PHMSA, the agency had completed 34 of 42 mandates under P.L. 112-90 and 16 of 19 mandates under P.L. 114-183 . Some Members of Congress are concerned that major mandates remain unfulfilled years beyond the deadlines specified in statute. They have expressed frustration with PHMSA's failure to fulfill its statutory obligations, arguing that it delays important new regulations, undermines public confidence in pipeline safety, and does not allow Congress to evaluate the effectiveness of prior mandates as it considers PHMSA's next reauthorization. Among the overdue mandates, Congress has focused on several key regulations (rules) with potentially significant impacts on pipeline operations nationwide. This rulemaking would require operators to (1) reconfirm pipeline maximum allowable operating pressure and (2) test the material strength of previously untested gas transmission pipelines in high-consequence areas ( P.L. 112-90 §23(c-d)). The statutory deadline for PHMSA to finalize these two rules was July 3, 2013. The rulemaking also would address the expansion of "integrity management" programs for gas transmission pipelines beyond high-consequence areas ( P.L. 112-90 §5(f)). Integrity management provides for continual evaluation of pipeline condition; assessment of risks; inspection or testing; data analysis; and follow-up repair; as well as preventive or mitigative actions. The deadline for PHMSA to finalize the integrity management provisions was January 3, 2015. The rulemaking also would address the application of existing regulations to currently unregulated gathering lines ( P.L. 112-90 §21(c)). PHMSA issued a Notice of Proposed R ule making incorporating the above provisions, and other requirements, on June 7, 2016. However, PHMSA subsequently decided to split its efforts into three separate rulemakings to facilitate completion. PHMSA anticipates publication of a final rule for the maximum allowable operating pressure and material testing provisions in July 2019. PHMSA anticipates publication of separate final rules for the integrity management provisions and for the gathering line provisions in December 2019. Among other requirements, this rulemaking would require leak detection systems, where practicable, for hazardous liquids (i.e., oil and refined fuel) pipelines and would set standards for leak detection capability ( P.L. 112-90 §8(b)). It also would address the expansion of integrity management for liquids pipelines beyond high-consequence areas ( P.L. 112-90 §5(f)). The deadlines for PHMSA to finalize these rules were, respectively, January 3, 2014, and January 3, 2015. The rulemaking also would require additional integrity assessment measures for certain underwater onshore liquids pipelines ( P.L. 114-183 §25). PHMSA issued a prepublication final rule on January 13, 2017, but withdrew it on January 24, 2017, for further review in compliance with the "Memorandum for the Heads of Executive Departments and Agencies" issued by the White House. PHMSA anticipates publication of a final rule in May 2019 . This rulemaking, which refers to Title 49 of the Code of Federal Regulations, involves requirements for pipeline valve installation and minimum rupture detection standards. These measures are intended to enhance the ability of pipeline operators to quickly stop the flow of a commodity (e.g., oil) in case of an unintended release by installing automatic or remote-controlled valves ( P.L. 112-90 §4). The rulemaking also would outline performance standards for pipeline rupture detection ( P.L. 112-90 §8(b)). The deadline for PHMSA to finalize these rules was January 3, 2014. PHMSA anticipates issuing a proposed rule in August 2019. This rulemaking would set minimum federal safety standards for underground natural gas storage facilities ( P.L. 114-183 §12). The deadline for PHMSA to finalize this rule was June 22, 2018. PHMSA issued an interim final rule on December 19, 2016. However, the agency temporarily suspended certain enforcement actions on June 20, 2017, and re opened the rule to public comment until November 20, 2017. DOT anticipates publishing the final rule in August 2019 . This rulemaking would implement PHMSA's new authority to issue emergency orders, which would apply to all operators and/or pipeline systems to abate an imminent hazard ( P.L. 114-183 §16). The deadline for PHMSA to finalize this rule was March 22, 2017. The agency issued an interim final rule on October 14, 2016. PHMSA anticipates publication of a final rule in March 2019. In response to questions during a 2015 hearing about overdue statutory mandates, a PHMSA official testified that rulemaking delays at that time did not reflect a lack of commitment but rather their complexity, the agency's rulemaking process, and limited staff resources. A 2016 audit report by the DOT Inspector General concluded that PHMSA lacked "sufficient processes, guidance, and oversight for implementing mandates" in a timely manner. On June 21, 2018, the current PHMSA administrator testified that the agency had adequate staffing and funding for its rulemaking activities and was working to streamline the agency's rulemaking process to accelerate finalization of the overdue rules. He stated that PHMSA would prioritize rulemaking in three areas: the safety of hazardous liquid pipelines, the safety of gas transmission and gathering pipelines, and pipeline rupture detection and automatic shutoff valves. The U.S. pipeline safety program employs a combination of federal and state staff to implement and enforce federal pipeline safety regulations. To date, PHMSA has relied heavily on state agencies for pipeline inspections, with over 70% of inspectors being state employees. As the PHMSA administrator remarked in 2018, PHMSA faces a manpower issue. It is obvious that an agency that employs about 536 people cannot oversee 2.7 million miles of pipeline all by itself. In fact, PHMSA makes no attempt to do so. Most actual safety inspections are performed by our state partners. Nonetheless, some in Congress have criticized inspector staffing at PHMSA for being insufficient to cover pipelines under the agency's jurisdiction. In considering PHMSA staff levels, issues of interest have been the number of federal inspectors and the agency's historical use of staff funding. In FY2019, PHMSA is funded for 308 full-time equivalent (FTE) employees in pipeline safety. As noted earlier, PHMSA employed 290 full-time equivalent staff in pipeline safety, including 145 inspectors, as of March 8, 2019. According to PHMSA officials, the agency continues hiring and anticipates employing additional staff in the second half of the fiscal year. While t he President's request ed budget authority for PHMSA's pipeline safety program in FY2020 is less than the FY2019 budget authority , it projects only a small reduction in funded staff . The budget includes an estimate of 306 FTEs for FY2020 , two fewer FTEs than the prior year . According to PHMSA, these two positions , which support pipeline safety data anal ysis and information technology, are to be transferred to DOT's Office of the Chief Information Officer as part of a centralization of all systems and technology within that office. If PHMSA's pipeline safety staffing were to be funded at the level of the President's FY2020 budget request, it would maintain the significant increase in PHMSA staff funding (mostly for inspectors) appropriated since FY2014 ( Figure 4 ). However, to the extent it reduces funding for grants available to the states, it potentially could reduce the number of staff in state pipeline safety agencies. It would also be a step back, in terms of funding, from the long-term expansion of PHMSA's pipeline safety program begun over 20 years ago in response to a series of pipeline accidents, the terrorist attacks of 9/11, implementation of PHMSA's integrity management regulations, and the boom in U.S. shale gas and oil production. PHMSA officials have offered a number of reasons for the persistent shortfall in inspector staffing. These reasons include a scarcity of qualified inspector job applicants, delays in the federal hiring process during which applicants accept other job offers, and PHMSA inspector turnover—especially to pipeline companies, which often hire away PHMSA inspectors for their corporate safety programs. Because PHMSA pipeline inspectors are extensively trained by the agency (typically for two years before being allowed to operate independently), they are highly valued by pipeline operators seeking to comply with federal safety regulations. The agency has stated that it is challenged by industry recruitment of the same candidates it is recruiting, especially with the rapid development of unconventional oil and gas shales, for which the skill sets PHMSA seeks (primarily engineers) have been in high demand. A 2017 DOT Inspector General (IG) report supported PHMSA's assertions about industry-specific hiring challenges and confirmed "a significant gap between private industry and Federal salaries for the types of engineers PHMSA hires." To overcome its pipeline inspector hiring challenges, PHMSA has implemented a "robust recruitment and outreach strategy" that includes certain noncompetitive hiring authorities (e.g., Veterans Employment Opportunities Act) and a fellows program. The agency also has offered recruitment, relocation and retention incentives, and a student loan repayment program. In addition to posting vacancy announcements on USAJOBS, PHMSA has posted job announcements using social media (Twitter and LinkedIn), has conducted outreach to professional organizations and veterans groups, and has attended career fairs and on-campus hiring events. PHMSA states that it has been "working hard to hire and retain inspector staff" but continues to experience staff losses due to an aging workforce and continued difficulty hiring and retaining engineers and technical staff because of competition from the oil and natural gas industry. Although PHMSA has taken concrete actions in recent years to shore up its workforce, there may still be room for improvement. Notably, the IG report concluded in 2017 that PHMSA did "not have a current workforce management plan or fully use retention tools," although the agency had improved how it integrates new employees in the agency. According to the IG, PHMSA concurred with the report's workforce management recommendations and proposed appropriate action plans. On a related issue, a 2018 study by the Government Accountability Office (GAO) reports that "PHMSA has not planned for future workforce needs for interstate pipeline inspections," and, in particular, has not assessed the resources and benefits available from its state partners. The GAO concluded that without this type of forward-looking analysis, "PHMSA cannot proactively plan for future inspection needs to ensure that federal and state resources are in place to provide effective oversight of interstate pipelines." According to GAO, PHMSA has concurred with its recommendation to develop a workforce plan for interstate pipeline inspections. What impact PHMSA's subsequent actions may have on its staff recruitment, retention, and deployment is an open question. One specific remedy PHMSA has pursued in its efforts to recruit pipeline inspectors is to seek direct-hire authority (DHA) from the Office of Personnel Management (OPM). This authority can expedite hiring, for example, by eliminating competitive rating and ranking, or not requiring veterans' preference. OPM can grant DHA to federal agencies in cases of critical hiring need or a severe shortage of candidates. In its 2013 appropriations report, the House Appropriations Committee stated The Committee is aware of several challenges PHMSA faces in hiring pipeline safety inspectors. One such challenge is the delay caused by the federal hiring process, which is compounded by other market dynamics. The Committee encourages the Office of Personnel Management to give strong consideration to PHMSA's request for direct-hire authority for its pipeline safety inspection and enforcement personnel. Such authority may enable PHMSA to increase its personnel to authorized levels and thereby demonstrate the need for additional resources. The same language appears in the committee's 2014 appropriations report. Consistent with the committee's recommendations, PHMSA applied to the OPM for direct-hire authority in April 2015 but was denied. According to PHMSA, the OPM informed agency officials of the denial verbally, but did not provide a formal, written explanation for the denial at the time. In 2016, the PHMSA administrator reiterated the agency's desire for DHA, stating that it "would complement our recruitment efforts by reducing the agency's time to hire from more than 100 days to less than 30 days." P.L. 114-183 did not grant PHMSA direct-hire authority, but did allow the agency to apply to the OPM for it upon identification of a period of macroeconomic and pipeline industry conditions creating difficulty in filling pipeline safety job vacancies (§9b). However, the aforementioned IG report concluded that direct hire authority might not provide PHMSA with the needed tools to recruit staff more effectively. According to the IG, while this authority might speed hiring of new employees, "it is not clear how it alone would resolve long-standing staffing challenges such as competing with a well-paying industry over a limited talent pool." In the wake of several major safety incidents involving facilities under the jurisdiction of state pipeline safety regulators, some state programs have come under scrutiny regarding their overall effectiveness. After the San Bruno pipeline incident, the California state pipeline safety program—which had regulatory responsibility for the pipeline that ruptured—was criticized by the NTSB for its failure to detect the pipeline's problems. The NTSB was also critical of PHMSA's oversight of the state because the agency had not "incorporated the use of effective and meaningful metrics as part of its guidance for performance-based management" of state pipeline safety programs. A 2014 investigation by the DOT Office of Inspector General assessed the effectiveness of PHMSA's state program oversight as recommended by the NTSB. The IG report stated PHMSA's oversight of State pipeline safety programs is not sufficient to ensure States comply with program evaluation requirements and properly use suspension grant funds. Lapses in oversight have resulted in undisclosed safety weaknesses in State programs. The IG report recommended that PHMSA "take actions to further refine its policies and procedures for managing the program, including its guidelines to the States and improve its oversight to ensure States fulfill their role in pipeline safety." The report made seven specific programmatic recommendations to achieve these goals. In its response to a draft version of the IG report, PHMSA officials concurred or partially concurred with all of the IG reports' recommendations, describing actions it had taken to address the IG's concerns. The IG report therefore considered all but two of its recommendations resolved, but urged PHMSA to reconsider and clarify its response to the remaining two recommendations. These recommendations pertained to PHMSA's staffing formula and its annual evaluations of inspection procedures among the states. The Aliso Canyon and Merrimack Valley incidents again focused attention on the oversight and effectiveness of state pipeline safety programs. For example, during the Aliso Canyon incident, PHMSA expressed concern to state regulators about aspects of the state's safety oversight, including its review of historical well records showing facility anomalies and requirements for safety contingency plans to protect workers, the public, and property. A subsequent federal interagency task force concluded that "the practices for monitoring and assessing leaks and leak potential at the Aliso Canyon facility were inadequate to maintain safe operations." In the Merrimack Valley case, state legislators reportedly criticized Massachusetts' pipeline safety regulators for insufficient staffing and inadequate oversight of pipeline facilities. However, PHMSA's annual evaluation of the state's pipeline safety program—conducted the month before the natural gas releases—gave the state program a rating of 97.4 out of 100 maximum points. PHMSA's evaluation did note a shortfall in inspector staffing, which could impact the agency's inspection schedule, and that the state agency was working to hire additional inspectors. In light of these incidents, and the IG's prior recommendations, Congress may reexamine the adequacy of PHMSA's oversight of its state pipeline safety partners. The NTSB listed the safe shipment of hazardous materials by pipeline among its 2019-2020 Most Wanted List of Transportation Safety Improvements , stating "as infrastructure ages, the risk to the public from pipeline ruptures also grows." Likewise, Congress has ongoing concern about the safety of older transmission pipelines—a key factor in San Bruno—and in the replacement of leaky and deteriorating cast iron pipe in natural gas distribution systems—a key factor in Merrimack Valley. The construction work in Merrimack Valley, which led to the natural gas release, was part of a cast iron pipe replacement project. (Age was also a factor in the failure of the well casing which led to the uncontrolled natural gas release at the Aliso Canyon facility.) According to the American Gas Association and other stakeholders, antiquated cast iron pipes in natural gas distribution systems, many over 50 years old, "have long been recognized as warranting attention in terms of management, replacement and/or reconditioning." Old distribution pipes have also been identified as a significant source of methane leakage, which poses safety risks and contributes to U.S. greenhouse gas emissions. In April 2015, then-Secretary of Energy Ernest Moniz reportedly stated that safety and environmental risks from old, leaky distribution lines were "a big issue." Natural gas distribution system operators all have ongoing programs for the replacement of antiquated pipes in their systems, although some are constrained by state regulators who face challenges considering significant rate increases to pay for these upgrades. According to the Department of Energy, the total cost of replacing cast iron and bare steel distribution pipes is approximately $270 billion. Practical barriers, such as urban excavation and disruption of gas supplies, also limit annual replacement. Although the federal role in natural gas distribution systems is limited, because they are under state jurisdiction, there have been prior proposals in Congress and in the QER to provide federal support for the management and replacement of old cast iron pipe. The Pipeline Safety Act mandated a survey (with follow-up every two years thereafter) of pipeline operator progress in adopting and implementing plans for the management and replacement of cast iron pipes (§7(a)). The Merrimack Valley incident may refocus attention on PHMSA's regulation of pipe replacement (currently voluntary), pipeline modernization projects and work packages, older pipeline records, safety management systems, and other issues related to aging pipelines. Congress also may examine the industry's overall progress in addressing the safety of antiquated distribution lines and opportunities for federal support of those efforts. Ongoing physical and cyber threats against the nation's pipelines since passage of the PIPES Act have heightened concerns about the security risks to these pipelines. In a December 2018 study , GAO stated that since the terrorist attacks of September 11, 2001, "new threats to the nation's pipeline systems have evolved to include sabotage by environmental activists and cyber attack or intrusion by nations." Recent oversight of federal pipeline security activities has included discussion of PHMSA's role in pipeline security. While PHMSA reports cooperation with TSA in pipeline security under the terms of the pipeline security annex and subsequent collaboration, questions remain regarding exactly what this cooperation entails and the ongoing roles of the two agencies. Congress has considered in the past whether the TSA-PHMSA pipeline security annex optimally aligns staff resources and capabilities across both agencies to fulfill the nation's overall pipeline safety and security missions. More recently, some in the pipeline industry have questioned PHMSA's focus on, and ongoing commitment to, pipeline security issues, especially in cybersecurity. In the 116 th Congress, the Pipeline and LNG Facility Cybersecurity Preparedness Act ( H.R. 370 , S. 300 ) would require the Secretary of Energy to enhance coordination among "appropriate Federal agencies," state government agencies, and the energy sector in pipeline security; coordinate incident response and recovery; support the development of pipeline cybersecurity applications, technologies, demonstration projects, and training curricula; and provide technical tools for pipeline security. What role PHMSA might play in any future pipeline security initiatives, and what resources it might require to perform that role, may be a consideration for Congress. Both government and industry have taken numerous steps to improve pipeline safety over the last 10 years. In 2016, the Association of Oil Pipe Lines stated that "the oil and natural gas industry is committed to achieving zero incidents throughout our operations." Likewise, the American Gas Association, which represents investor-owned natural gas distribution companies, recently stated that "safety is the core value for America's natural gas utilities." Nonetheless, major oil and natural gas pipeline accidents continue to occur. Both Congress and the NTSB have called for additional regulatory measures to reduce the likelihood of future pipeline accidents. Past PHMSA reauthorizations included expansive pipeline safety mandates, such as requirements for the agency to impose integrity management programs, significantly increase inspector staffing, or regulate underground natural storage. In light of the most recent pipeline accidents or security incidents, Congress may consider new regulatory mandates on PHMSA or may impose new requirements directly on the pipeline industry. However, a number of broad pipeline safety rulemakings and many NTSB recommendations remain outstanding, and others have not been in place for long, so their effectiveness in improving pipeline safety have yet to be determined. As Congress continues its oversight of the federal pipeline safety program, an important focus may be the practical effects of the many changes being made to particular aspects of PHMSA's pipeline safety regulations. In addition to the specific issues highlighted in this report, Congress may assess how the various elements of U.S. pipeline safety activity fit together in the nation's overall strategy to protect the public and the environment. Pipeline safety necessarily involves various groups: federal and state agencies, pipeline associations, large and small pipeline operators, and local communities. Reviewing how these groups work together to achieve common goals could be an overarching concern for Congress.
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The U.S. energy pipeline network is composed of approximately 3 million miles of pipeline transporting natural gas, oil, and other hazardous liquids. Recent incidents in California, Pennsylvania, Massachusetts, and other states have drawn criticism from stakeholders and have raised concerns in Congress about pipeline safety. The Department of Energy's (DOE's) 2015 Quadrennial Energy Review also highlighted pipeline safety as an issue for the nation's energy infrastructure. Recent incident statistics suggest there is opportunity for safety improvement. The federal pipeline safety program is administered by the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), which relies heavily on state partnerships for inspection and enforcement of its regulations. PHMSA's pipeline safety program is authorized through FY2019. For FY2019, PHMSA's estimated budget authority is approximately $164 million—more than double the agency's budget authority in FY2008 (not adjusted for inflation). Much of PHMSA's funding is for inspectors. However, due to private sector competition, the agency faces persistent challenges recruiting and retaining the staff for which it is funded. The Trump Administration's requested budget authority for PHMSA is approximately $151 million for FY2020, roughly 8% less than the FY2019 amount. The request would only slightly reduce PHMSA staffing but proposes cuts in state grants that could impact staffing at state pipeline safety agencies. In the wake of major incidents involving facilities under state jurisdiction, some state programs have come under scrutiny regarding their effectiveness and oversight by PHMSA. Congress has used past reauthorizations to impose various mandates on PHMSA regarding standards, studies, and other elements of pipeline safety regulation. The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (P.L. 112-90) and the PIPES Act of 2016 (P.L. 114-183) together included 61 such mandates. As of March 5, 2019, according to PHMSA, the agency had completed 34 of 42 mandates under P.L. 112-90 and 16 of 19 mandates under P.L. 114-183. PHMSA also has not satisfied a number of safety recommendations from the National Transportation Safety Board (NTSB). Some in Congress are concerned that major mandates and NTSB recommendations remain unfulfilled. The NTSB highlighted aging pipelines as a particular concern in its 2019-2020 Most Wanted List of Transportation Safety Improvements. Likewise, Congress has ongoing interest in the safety of older transmission pipelines and in the replacement of leaky and deteriorating cast iron pipe in natural gas distribution systems. Recent accidents involving older pipelines and related infrastructure may refocus attention on PHMSA's regulation of pipe replacement (currently voluntary), pipeline modernization projects and work packages, older pipeline records, safety management systems, and other issues related to aging pipelines. Ongoing physical and cyber threats against the nation's pipelines since passage of the PIPES Act have heightened concerns about pipeline security risks. Although the Transportation Security Administration (TSA) has the primary statutory authority over pipeline security, pipeline safety and security are intertwined—and PHMSA is involved in both. Under the terms of a 2006 agreement, PHMSA and TSA are directed to work together "to delineate clear lines of authority … in the area of transportation security." While PHMSA reports ongoing cooperation with TSA, questions remain about what this cooperation entails and the ongoing roles of the two agencies. In addition to these specific issues, Congress may assess how the various elements of U.S. pipeline safety and security fit together in the nation's overall approach to protect the public and the environment. This approach involves federal and state agencies, pipeline associations, large and small pipeline operators, and local communities. Reviewing how these various groups work together to achieve common goals could be an overarching consideration for Congress.
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A basic understanding of legislative procedure and processes is essential for congressional staff. Gaining familiarity with the key publications and websites listed in this report will assist congressional staff in obtaining this understanding, as well as providing a bibliography of sources to which staff ma y refer as questions arise in their work Congressional staff can find official overviews and explanatory information on the House's "Legislative Process" website at http://clerk.house.gov/legislative/legprocess.aspx and on the Senate's "Legislative Process" website at http://www.senate.gov/pagelayout/legislative/d_three_sections_with_teasers/process.htm . Reference sources on the rules and procedure of the House and Senate are listed below. Constitution, Jefferson's Manual, and Rules of the House of Representatives . Washington: GPO, 2017. https://www.govinfo.gov/app/collection/hman This publication, often referred to as House Rules and Manual , is prepared for each Congress by the House Parliamentarian and is issued as a House document, most recently for the 115 th Congress as H.Doc. 114-192. It includes the text of the Constitution; the rules of the House and currently relevant portions of Jefferson's Manual of Parliamentary Practice ; a portion of the Congressional Budget Act; and other statutory provisions that operate as procedural rules. Copies are distributed to House offices and are also available from the House Legislative Resource Center. House Practice: A Guide to the Rules, Precedents, and Procedures of the House . Washington: GPO, 2017. https://www.govinfo.gov/content/pkg/GPO-HPRACTICE-115/pdf/GPO-HPRACTICE-115.pdf This one-volume publication prepared by William Holmes Brown and updated by Charles W. Johnson, John V. Sullivan, and Thomas J. Wickham, Jr., all former House Parliamentarians, provides more current summary information on House rules and selected precedents than Procedure in the U.S. House of Representatives (see next entry). Organized alphabetically by topic, it reflects changes in the House rules and procedure adopted as of the 115 th Congress. This publication is sometimes referred to as Brown's. The Office of the House Parliamentarian has a limited number of copies to distribute to House offices upon request. Procedure in the U.S. House of Representatives, 97 th Congress: A Summary of the Modern Precedents and Practices of the House, 86 th Congress-97 th Congress . Washington: GPO, 1982. Frequently referred to as Deschler's Procedure , after a former Parliamentarian of the House, this one-volume work summarizes House procedure and provides a cumulated, condensed version of House precedents from 1959 to 1980. A 1986 supplement, Procedure in the United States House of Representatives: Annotations of the Precedents of the House for the 97 th , 98 th , and 99 th Congresses , covers 1981 through 1986. Both publications are out of print. These one-volume publications are not available on the Internet, but the full text of several related multivolume sets of House precedents— Deschler's Precedents of the U.S. House of Representatives , Cannon's Precedents , and Hinds' Precedents —are all available in the "Precedents of the U.S. House of Representatives" section of the Government Publishing Office's (GPO's) website at https://www.govinfo.gov/collection/precedents-of-the-house?path=/GPO/Precedents%20of%20the%20U.S.%20House%20of%20Representatives . Senate Manual . Washington: GPO, 2014. https://www.govinfo.gov/app/collection/sman This manual, prepared periodically by the Senate Committee on Rules and Administration, contains the standing rules, orders, laws, and resolutions affecting the Senate, as well as copies of historical U.S. documents and selected statistics on the Senate and other government entities. Issued as S.Doc. 1, copies are distributed to Senate offices and are available from the Senate document room. A current edition of just the Standing Rules of the Senate is available on the committee's website at https://www.rules.senate.gov/rules-of-the-senate . Riddick, Floyd M. and Alan S. Frumin. Riddick's Senate Procedure: Precedents and Practices . Washington: GPO, 1992. https://www.govinfo.gov/collection/riddicks-senate-procedure?path=/GPO/Riddick%2527s%20Senate%20Procedure This publication was revised and updated in 1992 by Floyd M. Riddick, who was then the Parliamentarian of the Senate, and published as S.Doc. 101-28. Organized alphabetically by topic, it contains currently applicable rulings by the presiding officer and practices related to Senate procedure. An appendix has suggested forms for various procedures, for example, offering motions or filing conference reports. Some of the most frequently used chapters of Riddick's Senate Procedure are available in an expanded format in the "Electronic Senate Precedents" section of the Senate's WEBSTER intranet site at http://webster.senate.gov/precedents . Senate Cloture Rule . Washington: GPO, 2011. https://www.govinfo.gov/content/pkg/CPRT-112SPRT66046/pdf/CPRT-112SPRT66046.pdf This committee print (S.Prt. 112-31) was prepared for the Senate Committee on Rules and Administration by the Congressional Research Service (CRS). It includes lists of selected filibusters, tables of cloture votes, a legislative history of the cloture rule, and a bibliography. CRS has a limited number of copies available for distribution to offices upon request. Lists of cloture motions and votes from the 65 th Congress (1917-1918) forward are also available on the Senate website at http://www.senate.gov/pagelayout/reference/cloture_motions/clotureCounts.htm . Our American Government . Washington: GPO, 2003. (H.Doc. 108-94) https://www.govinfo.gov/content/pkg/CDOC-108hdoc94/pdf/CDOC-108hdoc94.pdf This revised version of the popular introductory guide is written in a question-and-answer format that covers a broad range of topics dealing with the legislative, executive, and judicial branches of our government. The appendixes contain a glossary of legislative terms and a selective bibliography. Copies of each new edition are distributed to congressional offices. Members of Congress can also obtain printed copies of the current edition from the House Legislative Resource Center and the Senate Document Room. The Constitution of the United States of America As Amended: Unratified Amendments: Analytical Index . Washington: GPO, 2007. (H.Doc. 110-50) https://www.govinfo.gov/content/pkg/CDOC-110hdoc50/pdf/CDOC-110hdoc50.pdf This document contains the text of the Constitution, its amendments, and a useful index to the Constitution and amendments. The Constitution of the United States of America: Analysis and Interpretation . Washington: GPO, 2017. (H.Doc. 112-9) https://www.govinfo.gov/collection/constitution-annotated?path=/GPO/Constitution%20of%20the%20United%20States%20of%20America%253A%20Analysis%20and%20Interpretation . Popularly known as the Constitution Annotated , this document contains legal analysis and interpretation of each section of the U.S. Constitution and is updated regularly by CRS. It is available to congressional staff on the CRS website at http://www.crs.gov/conan/constitutionannotated , and to the public through GPO (see link above). For the public version, the most recent edition is listed at the top of the webpage. Dove, Robert B. Enactment of a Law: Procedural Steps in the Legislative Process. Washington: GPO, 1982. https://www.congress.gov/resources/display/content/Enactment+of+a+Law+-+Learn+About+the+Legislative+Process http://www.senate.gov/legislative/common/briefing/Enactment_law.htm Prepared by Robert B. Dove in 1982, who was then the Senate Parliamentarian, this primer on the legislative process traces procedures used in the Senate and the House of Representatives. No printed copies are available, but it was updated online in 1997. It is available on Congress.gov and on the Senate website. Sullivan, John V. How Our Laws Are Made . Washington: GPO, 2007. (H.Doc. 110-49) https://www.congress.gov/resources/display/content/How+Our+Laws+Are+Made+-+Learn+About+the+Legislative+Process https://www.govinfo.gov/content/pkg/CDOC-110hdoc49/pdf/CDOC-110hdoc49.pdf This pamphlet outlines stages in the legislative process and explains the uses of various publications, which track that process. It is prepared by the Parliamentarian of the House in consultation with the Parliamentarian of the Senate. This guide is updated periodically. Copies of new editions are distributed to congressional offices and can also be obtained from the House Legislative Resource Center and the Senate Document Room. CRS has a variety of resources and services on legislative procedure available to Members of Congress and their staff. The CRS website is available at http://www.crs.gov . Congressional staff may obtain useful CRS materials on the "Legislative Reference Sources" page at http://www.crs.gov/resources/Pages/LegReference-Committees.aspx and legislative procedure from the "Congressional Process, Administration, & Elections" page at http://www.crs.gov/iap/congressional-process-administration-and-elections . The latter page includes short fact sheets on House and Senate procedure as well as materials on the budget process and on congressional oversight. CRS Report 98-812, Amendments Between the Houses: A Brief Overview , by Elizabeth Rybicki and James V. Saturno. CRS Report 98-728, Bills, Resolutions, Nominations, and Treaties: Characteristics, Requirements, and Uses , by Richard S. Beth. CRS Report 98-242, Committee Jurisdiction and Referral in the Senate , by Judy Schneider. CRS Report RS20147, Committee of the Whole: An Introduction , by Judy Schneider. CRS Report RS20794, The Committee System in the U.S. Congress , by Judy Schneider. CRS Report 98-736, Floor Consideration of Conference Reports in the House , by James V. Saturno. CRS Report RS20200, General Debate in Committee of the Whole , by Judy Schneider. CRS Report RL30945, House and Senate Rules of Procedure: A Comparison , by Judy Schneider. CRS Report 98-339, House Committee Hearings: Scheduling and Notification , by Christopher M. Davis. CRS Report 98-175, House Committee Jurisdiction and Referral: Rules and Practice , by Judy Schneider. CRS Report RS20308, House Committee Markups: Commonly Used Motions and Requests , by Judy Schneider. CRS Report 98-309, House Legislative Procedures: Published Sources of Information , by Megan S. Lynch. CRS Report R44001, Introducing a House Bill or Resolution , by Mark J. Oleszek. CRS Report R44195, Introducing a Senate Bill or Resolution , by Mark J. Oleszek. CRS Report 98-721, Introduction to the Federal Budget Process , coordinated by James V. Saturno. CRS Report R42843, Introduction to the Legislative Process in the U.S. Congress , by Valerie Heitshusen. CRS Report 98-425, Invoking Cloture in the Senate , by Christopher M. Davis. CRS Report 95-563, The Legislative Process on the House Floor: An Introduction , by Christopher M. Davis. CRS Report 96-548, The Legislative Process on the Senate Floor: An Introduction , by Valerie Heitshusen. CRS Report RL30787, Parliamentary Reference Sources: House of Representatives , by Richard S. Beth and Megan S. Lynch. CRS Report RL30788, Parliamentary Reference Sources: Senate , by Megan S. Lynch and Richard S. Beth. CRS Report 98-143, Procedural Distinctions Between the House and the Committee of the Whole , by Judy Schneider. CRS Report 98-337, Senate Committee Hearings: Scheduling and Notification , by Valerie Heitshusen. CRS Report 98-308, Senate Legislative Procedures: Published Sources of Information , by Christopher M. Davis. CRS Report 98-612, Special Rules and Options for Regulating the Amending Process , by Megan S. Lynch. CRS Report RS22477, Sponsorship and Cosponsorship of House Bills , by Mark J. Oleszek. CRS Report 98-279, Sponsorship and Cosponsorship of Senate Bills , by Mark J. Oleszek. In addition to legislative procedure material, CRS offers several programs on legislative procedure for congressional staff. Legislative staff can attend Congress: An Introduction to Process and Resources , an introductory CRS program designed for and offered only to permanent, professional congressional staff who seek a foundation for understanding the legislative process and the resources available to monitor it. This CRS program is offered 10 or more times a year and is the prerequisite for the Advanced Legislative Process Institute . More information is available on the CRS website at http://www.crs.gov/Events/TrainingPrograms or by telephone at [phone number scrubbed]. CRS also offers a monthly introductory class, Legislative Concept s , to House staff and interns. Information is available on HouseNet ( http://housenet.house.gov ) under "Campus", then under "Congressional Staff Academy." Legislative staff members are also invited to attend the CRS Budget Process Institutes. The introductory Overview of the Federal Budget Process is offered several times each year and provides an introduction to federal budgeting procedures, particularly procedures used in Congress. The following six advanced institutes are offered during the year at times when they are most relevant to congressional staff: Budget Resolutions and Budget Enforcement Appropriations Process Consideration of Appropriations Bills in the House Consideration of Appropriation Bills in the Senate President and the Budget, and Continuing Resolutions Event dates and registration forms for CRS programs and institutes can be found on the CRS website at http://www.crs.gov/programs/Pages/eventscal.aspx . Congress A to Z. 6 th ed. Washington: CQ Press, 2014. Congress.gov Legislative Glossary. Written by CRS analysts and available to the public at https://www.congress.gov/help/legislative-glossary . Davidson, Roger H., Frances E. Lee, and Walter J. Oleszek. Congress and Its Members . 16 th ed. Washington: CQ Press, 2017. Congressional Quarterly's Guide to Congress. 7 th ed. Washington: CQ Press, 2012. Koempel, Michael L., and Judy Schneider. Congressional Deskbook: the Practical and Comprehensive Guide to Congress. Alexandria, VA: TheCapitol.Net, 2012. Kravitz, Walter. Congressional Quarterly's American Congressional Dictionary. 3 rd ed. Washington, CQ Press, 2001. Available to congressional offices in an updated and expanded edition on the CRS website at https://www.govinfo.gov/app/collection/sman . Oleszek, Walter J., Mark J. Oleszek, Elizabeth Rybicki, and Bill Heniff, Jr. Congressional Procedures and the Policy Process. 10 th ed. Washington: CQ Press, 2016. Tiefer, Charles. Congressional Practice and Procedure: A Reference, Research, and Legislative Guide . New York: Greenwood Publishing Group, 1989. United States Senate Glossary , at https://www.senate.gov/reference/glossary.htm . CRS Video WVB00003, An Act of Congress , by Walter J. Oleszek. A 58 minute video about the enactment of legislation, available at http://www.crs.gov/video/detail/WVB00003 . The Legislative Process video series on Congress.gov. Nine brief video clips explaining the legislative process, written by CRS analysts and available to the public at https://www.congress.gov/legislative-process . Some of the works on legislative procedure listed in this report are produced by GPO and may be obtained through its Congressional Liaison Office at http://www.gpo.gov/congressional/ . Other publications are only available from congressional sources, such as the House and Senate Parliamentarians, for congressional office use, and those listed in the " Supplementary Materials " section may be purchased from bookstores or publishers.
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Written for congressional staff, this report identifies and provides details on how to obtain information on legislative procedures and process in the House and Senate. It provides references to selected CRS products and offers information on the CRS legislative institutes. A listing of selected supplementary materials is also provided. This report will be updated as new information is available.
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South Africa is a majority black, multiracial country of nearly 58 million people. South African President Cyril Ramaphosa was elected by the parliament in February 2018 after his predecessor, Jacob Zuma, resigned. Zuma did so under the threat of a parliamentary no confidence vote after defying a decision by leaders of his African National Congress (ANC) removing him as its national presidential nominee. The ANC, the majority party in parliament, replaced Zuma with then-Vice President Ramaphosa, whom the ANC elected as its leader in late 2017. Zuma had faced intense pressure to step down after years of weak economic growth and multiple corruption scandals under his tenure. Ramaphosa is leading a reform agenda to address these challenges. He is serving out the rest of Zuma's term, which ends in May 2019, and is eligible to run for two additional five-year terms of his own. Local and international expectations of him are high, but he faces diverse fiscal, structural, and political challenges. U.S.-South Africa ties are cordial, based in part on shared democratic values and broad bilateral accord on regional development goals, and the State Department describes South Africa as a strategic U.S partner. U.S. high-level bilateral engagement with South Africa is not, however, as frequent or as multifaceted as that with some other U.S. strategic country partners. South Africa has also not been the focus of substantial congressional legislative attention in recent years. In general, as set out below, South Africa-related congressional activity has mainly focused on U.S. healthcare assistance, trade issues, and consultations during periodic congressional travel to the country. Given South Africa's economic and political influence in Africa and on African and developing country positions in multilateral contexts—which often do not align with those of the United States—some Members of Congress may see a scope for increased congressional and other U.S. engagement with South Africa. There is a large U.S. diplomatic presence in South Africa, which has periodically hosted high-level U.S. leadership visits, including two presidential visits by former President Barack Obama. South Africa has been a top African recipient of U.S. assistance for years. For over a decade, such assistance has centered primarily on healthcare, notably HIV/AIDS-related programs implemented under the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), announced by President George W. Bush in 2003. The United States has also supported South African-implemented development and crisis response activities in other African countries. In 2010, the Obama Administration and the South African government initiated a U.S.-South African Strategic Partnership. While it remains in effect, a biennial dialogue that accompanied the partnership was last held in 2015. The partnership has focused on cooperation in such areas as health, education, food security, law enforcement, trade, investment, and energy, all long-standing U.S. priorities. Since 2014, South Africa has been the largest U.S. trade partner in Africa. South Africa is also a key regional export and investment destination for U.S. firms. South Africa has long enjoyed a significant trade surplus in goods with the United States, but there is a substantial U.S. surplus in trade in services. In general, while U.S.-South African economic ties are positive, trade has been a source of occasional friction. Differences over foreign policy issues also periodically roil ties. South African officials are critical of Israel's policies toward the Palestinians, for instance, and South Africa maintains cordial relations with Iran, a key U.S. adversary. There have also been divergences on other issues, as illustrated by a lack of congruence between South African and U.S. votes in the United Nations, and regarding responses to the crisis in Venezuela. South Africa also opposed the Trump Administration's decision to withdraw the United States from the U.N. Framework Convention on Climate Change, a shift from the general bilateral policy congruence that prevailed on this issue during the Obama Administration. South African officials have periodically made remarks suggesting anti-U.S. biases. Anti-U.S. rhetoric, when it occurs, may be influenced by historic grievances over U.S. policy toward the ANC during the era of apartheid—a codified, state-enforced system of racial segregation and socioeconomic and legal discrimination favoring the white minority that was operational until the early 1990s. During the anti-apartheid struggle, the Reagan Administration categorized the ANC as a terrorist organization and President Reagan vetoed the Comprehensive Anti-Apartheid Act of 1986 ( P.L. 99-440 ). The Reagan Administration had sought to promote change within the apartheid regime—with which it shared anti-communist goals—by engaging it in a dialogue-based approach dubbed "constructive engagement." The Trump Administration has not pursued any major changes in bilateral ties, but in late 2018, President Trump acted to fill the post of U.S. ambassador to South Africa, vacant since late 2016, by nominating South African-born luxury handbag designer Lana Marks to the position. The Senate did not act on her nomination by the end of the 115 th Congress; she was renominated in early 2019. In early 2017, President Trump spoke to President Zuma by telephone on "ways to expand" trade and advance bilateral cooperation in other areas, including counter-terrorism and, according to the South African government, multilateral and African peace and stability issues. No notable new engagement has since occurred, but in August 2018, President Trump sparked controversy in South Africa and among some U.S. observers after posting a tweet on land reform. It stated that the South African Government was "seizing land from white farmers" and referred to "farm seizures and expropriations and the large scale killing of farmers." His comments drew criticism and were questioned on factual and other grounds by U.S. and South African commentators and by the South African government. While the South African government is pursuing efforts to change the constitution to allow for the uncompensated expropriation of land, such expropriation was not underway in 2018. Congress has long played an active role in U.S.-South African relations. This was particularly true during the struggle against apartheid, from the late 1960s until the first universal franchise vote in 1994. Starting in the 1960s, Congress sought to induce democratic change by repeatedly imposing conditions and restrictions on U.S. relations with the apartheid regime. These actions culminated in Congress's passage of the sanctions-focused Comprehensive Anti-Apartheid Act of 1986 ( P.L. 99-440 )—an action that overrode President Reagan's veto. Congressional attention toward South Africa remained strong during its continuing transition over the following decade. In recent years, congressional engagement with South Africa has mainly focused on oversight of foreign aid program—particularly South Africa's relative progress in building its capacity to address its HIV/AIDS crisis and gradually assuming greater responsibility for HIV program financing and implementation, key goals under PEPFAR. Efforts to bolster trade and investment ties with South Africa, as with Africa generally, have also drawn attention in recent congresses. In 2015 and 2016, congressional action, including Congress's mandating of a special review of South Africa's eligibility for U.S. trade benefits, helped to resolve a poultry and meat-related trade dispute. Several Members also sought to reverse the Trump Administration's 2018 application of steel and aluminum tariffs to South Africa, which had raised concerns in the country. No South Africa-centered bills have been introduced in the 116 th Congress, and none were introduced in the 115 th Congress, apart from three commemorative resolutions. Members periodically travel to South Africa to foster such aims as improved bilateral and U.S.-Africa ties and enhanced trade and investment relations. According to the State Department's FY2019 foreign aid budget request, South Africa is a key player for U.S. engagement in Africa and a critical partner to boost U.S. trade and economic growth, improve regional security, and mitigate public health crises. South Africa is the economic and security anchor of the region but grapples with political and socioeconomic challenges, including high-level corruption and poor accountability, a slowing economy, high youth unemployment, critical levels of violent crime, a weak education system, a high rate of HIV/AIDS, water scarcity, and wildlife trafficking. South Africa continues to work with the United States to address the region's social and economic challenges […]. The Trump Administration requested $172.1 million for South Africa for FY2020, a 70.7% decrease relative to the actual FY2018 total of $586.6 million, and a 66.3% decrease relative to the FY2019 requested level of $510.5 million. Aid trends are shown in Figure 1 and Table 1 . Since 1994, South Africa has been a top African recipient of U.S. State Department and U.S. Agency for International Development (USAID) aid, the vast majority devoted to PEPFAR and other health programs, including responses to the tuberculosis epidemic and efforts to end child and maternal deaths. After the enactment of the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( P.L. 108-25 )—which authorized PEPFAR programs and funding—aid rose to nearly $580 million in FY2010. Aid levels then declined to a low of $286 million in FY2014 before rising again, to a peak of nearly $587 million in FY2018. Cumulative FY2004 through FY2018 PEPFAR funding in South Africa totaled $6.26 billion. The Trump Administration proposed to use the bulk of $500 million in requested Global Health Program PEPFAR funds in FY2019 to maintain current levels of HIV/AIDS antiretroviral drug treatment access through support for direct service delivery and treatment services. The State Department has proposed to cut PEPFAR funding by 67.6% in FY2020, to $161.8 million, after issuing sharp criticism of the PEPFAR in South Africa in its FY2019 PEPFAR Country Operational Plan "Planning Level Letter." While praising a number of successes under the U.S. PEPFAR partnership with the South African government and commending efforts to improve the program, the letter, by U.S. Global AIDS Coordinator and U.S. Special Representative for Global Health Diplomacy Deborah L. Birx, took note of "several fundamental problems in PEPFAR's core treatment program in South Africa." The letter stated Despite a significant infusion of resources by the U.S. government especially over the last three years, progress has been grossly sub-optimal and insufficient to reach epidemic control, including the targets of the Surge Plan [an effort to accelerate HIV testing, treatment, and retention]. The PEPFAR program has demonstrated extremely poor performance in ensuring every person who is started on treatment is retained, particularly from FY 2017 to FY 2018 where results have been relatively stagnant at 479,912 to 481,014 respectively, despite an increase in resources. In fact, the PEPFAR program lost more people on treatment than it gained in FY 2018. Across PEPFAR/South Africa programming, FY 2018 overspending and underperformance at the partner level is a program management and oversight issue. [..] The full expenditure of PEPFAR resources without improvement of results is unacceptable. This represents a serious, continued problem and program failure–linkage and retention must improve in South Africa now in COP 2018 implementation. Other recent-year U.S. development aid for South Africa has supported programs focusing on basic education; civil society capacity-building aimed at fostering accountable and responsive governance and public service delivery advocacy, and support for the office of the Public Protector [a public ombudsman; see below]; business-government cooperation in support of development; and support for sexual assault and gender-based-violence victims. The USAID-led, South Africa-based Power Africa initiative also supports energy projects in South Africa and USAID provides indirect credit for small enterprise activity. Through its Africa Private Capital Group, USAID also facilitates development-focused financing, including though efforts to foster local municipal bond and pension fund investment in public goods and services. It has also provided support for development-centered policymaking. USAID also administers the Trilateral Assistance Program (discussed below), under which the United States supports South African foreign aid efforts in Africa. South Africa has served as a "Strategic Partner" under the Feed the Future U.S. global food security and agricultural development initiative by providing agricultural technical assistance to other African countries. South Africa also participates in the joint State Department/USAID Young African Leaders Initiative, which helps develop the leadership skills of young business, civic, and public sector professionals. Most U.S. development assistance programs in South Africa are administered by the State Department or USAID. These agencies sometimes collaborate with and transfer funds to other, technically specialized U.S. agencies, notably the U.S. Centers for Disease Control and Prevention (CDC), which plays a key technical role in PEPFAR implementation. U.S. export promotion agencies also periodically provide loans, credit guarantees, or other financial services to U.S. firms aimed at boosting U.S. exports and fostering development and economic growth. There is a Peace Corps program in South Africa and the small U.S. African Development Agency (USADF) provides a few grants in South Africa. Some project-centered grant aid is also provided to civil society entities, and South Africa periodically benefits from U.S. regional programs focused on such issues as environmental management and trade capacity-building. U.S. trade and export promotion agencies are also active in South Africa. Security cooperation efforts are diverse but are funded at far lower levels than development programs. In FY2017 and prior years, International Narcotics Control and Law Enforcement (INCLE) funds were used for law enforcement and criminal justice technical support. Except in FY2018, Nonproliferation, Antiterrorism, Demining and Related Programs (NADR)-Export Control and Related Border Security (EXBS) funds have supported technical training relating to trade and border control, with a focus on controlling trade in military and dual-use technologies. The International Military Education and Training (IMET) program is long-standing, and in past years Foreign Military Financing (FMF) aid has supported the South African military's capacity to respond to regional crises and participate in peacekeeping. This has included past-year funding technical support and training for U.S.-sourced South African military C-130 aircraft. Since 2005, South Africa has received peacekeeping training under the U.S. Africa Contingency Operations Training and Assistance program (ACOTA), a component of the Global Peace Operations Initiative (GPOI, a multi-country State Department training program) and other U.S. military professionalization programs. South African troops also regularly join their U.S counterparts in military training exercises. There is a South Africa-New York National Guard State Partnership Program, and the U.S. Department of Defense also regularly supports South Africa's biennial African Aerospace Defense Exhibition. South Africa is influential on the African continent due to its investment and political engagement in many African countries and its active role and leadership within the inter-governmental African Union (AU). It also has one of the largest, most diverse and developed economies, and has made substantial progress in spurring post-apartheid socioeconomic transformation. For summary data on the country, see Figure 2 . Many negative socioeconomic effects of apartheid persist, however. Apartheid ended after a tumultuous negotiated transition, between 1990 and 1994, when South Africa introduced a system of universal suffrage and multi-party democracy—after a decades-long struggle by the ANC and other anti-apartheid groups. Following the release of long-imprisoned ANC leader Nelson Mandela and the ANC's legalization in 1990, political dialogue led to an interim constitution in 1993 and elections in 1994, in which Mandela was elected president. Further post-electoral negotiations led to the adoption in 1996 of a new constitution and the creation of the Truth and Reconciliation Commission (TRC, in operation until 2002). The TRC documented crimes and human rights abuses by the apartheid regime and anti-apartheid forces from 1960 until 1994, and oversaw processes of restorative justice, accountability, and assistance for victims of such abuses. It has since served as a model for similar efforts around the world. Mandela died in 2013. The ANC currently holds 249 of 400 National Assembly seats. It has held a parliamentary majority since the first post-apartheid elections in 1994 and, since the National Assembly elects the president, also controlled the executive branch. Successive ANC-led governments have sought to redress the effects of apartheid, notably through efforts to improve the social welfare of the black majority and by promoting a pan-racial, multiethnic national identity. While racial relations have improved, divisions remain; references to race in politics and social media sometimes spur heated debate, and racially motivated criminal acts periodically occur. Despite diverse investments and policies aimed at overcoming the negative effects of apartheid, many of its most damaging socioeconomic effects endure, posing persistent, profound challenges for development and governance. Among these are high levels of poverty, social inequality, and unemployment, as well as unequal access to education, municipal services, and other resources. Such problems disproportionately affect the black population. Racial disparities have gradually declined, but most black South Africans live in poverty and their average per capita incomes are roughly one-sixth as large as those of the historically privileged white minority. Income and consumption distribution are notably unequal. Recent measures suggest the wealthiest top 10% and top 20% in South Africa enjoy the highest share of income of any country. South Africa's GINI coefficient—a measure of income or consumption inequality—is consistently among the highest globally, and is often the highest. There are also significant regional, rural-urban, and intra-racial socioeconomic disparities. Large segments of the poor majority lack access to decent housing and adequate infrastructure services (e.g., electricity and water), especially in rural areas and in the vast, high-density informal settlements surrounding most cities. Known as townships, such settlements are populated mostly by poor black and mixed race "coloured" inhabitants. Lack of legal property ownership sometimes subjects township dwellers to municipal squatter eviction and slum clearance operations. There is also extreme racial disparity in access to land, despite implementation of land redistribution and restitution initiatives since 1994. Under such programs, the state has purchased large amounts of land intended to be transferred to populations that had limited or no ability to own land under the apartheid system—primarily those of black, "coloured" or Indian descent. While, black ownership and other access to land has risen markedly in some provinces since 1994, redistribution and restitution processes have been slow and resulted in les extensive transfers than initially projected. As a result, the small minority white population continues to own over 70% of land nationally. This has spurred growing demands for uncompensated state expropriation of private land and pushed the ANC to pursue an ongoing effort to amend the constitution to permit such expropriation. South Africa also faces a range of other socioeconomic challenges. Labor strikes and unrest are common, particularly in the mining sector. Rates of violent crime—notably murder and rape, along with gender violence more broadly, and gun crime—are high. The causes are diverse. South Africa also faces criminal justice system capacity challenges. Although the country has a relatively well-resourced national police force, there are periodic reports of vigilante mob justice, and police sometimes use heavy-handed, abusive tactics to respond to crime and public unrest. Several police leaders have been implicated in professional misconduct inquiries or corruption. South Africa also faces broad challenges to social cohesion linked to grievances and fractures stemming from socioeconomic inequality and marginalization, social biases, and criminal activity. Examples include periodic xenophobic mob attacks on African immigrants and their businesses, crime-motivated attacks on white farmers, and frequent de facto residential racial and socioeconomic segregation. While many of the poor live in townships, the wealthy, including many whites, often live in gated, highly secured communities. Another key challenge is South Africa's high HIV prevalence. Statistics South Africa, a state agency, estimates that 18.99% of adults were HIV-positive in 2018, up from 2017 (18.88%). Despite this moderate increase, which is partially attributable to increased survival rates due to improved access to anti-retroviral treatment, there has been a steady decline in the annual growth rate of HIV prevalence (total cases) and incidence (new infections). National efforts to counter HIV have received considerable international support, notably under U.S. PEPFAR programs. Citizens' expectations and their demands for rapid socioeconomic transformation have exceeded what the South African state has been able to provide, due to fiscal, technical, and governance shortfalls. Despite large investments in housing, services, infrastructure, and state technical capacities, public goods and services delivery rates and quality have often been inadequate. This has spurred frequent, sometimes violent demonstrations. While known as service protests, they center on many issues, including local public corruption and cronyism, and can have political repercussions. In April 2018, President Ramaphosa cut short an overseas trip to address a spate of interrelated unrest that featured service delivery protests, attacks on foreigners, anger over alleged corruption by the affected province's then-Premier (governor), and clashes between local rival ANC members. In 2015 and 2016, South Africa also experienced mass student protests, some violent, over university education costs and alleged institutional racism in higher education. The current government is implementing a pledge, made just before the end of the Zuma administration, to fund free higher education for the poor and freeze certain other fees. Despite such challenges, and indications of an increased politicization of the state bureaucracy under Zuma, many national state agencies (e.g., the central bank, the statistical agency, the courts, some ministries, and the treasury) possess substantial institutional and technical capacity. South Africa ranked second globally on the International Budget Partnership's 2017 Open Budget Index , a measure of public budget transparency. While some state-owned enterprises (SOE) are struggling to recover from reported mismanagement and malfeasance under Zuma, these entities manage large, sophisticated national transport, telecommunication, energy, and other infrastructure systems. The state also administers a large welfare system that supported about 17.6 million grants as of September 2018 and had a 2017/2018 annual budget of about $10.5 billion. It is viewed by many observers as a key anti-poverty tool, albeit a costly one that is expected to grow in size and expense. Despite its role in helping to reduce extreme poverty, the system's administration has been the subject of considerable controversy in recent years. The ANC party is ideologically leftist, but in practice it has melded pragmatic support for private sector-led growth with state-centric economic planning under what it terms the "developmental state" model. The ANC's political credibility is largely founded on its leading role in the anti-apartheid struggle and its efforts to end South Africa's deep-rooted, enduring social inequalities. It has struggled to build on this legacy, however, amid the country's persistent challenges. Increasingly, voters appear to be judging the ANC on its current performance, and it faces a growing number of opposition parties. Nevertheless, notwithstanding a marginal loss of electoral strength in recent elections, it has maintained its parliamentary dominance. Rivalry within the ANC at the provincial and local levels—often regarding appointments to local state bodies and the selection of slates of delegates to national party decision-making bodies—is often fierce, and numerous cases has led to political assassinations. National Assembly elections take place under a party-list proportional representation system, in which voters select a party and each party allocates its share of elected seats according to an internal party list. As a result, internal ANC politics and leadership selections play a key role in national politics. The most important ANC post is that of party president, since the ANC usually nominates its party leader to serve as national president. The Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) also exert influence within the ANC. They do so through a compact called the Tripartite Alliance, under which the ANC appoints top members of COSATU and the SACP to party leadership and state posts, and the latter organizations do not independently contest elections. The Alliance weakened during Zuma's tenure due to SACP and COSATU criticism of Zuma, intra-COSATU splits linked to the emergence of new unions, and discontent within the ANC's labor constituency. The Democratic Alliance (DA) is the second-largest party in parliament, with 89 of 400 National Assembly seats. The DA has its origins in various historical liberal-leaning party coalitions. For many years, its leaders were predominantly white, but it has built an increasingly strong base among blacks. Now led by a charismatic young black leader, Mmusi Maimane, the DA has often confronted the ANC in parliament, at times in league with the Economic Freedom Fighters (EFF), a populist hard-left party centered on black empowerment. The EFF was formed in 2013 by a former dissident ANC Youth League leader, Julius Malema, and won 25 seats in the 2014 elections, becoming the third-largest party. Malema, a political firebrand, is a former key Zuma supporter who later broke with Zuma. The ANC expelled him in 2012, and he became one of Zuma's most vocal critics, notably regarding corruption—though he and his EFF co-founder have themselves faced corruption allegations. The EFF styles itself as a workers' party and draws its support from socioeconomically marginalized groups (e.g., jobless youth, low-wage workers, and poor communities). The EFF operates as a disruptive force, both in its radical policy proposals and through its often-boisterous obstruction of parliamentary proceedings. The Inkatha Freedom Party, with origins in Zulu-dominated KwaZulu-Natal province, was a fierce ANC rival during the end of the anti-apartheid period. It is now a self-described centrist party and holds 10 seats, making it South Africa's fourth largest political party. The remaining 27 seats are distributed among nine small parties. A key target campaign demographic for all parties is the "Born Free" generation, those born in 1994 or later, who make up roughly 47% of the population and about 14% of the eligible electorate. They share discontent over corruption, public services, and poverty with their older counterparts, and suffer even higher unemployment rates, but they are reportedly less engaged in formal politics and vote at lower rates than older citizens. During Zuma's presidency, both the DA and the EFF, as well as private foundations and NGOs, sought to use the courts as a check on executive power by regularly suing state officials, including Zuma. These suits, relating to alleged executive branch overreach, agency malfeasance, and illicit actions, were often successful. In March 2016, for instance, the Constitutional Court ruled that Zuma had failed to uphold the constitution by defying a binding recommendation by the Public Protector that he partially reimburse the state for the cost of a state-funded upgrade to his private compound, a matter of long-standing controversy. The ruling was used as the basis for a DA impeachment motion against Zuma that failed but was seen as a political blow against Zuma. In a separate case, also brought by the DA, a High Court panel ordered in April 2016 that the National Prosecuting Authority (NPA) review its 2009 decision to dismiss a 1990s arms purchasing corruption case against Zuma (see below). The Zuma administration faced a third legal setback in March 2016, when the Supreme Court of Appeal ruled that the government had unlawfully ignored a court order—and violated local and international law obligations—by not detaining then-Sudanese President Omar Al Bashir when he attended a mid-2015 African Union (AU) summit in South Africa. Bashir faces an International Criminal Court (ICC) arrest warrant. The government subsequently initiated an effort to formally withdraw South Africa as a party to the ICC. This spurred further litigation. In early 2017, a court determined that the withdrawal was unconstitutional. Former Public Protector Thuli Madonsela also repeatedly issued reports that documented alleged acts of malfeasance, non-compliance with laws and regulations, corruption, and operational shortcomings by the executive branch and state agencies under its purview. Her reports also ordered corrective actions. Most notably, in late 2016, she issued State of Capture , a highly critical report centering on Zuma and the Guptas, a family of business owners that reportedly maintained very close and allegedly often corrupt relations with Zuma and a network of his political and business associates (see below). The report alleged that these actors had engaged in extensive high-level state malfeasance, and mandated the establishment of the now-ongoing judicial commission of inquiry. Zuma fought an unsuccessful legal battle to prevent the report's release, claiming that Madonsela had violated his due process rights. The clash was closely watched, as it was seen as a test of Madonsela's transformation of her office into a key independent institutional check on executive power. The parliament elected Ramaphosa national president a day after Zuma's February 2018 resignation. Ramaphosa—an ex-labor leader turned corporate leader, anti-apartheid activist, and former close associate of Nelson Mandela—assumed the post after also narrowly winning a highly contentious late 2017 ANC party leadership election based largely on his pledge to fight corruption and heal the economy. His victory resulted in the defeat of the influential ANC faction linked to Zuma and its favored candidate, Nkosazana Dlamini-Zuma (Zuma's ex-wife and a former government minister and African Union Commission chair). Analysts speculated that if she had been elected, she might have enabled Zuma to remain national president until general elections in 2019 and potentially helped to avert his prosecution for corruption. President Ramaphosa's priorities are to reverse what many observers contend was a marked, extensive deterioration in governance under Zuma and to enhance state agency operational efficacy, especially with regard to state-owned enterprises (SOEs). Another key goal is to spur faster, more inclusive economic growth by stimulating public and private investment in order to create jobs, enhance social services and infrastructure, and expand gross domestic product (GDP). Particular emphases include "transformation" efforts aimed at expanding and equalizing access to economic opportunities, particularly for the black population. Efforts in this vein include small business promotion, preferential state procurement, and actions to boost industrial growth. Additional priorities are reform and growth in mining and trade, along with efforts to attract local and international investment, spur digital sector growth, and expand agricultural production. The Ramaphosa administration backs a proposed constitutional amendment to permit the expropriation of private land without compensation for redistribution to victims of apartheid-era discrimination and land seizures. In early 2018, the parliament provisionally endorsed this goal, which the ANC had adopted as a party policy in late 2017. In late 2018, after holding nationwide hearings, a parliamentary constitutional review committee formally recommended the adoption of this change. Parliament endorsed the recommendation and appointed a committee to craft and introduce the amendment. This effort is highly controversial. It has raised fears that such seizures would primarily target white minority farmers, who own most farmland, and sparked concern that it might cause international investors to question the security of private property ownership in South Africa. Ramaphosa, seeking to dampen such fears, has contended that expropriation would apply mainly in cases involving "unused land, derelict buildings, purely speculative land holdings, or… where occupiers have strong historical rights and title holders do not occupy or use their land, such as labour tenancy, informal settlements and abandoned inner-city buildings." Public Enterprises Minister Pravin Gordhan—who twice served as finance minister under Zuma but clashed fiercely with him—is spearheading efforts to strengthen State-owned enterprise (SOE) governance and efficacy. President Ramaphosa is directly involved in these efforts; in April 2018, he ordered probes into irregularities and mismanagement at two major SOEs: Eskom, the national power utility, and Transnet, a transport and logistics firm. His administration also replaced these SOEs' boards, along with that of Denel, an important but ailing defense sector SOE. In late 2018, Ramaphosa also fired the head of the tax service—a key Zuma ally and Gordhan foe—after earlier suspending him and appointing a commission of inquiry into alleged malfeasance at the agency. A separate parliamentary commission also probed systematic irregularities at Eskom. Broader state investigations into and accountability for an allegedly widespread, deep-seated pattern of alleged corruption and influence peddling under Zuma, known locally as "state capture," also continue to roil politics and draw intense public attention. State capture refers, in particular, to the activities of a network of Zuma-allied ANC and business associates, notably the Guptas, an Indian émigré family that accumulated a range of business holdings after arriving in South Africa in the 1990s. This network allegedly participated in corrupt high-level state-business collusion to influence and even control state enterprises and other agency decisions, contracts, regulatory processes, and fiscal assets to advance their financial and political interests. Ongoing, high-profile hearings by a judicial commission of inquiry into state capture are a key component of such investigations. Several separate commissions of inquiry have also examined or are probing alleged malfeasance at several state agencies and the politicization of state security agencies. Zuma established the judicial commission in early 2018, as ordered by a court, after he had earlier resisted doing so. While its proceedings center on developments during his administration, the matters under consideration remain key issues of current policymaking concern. Witnesses have implicated the Guptas in efforts to influence state agency decisions and top official appointments under Zuma, which the Guptas have denied. The inquiry has revealed evidence of systematic corruption by other actors, notably Bosasa, a public and prison services provider. Its contracts were cancelled and its leaders arrested after hearings in early 2019. To supplement the work of the various commissions of inquiry, in February 2019, President Ramaphosa appointed a special tribunal to fast-track recovery of public assets lost to graft. The hearings could reveal evidence leading to new charges against Zuma and the Guptas, who reportedly fled to Dubai, from where the government tried to extradite them. They could also bring renewed negative attention to the ANC ahead of the 2019 election. The proceedings could also shape the current political environment and undermine Ramaphosa's standing, should members of his administration be implicated in malfeasance. Finance Minister Nhlanhla Nene, a once-reputed anti-Zuma reformer, resigned after testifying to having links to the Guptas. His successor is Tito Mboweni, a business executive and former head of the central bank, whose appointment drew business support. In late 2018, Minister of Home Affairs Malusi Gigaba—a close Zuma ally who was popular within the ANC and whom Ramaphosa had retained—resigned over a perjury accusation and a sex tape scandal. Meanwhile, Zuma is being tried on 16 charges of fraud, corruption, racketeering, and money laundering in a long-running corruption case centering on a 1990s-era state arms deal scandal. Zuma fended off the case for years, allegedly aided by the National Prosecuting Authority (NPA). In March 2018, however, the NPA was forced to reinstate the charges after an appeals court upheld a 2016 High Court ruling that the NPA's dismissal in 2009 of the case against Zuma had been "irrational" and made under political pressure. The trial is likely to proceed for months, including during elections in 2019, with possible implications for the ANC's prospects. The NPA's alleged improper favoritism toward Zuma drew substantial attention, notably under its former Director, Shaun Abrahams, but also under several of his Zuma-appointed predecessors. In August 2018, a court voided Abrahams's appointment in a case linked to litigation over his predecessors' appointments. In late 2018, Ramaphosa appointed Shamila Batohi, a career prosecutor and former International Criminal Court legal adviser, to head the NPA. She is expected to actively pursue state capture and public agency malfeasance cases. Hours prior to Batohi's appointment, the NPA provisionally withdrew a key criminal case against the Guptas. President Ramaphosa took power slightly more than a year prior to South Africa's forthcoming May 2019 elections, which present him with both challenges and opportunities. If his administration can show significant economic and governance improvements, he may be able to consolidate his power within the ANC and unify the now-splintered party. He may also be able to sideline the opposition, as he has arguably already done by appropriating one of their key political themes: fighting corruption within the ANC. Ramaphosa's ability to pursue his agenda, however, may be constrained by divisions within the top tiers of the ANC and a need to cooperate with powerful state and party allies of Zuma, some of whom face corruption allegations. Some of these actors have sought to obstruct his reform efforts and blunt his political prospects. Public anger over poor public services and continuing economic malaise also pose challenges for Ramaphosa. Nevertheless, although some press reports caution that he faces substantial political headwinds, opinion polls and many press accounts suggest that he enjoys substantial popularity. South Africa has the most diversified, industrialized economy in Africa. It also has one of the top-five-highest GDPs per capita ($6,560 in 2018) in sub-Saharan Africa, and is one of very few upper-middle-income countries in the region. As earlier noted, however, income distribution is highly unequal. South Africa is a top producer of mined raw and processed commodities (e.g., platinum, steel, gold, diamonds, and coal). Other major industries include automobile, chemical, textile, and food manufacturing. These sectors, part of an overall industrial base that contributed just under 26% of GDP in 2017, are important sources of jobs. There are also well-developed tourism, financial, energy, legal, communications, and transport sectors, which are part of an overall services sector that contributed nearly 62% of GDP in 2017. Recent GDP trends are provided in Table 2 . South Africa regularly hosts large global development and business events, and South African firms are active across Africa, particularly in the mobile phone, retail, and financial sectors. Some also operate internationally, and the Johannesburg Stock Exchange is among the 20 largest global bourses. South Africa is also a famed wine producer and exports diverse agricultural products, but only about 10% of its land is arable and agriculture makes up less than 3% of GDP. Despite its substantial economic strength, South Africa's annual GDP growth, which stood in the 5% range in the mid-2000s, has slowed. It dropped from almost 2.5% in 2013 to under 0.6% in 2016. Despite a rise to 1.3% in 2017, the International Monetary Fund (IMF) projects a decline to 0.8% in 2018. While the nominal value of GDP has slowly risen in constant local Rand terms since 2010, exchange rate volatility has caused the value of GDP in dollars to fluctuate greatly, which has major implications for the country's terms of trade, international debt servicing, and integration into global manufacturing chains. In dollar terms, GDP fell from a peak of $417 billion in 2011 to $296 billion in 2016, as the Rand weakened sharply against the dollar, before rising to $349 billion in 2017, as the Rand appreciated. Global factors contributing to low growth in recent years have included weak investor confidence—attributed to uncertain economic policy trends and alleged poor governance under Zuma—and periods of weak prices and sluggish global demand for key commodity exports, especially to China. While weak commodity prices may hurt South African export earnings, they can also reduce the cost of raw material imports used by many local producers, including exporters. South Africa has a generally open foreign direct investment (FDI) regime, although investors face high taxes, currency exchange volatility, substantial regulatory burdens, large locally entrenched firms, and Black Economic Empowerment policy compliance costs (see below). Moreover, some foreign investors have expressed discontent over the enactment in late 2015 of a law known as the Protection of Investment Act, which removed most special FDI rights and requires foreign investors to settle most disputes through the South African legal system. This has raised concern about potentially unequal treatment under the law and the possibility of expropriation, which South African law permits in some narrow instances. FDI flows into South Africa have dropped sharply in recent years. They totaled $1.3 billion in 2017, down from $8.3 billion in 2013 and a peak of $9.2 billion in 2008. Meanwhile, outward flows have risen sharply, and were valued at more than five times the worth of inflows in 2017. See Table 3 for information on summary trade and FDI trends. The auto industry has been an important source of job-intensive FDI; South Africa has long hosted Ford plants, and other automakers (e.g., Toyota, BMW, and Nissan) have announced significant manufacturing capacity investments in recent years. Rail locomotive manufacturing has also attracted FDI. The World Economic Forum (WEF) ranked South Africa as the second most competitive economy in 2018 in sub-Saharan Africa (after Mauritius), but assesses it as 67 th globally. The WEF cites as economic strengths South Africa's large market size, relatively good infrastructure, advanced financial system, and innovation capability, but views its research and development capacities as inadequate. The country's World Bank Doing Business 2018 rankings (82 nd globally and fourth in Africa) are middling, and its ranking has dropped over the past decade. The survey also suggests that ease of doing business varies within sub-regions of the country, and that national improvements are possible. South Africa's private sector is relatively dynamic, although firms face a highly unionized labor force, rigid labor laws and, in some industries, sector-wide wage and working condition agreements negotiated between large firms and unions. Such factors arguably tend to protect incumbent jobholders, reduce labor market flexibility, and limit formal sector economic opportunities for the unemployed and poor—thus contributing to the country's chronically high unemployment rates. South Africa has long had a minimum wage in select sectors, but has only recently enacted a general minimum wage law. Sectoral labor agreements have mixed outcomes. They can help firms and industry groups to maintain predictable and stable labor costs and work rules, but often favor the incumbent firms and unions who negotiate them. Oligopolies in some sectors also hinder competition and spur high prices for some locally produced goods. There are also skill and geographical mismatches between labor demand and supplies, and low skill levels in some segments of the labor force. This is, in part, an enduring legacy of population and economic controls and discriminatory education and training patterns under apartheid. Chronically high unemployment may also suggest that the labor pool is under-utilized, whether due to skills deficits or a lack of jobs, which may undercut income earning, spending, demand, and other economic growth potentials. Information and communication (ICT) adoption rates are low and uneven, and education quality ranks poorly in international comparisons, despite large investments in the sector, which has negative impacts on workforce capabilities. Key tools for reversing structural racial disparities are Black Economic Empowerment (BEE) policies, which seek to promote racial equality and economic inclusion using market-based incentives. As a condition of obtaining public contracts, private firms must also comply with BEE requirements, in particular a scorecard-based system ranking firms by factors such as racial inclusiveness in ownership and management, investment in skills development for historically disadvantage persons, and prioritization of commercial ties with other BEE-compliant firms. BEE policies can impose compliance costs on firms and limit hiring choices, and have been criticized in some instances for favoring the interests of middle- and upper-income blacks. The private sector also faces state competition, as state-owned firms enjoy regulatory preferences in some sectors, even though their performance has often been poor. According to the IMF, SOEs play a major role, often with limited competition, in providing key products/services, such as power, telecommunications, and transportation (e.g., ports, airways). Their performance thus affects not only the public finances and the borrowing costs of the whole economy, but also economic growth and job creation through the cost of important inputs for a wide range of businesses and households. […G]enerally, there is a need to allow private firms to compete on a more equal footing with large SOEs. South Africa's sovereign credit ratings are low and have fallen sharply in recent years. Rising public deficits and debt are also a challenge. Other domestic factors hindering growth include social service delivery challenges and unmet infrastructure needs, which undercut productivity potentials and hurt South Africa's attractiveness as an investment destination. Electricity generation deficits and plant maintenance delays have led to periodic rolling power blackouts (see below). The country also has faced several recent droughts, including one that resulted in extreme water shortages in Cape Town, a global tourist destination with a population of 3.7 million people. Continuing water shortage challenges are likely. Ramaphosa has been spearheading an initiative to attract $100 billion worth of new investment over five years. As of October 2018, the government had solicited $55 billion in FDI commitments. Local and foreign firms reportedly pledged $20 billion worth of cross-sectoral investments during the government-led South Africa Investment Conference in late October 2018. This augmented more than $35 billion in prior investment commitments, mostly from China, Saudi Arabia, the UK, and the United Arab Emirates. The government is also continuing a range of efforts to reduce unemployment, poverty, and socioeconomic inequality, to improve education and healthcare, and to unite a geographically and racially divided society. Such actions are guided by the 20-year National Development Plan (NDP). Crafted by a Ramaphosa-headed commission and issued under Zuma, it is supplemented by multiple shorter-term, sector-specific plans. The NDP emphasizes investments in social services and state operational capacities. It fosters efforts to boost employment and incomes, including labor-intensive growth strategies and state investment in large-scale infrastructure, especially in the transport, communications, and power sectors. NDP implementation has been hampered by the poor governance and policy inconsistency under Zuma, the intractability and extensive scope of the country's challenges, and financing limitations. Energy issues—particularly electrical power sector challenges—are a sensitive political topic, as they have the potential to influence the economy and political prospects for the ANC and have in some cases been tied to state capture allegations. Power Sector . Periodic rolling electricity blackouts caused by power generation shortages due to plant maintenance shortfalls and breakdowns are a key energy challenge. They are attributable to multiple factors, including years-long delays and overspending on the construction of two massive new coal-fired plants. Other factors include poor performance by the state-owned national power utility, Eskom. It suffers from massive debt, low credit ratings, and chronic liquidity problems, and has been plagued by reported mismanagement and malfeasance, including in relation to questionable Gupta-related coal and uranium supply deals. This has spurred substantial public and opposition party ire and government criticism, especially when Eskom has requested power rate hikes. Eskom has also drawn criticism for continuing to rely heavily on coal, despite pledging to expand renewable power generation, a government-supported goal. Eskom's generation shortfalls are a key policy challenge because they affect economy-wide productivity, and its $30 billion in state-backed debt hurts the country's sovereign debt rating and ability to borrow. Amidst worsening power shortages, the government plans to fund a three-year, $4.9 billion restructuring of Eskom that is to split it into three state-owned entities focused on generation, transmission and distribution respectively. Eskom had sought the transfer of some Eskom debt to the general public debt ledger, and recently won part of a requested 15% rate increase, despite mining industry opposition. Nuclear Power Generation. South Africa is the only African country with a commercial nuclear power plant. The Zuma administration planned to increase the county's 51,309 MW of power generation capacity by 9,600 megawatts (MW) by 2030 by constructing six to eight new nuclear power plants. It pursued pre-bid negotiations with firms from Russia, France, China, the United States, and South Korea, all countries that had signed bilateral commercial nuclear cooperation agreements with South Africa. The project's estimated cost ranged widely, between $30 billion and $100 billion. Cost and environmental concerns spurred substantial opposition to the plan, as did opacity surrounding pre-bid negotiations with Russia. Due to the lack of concrete cost estimates, the Treasury refused to authorize the release of a formal vendor request for proposals. Leaked details regarding accords with Russia and its Rosatom SOE suggested that a deal would have strongly favored Russian SOE financial interests. Broader concern grew after reports that Shiva Uranium—a firm controversially acquired by the Guptas—was in the running to produce fuel for the plants, amid indications of possible initial procurement irregularities. In April 2017, the High Court invalidated the nascent procurement process on procedural grounds. It also voided bilateral pre-procurement agreements with Russia and broad nuclear technical cooperation agreements with the United States (signed in 1995) and South Korea (signed in 2010). The court's ruling essentially required the government to begin its procurement effort anew. The Ramaphosa administration, while remaining open to a mix of energy source options, has not expressed support for an expansion of nuclear power in South Africa. Russia, however, is actively pressing for a new nuclear power deal with South Africa. Natural Gas. The prospect of significant domestic natural gas production from hydraulic fracturing of natural gas-rich shale ("fracking") is also hotly debated. Supporters see natural gas as a less polluting alternative to coal, South Africa's main electricity generation fuel, and local gas production as a way to reduce reliance on energy imports and generate jobs. Opponents, especially farmers, have cited possible contamination and overuse of water resources, notably in the environmentally sensitive semi-desert Karoo region, where most of an estimated 390 trillion cubic feet of recoverable shale gas reserves are located. Such concerns spurred a 2011 moratorium on exploration. It was later lifted, but a 2017 High Court ruling invalidated national fracking regulations. The Ramaphosa administration has pledged to fast-track applications and regulatory requirements to enable new exploration. Mining. Mining sector reform is another focus of debate. In 2017, the Zuma administration issued a draft mining charter—a document setting out industry-wide policy requirements with the aim of increasing black economic participation and benefit. It drew widespread industry concern. The charter would have required renewed compliance with a black mine ownership share quota of 30% if current black owners sold or transferred their shares in a mining asset. It would also have required firms to give partial in-kind ownership rights to mine workers and nearby community groups, and pay them dividends. The Ramaphosa administration revised and later adopted a new charter that allows firms to remain compliant with black ownership requirements once they are met—even if black ownership shares fall below the 30% threshold. It also permits firms to make payment in place of worker and community shares and recover the value of such shares, eliminates dividends for such owners, and requires compliance with BEE regulations for mining firms involved in public procurement transactions. South Africa has been the largest U.S. trade partner in Africa since 2014, though its global significance is relatively moderate. In 2017, it was the 35 th -largest source of U.S. imports and the 43 rd -largest U.S. export destination globally. Bilateral trade in goods in 2017 totaled $13 billion ($5 billion in U.S. exports and $8 billion in U.S. imports), down from a peak of $16.7 billion in 2011, while trade in services in 2017 totaled $4.8 billion ($2.9 billion in U.S. exports and $1.9 billion in U.S. imports). In 2017, the stock of U.S. FDI in South Africa stood at $7.34 billion, and centered on manufacturing (51%), notably of chemicals and food, professional and technical services (9.6%), and wholesale trade (8%). South African FDI stock in the United States totaled $4.1 billion. A U.S.-South Africa Trade and Investment Framework Agreement (TIFA) signed in 2012 facilitates bilateral trade and investment dialogues, and there is a bilateral tax enforcement and cooperation treaty, and a double taxation treaty. South Africa also is eligible for duty-free benefits under the African Growth and Opportunity Act (AGOA, P.L. 106-200 , Title I, reauthorized in 2015 for 10 years under P.L. 114-27 ), but not for special AGOA apparel benefits. Its $2.9 billion in AGOA exports to the United States in 2017 (21% of all such exports) made it the largest non-oil-focused AGOA beneficiary and the second largest overall, although the value of its exports under AGOA has fallen since peaking at $3.6 billion in 2013. An April 2018 U.S. International Trade Commission study, U.S. Trade and Investment with Sub-Saharan Africa: Recent Developments , found potential for significantly greater bilateral trade in a range of goods. During the 2015 AGOA reauthorization debate, various stakeholders raised questions about South Africa's continued AGOA eligibility. Two issues drew particular attention. The first was concern over South Africa's reciprocal trade agreements with other advanced economies, in particular the European Union (EU). Some in the U.S. private sector argued that the agreement places them at a competitive disadvantage vis-à-vis EU firms, as it gives the latter preferential tariff treatment in South Africa. (In contrast, AGOA gives South African firms preferential access to U.S. markets, but does not give U.S. firms reciprocal access to South African markets.) AGOA eligibility criteria include rules on reciprocal third-party agreements, but no country has lost its eligibility under these criteria. The second issue was concern over the large size and advanced character of South Africa's economy—particularly relative to its African peers—which some have argued make it a U.S. competitor in some sectors. South Africa is the only country to make significant use of AGOA in the export of advanced manufactured products, in particular motor vehicles and related parts. In 2017, South Africa's auto exports under AGOA were worth $1.2 billion and comprised over a fourth of all African non-oil exports under the program. Some stakeholders cited these two issues to argue that stricter income requirements were needed to ensure that AGOA benefits target the least-developed countries in Africa, and to encourage South Africa to negotiate a reciprocal U.S. trade agreement. Others contended, conversely, that South Africa's exports of high-value items show that AGOA preferences were working as intended, by helping to improve South Africa's economic development. They also asserted that removing South Africa from AGOA might undermine intra-regional trade, since South Africa is a key trade partner of many other African countries, which AGOA is designed to encourage. While no significant changes were made affecting South Africa's AGOA eligibility, these issues may continue to draw congressional scrutiny. South African import restrictions on certain agriculture products also temporarily threatened its AGOA eligibility—both before and after the 2015 AGOA reauthorization—and led to a bilateral trade dispute. It focused on South African anti-dumping duties and other restrictions on imports of certain U.S. poultry, pork, and beef products. The dispute was resolved in 2016, when South Africa lifted these restrictions following intensive bilateral engagement initiated under an out-of-cycle 2015 review of South Africa's eligibility. The Trump Administration's use of Section 232 of the Trade Expansion Act of 1962 (P.L. 87-794, as amended) to impose tariffs have roiled bilateral trade ties. In March 2018, the Trump Administration imposed additional U.S. tariffs on steel (25%) and aluminum (10%) under Section 232. In 2017, U.S. imports from South Africa of affected steel and aluminum products were worth $279 million and $340 million, respectively. In September, several Members of Congress requested an exemption from these tariffs for South Africa, which had unsuccessfully sought their removal. In October, the South African government reported that the Trump Administration had granted Section 232 duty exclusions for U.S. imports of 161 aluminum and 36 steel products, largely allaying South African concerns. The action came in response to U.S. firms' requests for these exclusions, which are for products not produced in the United States in sufficient amounts or of satisfactory quality, according to the Commerce Department. An additional U.S. Section 232 investigation on autos and auto parts could result in the imposition of additional U.S. tariffs on such products—reportedly up to 25%—including from South Africa. In July 2018, a South African government representative argued against such tariffs on a variety of grounds at a U.S. Commerce Department hearing on the matter. On February 17, 2019, the Commerce Department submitted a report on its investigation to President Trump. He has 90 days to act on recommendations in the report, which were not publicly disclosed. Other issues with implications for South Africa's AGOA participation include intellectual property concerns set out by the U.S.-based International Intellectual Property Alliance (IIPA), regarding South Africa's 2017 Copyright Amendment Bill. The IIPA testified at an August 2018 U.S. Trade Representative annual AGOA eligibility review hearing that the bill would weaken IPR holders' rights, make South Africa noncompliant with AGOA and other international IPR agreements, impose burdens on IPR holders, and disincentivize intellectual property development. South Africa's government, academics, and the U.S. and Europe-based Computer and Communications Industry Association disputed such claims. The National Assembly passed the bill in late 2018 and it now must be considered by the upper house. South Africa's move to expropriate land without compensation could also potentially affect South Africa's AGOA eligibility, although there are no overt signs of such a shift. A range of other issues with implications for U.S. investment in South Africa are addressed in the State Department's annual Investment Climate Statements publication. U.S.-South Africa bilateral relations are generally friendly, although there are periodic differences over foreign policy issues. While there is often broad U.S.-South African accord on selected multilateral issues (e.g., nuclear proliferation), African regional development goals and, in some cases, responses to political or military crises in the region, in multilateral fora, South Africa backs developing country positions that are at times inconsistent with stated U.S. interests. South Africa has also criticized some U.S.-backed international interventions (e.g., in Iraq and Libya) and taken stances toward Cuba, the Palestinian cause, and Iran that are at odds with U.S. positions. It has also forged increasingly close economic ties with China. Such ties may be viewed negatively by the Trump Administration; it has alleged that Chinese activities in Africa are "corrupting elites, dominating extractive industries, and locking countries into unsustainable and opaque debts and commitments." Sub-Saharan Africa is a key focus of South African foreign policy. Its regional activities are multifaceted, but focus on investment; peacekeeping, stabilization, and conflict mediation; and the economic and other development priorities of the African Union (AU) and other sub-regional organizations (e.g., the Southern African Development Community or SADC). It also often helps coordinate or represent African views in multilateral fora on such issues as climate change, African peace and security issues, U.N.-African cooperation, and developing country priorities. South Africa is serving as a non-permanent member of the U.N. Security Council during 2019 and 2020; some analysts see this as affording South Africa with an opportunity to revitalize its international role following what some see as a period of foreign policy drift under Zuma. Regional Efforts. South Africa played key roles in the formation of the African Union (AU) and the establishment of the New Partnership for Africa's Development (NEPAD), the AU's strategic socioeconomic development policy framework. It hosts the NEPAD Planning and Coordinating Agency, now being transformed into the permanent AU Development Agency. In late 2018, South Africa ratified the AU-backed African Continental Free Trade Area (AfCFTA), an emergent free trade area intended to increase intra-African trade among as many as 49 AU member states by sharply reducing tariffs. Former South African Foreign Affairs Minister Nkosazana Dlamini-Zuma served as Chair of the African Union Commission from 2012 to 2017, although her tenure received mixed reviews. President Ramaphosa is currently the First Vice Chairperson of the AU, which he is slated to chair in 2020. Migration, Conflict Resolution, and Peacekeeping . South Africa hosts roughly 273,000 refugees, asylum-seekers, stateless persons, and other populations of international humanitarian concern, as well as many economic migrants. Most of these populations are from Africa. South Africa has repeatedly sought to resolve the political crises and halt or mitigate armed conflicts that contribute to these and other population flows and humanitarian emergencies across the African continent. It has been particularly active in this respect in southern Africa, on behalf of SADC—as in Zimbabwe, after violent, internationally questioned elections in 2008, and in Lesotho, in response to repeated periods of political instability. Since 2009, former South African President Thabo Mbeki has chaired the African Union High Level Implementation Panel on Sudan and South Sudan (AUHIP). South Africa has also played mediating roles in conflicts in Cote d'Ivoire, the Democratic Republic of the Congo (DRC), Burundi, and elsewhere. South Africa has also long deployed uniformed personnel to U.N. peacekeeping operations and contributed troops to periodic AU military interventions. As of January 2019, there were 1,171 South African troops, police, and experts serving with U.N. peacekeeping missions in South Sudan, Darfur, Sudan, and DRC. In DRC, South Africa helped spearhead the formation of the Force Intervention Brigade, a special U.N. peacekeeping unit authorized to carry out contingent offensive operations in coordination with the DRC military to counter armed groups in DRC's highly unstable east. South Africa's Foreign A id and U.S. Cooperation . To advance its policy goals across the continent, South Africa is endeavoring to establish a foreign aid agency, the South African Development Partnership Agency (SADPA), but progress has been slow and limited since the plan was announced in 2009. SADPA is intended to coordinate South Africa's foreign aid, with a focus on other African countries regarding democracy and good governance, conflict prevention, development, and other ends. These are all priorities of South Africa's current foreign aid mechanism, the African Renaissance Fund (ARF), which the Department of International Relations and Co-operation administers, along with multilateral agency and initiative funding. SADPA and a SADPA Fund would replace the ARF. Multiple other state agencies also administer foreign aid programs, although reporting on aid levels and program activities is fragmentary. Since 2005, the United States has partnered with South Africa under the USAID-administered Trilateral Assistance Program (TAP). TAP seeks to promote U.S. regional goals by leveraging South Africa's "democratic systems, regulatory practices, and innovative scientific research" to tackle development, natural disaster, and security challenges in Africa. It provides training, exchange programs, and funding to support South Africa's provision of technical development assistance to other African countries. TAP projects have addressed such issues as constitution-making in South Sudan, food security in Mozambique, adjudication of gender-based violence in Malawi and Angola, and climate change responses and water conservation in southern Africa. South Africa established diplomatic relations with China in 1998, after severing ties with Taiwan, and the two countries maintain close political, trade, and investment ties. China is South Africa's largest trade partner. Bilateral relations take place under a 2010 comprehensive strategic partnership pact and a host of subsidiary cooperation agreements. The most recent such agreements were signed in September 2018 during a heads of state summit of the Forum on China-Africa Cooperation (FOCAC). Held in Beijing, it was co-hosted by China and South Africa, which hosted the prior FOCAC summit in 2015. The 2018 summit followed the 10 th summit of the Brazil, Russia, India, China, and South Africa (BRICS) cooperation group, hosted by South Africa July 2018. In 2014, the BRICS established the New Development Bank (NDB) to finance infrastructure and sustainable development efforts, which include ongoing South African projects worth $680 million, focusing on clean energy development, transport infrastructure, and renewable energy transmission. During a state visit to China by President Ramaphosa alongside the FOCAC 2018 summit, China reportedly agreed to provide $10 billion in financing for South Africa, adding to $14.7 billion in investments pledged by China during the BRICS summit. This financing is to fund a South African state economic stimulus package and infrastructure and industrial development projects. The government has not made public the terms and conditions of the deal; the opposition Democratic Alliance (DA) has pledged to request these details. In October 2018, the DA also threatened to sue for the details of a separate R33 billion ($2.2 billion) China Development Bank (CDB) loan to the state utility, ESKOM. The DA fears that these loans will increase South Africa's indebtedness to China. The transparency of Chinese loans has also drawn concern. Other notable China-South African business transactions include a May 2018 commitment by nine large Chinese firms, including SOE affiliates, to invest $10 billion in a South African special economic zone, and a possible $900 million purchase of Chevron's South Africa and Botswana assets by Sinopec, a Chinese oil and gas SOE. In 2016, Chinese auto SOE Beijing Automotive International Corp. invested $759 million in a vehicle-production facility. As of late 2017, Chinese investment stock in South Africa reportedly exceeded $25 billion. South Africa maintains cordial relations with multiple Middle East countries, including Iran, Saudi Arabia, and the United Arab Emirates (UAE). These ties have recently attracted attention in light of reported pledges by the latter two countries to invest $10 billion each in South Africa, and because South Africa's Denel arms manufacturing SOE could be the target of these investments. South Africa has exported arms to Saudi Arabia and the UAE in recent years, and the Saudi military has reportedly used those arms in attacks in the ongoing war in Yemen. Such attacks have killed or injured thousands of Yemeni civilians, and analysts have suggested that these exports may violate South African human-rights-related controls on arms sales. Closer relations with Riyadh have the potential to affect long-standing South African relations with Iran—which take place through a bilateral Joint Commission of Cooperation created in 1995 and multiple cooperative agreements—as well as South Africa's reported role as a back-channel intermediary between Iran and Saudi Arabia regarding the war in Yemen. South Africa experienced a rise in alleged corruption and deterioration in economic performance during the Zuma administration. Since taking office in early 2018, President Ramaphosa has taken steps to reverse these trends. Multiple inquiries into public sector corruption and malfeasance are under way, along with efforts to reform SOEs. The ultimate success of these efforts will depend on the degree to which public sector agency performance improves, guilty parties are successfully prosecuted, and management and regulatory reforms are implemented. Such efforts are likely to be politically challenging for Ramaphosa, since they may threaten the influence of some top ANC party members and state office holders with ties to former president Zuma, who retains clout within the ANC. Ramaphosa also faces pressure from the political left on issues such as land reform and planned expropriation of land. He will have to balance such pressures with the demands of private property owners and investors. His relative power to pursue policy and institutional reforms will also depend, in part, on the success of the ANC in the May 2019 elections and his degree of influence within the party. Reversing a long-anemic pattern of growth will also likely prove challenging. Ramaphosa has made some progress, eliciting substantial investment pledges, initiating a youth employment scheme, and pushing reforms that may allow SOEs to contribute substantially more to economic growth. Many of the reasons for the weak growth, however, are structural, long-term phenomena that are not amenable to quick fixes. Nevertheless, South Africa's economy is large and diversified, and may have the capacity to expand moderately in the coming years, notably if the large pool of unemployed can be better integrated into the economy. If South Africa can make positive economic progress, there is potential for increased international trade, including trade with the United States—although additional U.S. trade restrictions, particularly potential Section 232 tariffs on autos and parts, could hinder trade growth. Because of its market size and economic position, South Africa is well placed to grow as a key U.S. investment and export destination in Africa. This may also be aided by ongoing U.S. government and private sector efforts to expand trade and investment ties—including by tapping opportunities created by South Africa's long-term infrastructure investment efforts. There is also possible scope for greater U.S.-African cooperation regarding development in South Africa and the sub-continent more broadly, as demonstrated by South Africa's role as a strategic partner under the Feed the Future and TAP programs. USAID's Power Africa program is based in South Africa and could potentially play a role in helping South Africa to address its electrical sector challenges. South Africa could also provide a source of partnership and potential investment targets for the emergent U.S. International Development Finance Corporation. While there have been occasional strains in U.S.-South African relations on some international issues, South Africa's two-year membership on the U.N. Security Council could also provide a springboard for greater bilateral cooperation on international matters of interest to both countries.
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South Africa is a majority black, multiracial country of nearly 58 million people. It has cordial relations with the United States, notwithstanding some occasional strains, and is the largest U.S. trade partner in Africa. South African President Cyril Ramaphosa is spearheading efforts to address years of weak economic growth and multiple corruption scandals under his predecessor, Jacob Zuma. These issues helped spur Zuma's resignation in early 2018—prior to a likely vote of no confidence by parliament—and led to the election of Ramaphosa, who was selected to lead the African National Congress (ANC) party in late 2017. If the ANC wins a majority in forthcoming elections in May 2019, as polls suggest is probable, he will likely remain president. Corruption linked to Zuma and a network of business and political associates was reportedly so systematic that it was dubbed "state capture." Multiple efforts to address this problem are underway, including a high-profile commission of judicial inquiry. Zuma is also being tried on charges linked to a 1990s-era arms procurement scandal. Broader challenges include high levels of poverty, social inequality, and unemployment, and unequal access to public services. Such problems disproportionately affect the generally poor black majority, the main victims of apartheid—a codified system of racial bias that ended in 1994, when the first universal suffrage elections were held. Unequal access to land is a particularly sensitive issue. State land redistribution efforts have sought to ensure greater access to land by blacks and other historically disadvantaged groups, but progress has been slow. In 2018, pressure to speed this process prompted the government to launch an ongoing effort to amend the constitution to permit uncompensated land expropriation. South Africa also struggles with violent crime, labor unrest, and protests over public service delivery and corruption. South Africa has the most diversified and industrialized economy in Africa, but has suffered years of anemic growth attributable to a range of international and domestic factors. The Ramaphosa administration has made economic growth a priority, and is pursuing a range of efforts to reduce unemployment, poverty, and socioeconomic inequality; improve education and healthcare; and unite a socioeconomically, geographically, and racially divided society. It is also seeking to attract $100 billion in new investment over five years and has elicited at least $55 billion to date. Congress played a leading international role in efforts to end apartheid, although some South African decisionmakers appear to harbor abiding resentments toward the United States as a result of the Reagan Administration's approach to achieving this goal and its posture toward the ANC. Contemporary U.S.-South African ties are cordial, based on shared democratic values and often-concordant views on regional development goals. The two countries maintain a bilateral strategic dialogue, and the United States provides substantial aid to South Africa, primarily to combat the country's HIV/AIDS epidemic. U.S.-South African views regularly diverge, however, on international policy matters (e.g., Palestinian statehood, and responses to Iran and Venezuela). There have also been periodic trade frictions; in 2015-2016 the two countries had a poultry and meat trade dispute and in 2018 the Trump Administration imposed tariffs on U.S. imports of steel and aluminum, including from South Africa. South Africa was later exempted from many of these tariffs, but prospective U.S. tariffs on autos and auto parts could spur renewed strains. The Trump Administration has not otherwise pursued any major changes in the bilateral relationship. An August 2018 tweet by President Trump alleging that South Africa's government was seizing white-owned farmland and that large numbers of farmers were being killed, however, drew criticism from the South African government. U.S.-South African relations arguably have the potential to deepen, although such an outcome might require dedicated efforts by the two sides. If President Ramaphosa demonstrates concrete progress in reasserting the rule of law and turning around the ailing economy, following substantial deterioration in these areas under former President Zuma, the country may become more attractive as a U.S. partner. Greater cooperation and collaboration can be envisioned regarding bilateral trade and investment, responses to political-military and development challenges in Africa, educational and cultural exchange, and technical cooperation in multiple areas. In recent years, South Africa-related congressional activity has mainly focused on U.S. healthcare assistance, trade issues, and consultations during periodic congressional travel to the country. Given South Africa's economic and political influence with in Africa and on African and developing country positions in multilateral contexts—which do not always dovetail with those of the United States—some Members of Congress may see a need to expand the scope and broaden the focus of congressional and other U.S. engagement with South Africa.
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Congress enacted the Coastal Zone Management Act (CZMA; P.L. 92-583 , 16 U.S.C. §§1451-1466) in 1972 and has amended the act 11 times, most recently in 2009. Congress deliberated and passed the act at a time when concern about environmental degradation spurred passage of many of the nation's environmental statutes. CZMA sets up a national framework for states and territories to consider and manage coastal resources. If a state or territory chooses to develop a coastal management program and the program is approved, the state or territory (1) becomes eligible for several federal grants and (2) can perform reviews of federal agency actions in coastal areas (known as federal consistency determination reviews ). Since 1972, many of the trends that called congressional attention to coastal management have continued. Over a third of the U.S. population lived in shoreline counties in 2010, with more expected by 2020 as people continue to migrate to coastal areas to take advantage of economic opportunities, retire, and pursue recreational interests. Coastal areas are also home to economic sectors such as fishing, transportation, defense, offshore energy, and tourism and to natural resources such as estuaries, beach systems, and wetlands. The shoreline likely will continue to be affected by pressures to develop and preserve areas, large-scale events (e.g., hurricanes and tsunamis), and long-term changes (e.g., relative sea level, changes in rainfall, wetland loss, and increased temperatures). In addition to responding to these pressures, Congress may continue to consider whether CZMA is being effectively implemented and whether changes should be made to CZMA grant programs. This report provides a review of CZMA with a specific focus on the National Coastal Zone Management Program (NCZMP). The report discusses how and why states and territories may choose to participate in the national program (namely to access federal grant programs and undertake federal consistency determination reviews) and recent issues for Congress. The appendixes include information about amendments to CZMA over time and section-by-section summaries of current CZMA provisions. Congress enacted CZMA "to establish a national policy and develop a national program for the management, beneficial use, protection, and development of the land and water resources of the nation's coastal zones." Although CZMA has been amended 11 times ( Appendix A ), the national policies as declared by Congress have stayed relatively consistent over time. They currently include the following six policies: 1. to preserve, protect, develop, and, if possible, restore or enhance coastal resources; 2. to encourage and assist states and territories to effectively exercise their development and management responsibilities in the coastal zone, giving full consideration to ecological, cultural, historic, and aesthetic values as well as the needs for compatible economic development; 3. to encourage the preparation of special area management plans to protect significant natural resources, support reasonable coastal-dependent economic growth, and improve protection of life and property; 4. to encourage the participation and cooperation of the public, state and local governments, interstate and other regional agencies, and federal agencies to carry out CZMA; 5. to encourage coordination and cooperation with and among appropriate federal, state, and local agencies, and international organizations, in collection, analysis, and dissemination of coastal management information and research; and 6. to respond to changing circumstances affecting the coastal environment and resources and their management by encouraging states and territories to consider ocean uses that may affect the coastal zone. Under CZMA, each level of government plays a role in coastal management. At the federal level, the National Oceanic and Atmospheric Administration's (NOAA's) Office for Coastal Management (OCM) in the Department of Commerce (DOC) implements CZMA's national policies and provisions. To participate in the NCZMP, states must adhere to guidelines as set in statute and related regulations. States and territories, however, determine the details of their coastal management programs (CMPs), including the boundaries of their coastal zones, issues of most interest to the state, and policies to address these issues, among other factors. Local governments implement the approved CMPs, often through land use regulations. OCM administers CZMA provisions under four national programs: NCZMP, National Estuarine Research Reserve System (NERRS), and Digital Coast. This report focuses on the NCZMP. The NCZMP encourages interested coastal states and territories (hereinafter referred to as states ) to work with NOAA to develop and implement coastal zone management programs. To join, states must develop CMPs pursuant to CZMA and federal regulations. States that join the NCZMP are eligible for several federal grants and have the right to review federal actions for consistency with state coastal policies. If a state chooses to become part of the NCZMP, it must develop a CMP pursuant CZMA Section 306 and NOAA regulations. CMPs must contain "a broad class of policies for ... resource protection, management of coastal development, and simplification of governmental processes." The Secretary of Commerce (the Secretary) must conclude that the state has completed certain tasks (e.g., included required program elements and coordinated with local and regional agencies) to approve the CMP. Once the Secretary approves the state's CMP, the state is eligible to receive the NCZMP's benefits and is referred to as a participant of the national program. The Secretary is expected to evaluate participants at least once every three years to determine whether they are working toward their stated plans. Thirty-five states and territories (including states surrounding the Great Lakes, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands) are eligible to participate. Although all 35 eligible states and territories have at some point chosen to participate, 34 are currently part of the NCZMP. Participation in the NCZMP provides various benefits to participants, including access to several federal grant programs and the right to review federal actions for consistency with state coastal policies. These provisions have been mainstays of CZMA since its development and enactment. Coastal states or territories with approved CMPs are eligible to apply for federal grants for coastal zone management. Grant programs have changed over time to reflect congressional priorities and have included grants for program development, coastal energy impacts, and research and technical assistance. Currently, CZMA authorizes the Secretary of Commerce to provide grants related to program administration (Section 306), coastal resource improvement (Section 306A), coastal and estuarine land conservation (Section 307A), coastal enhancement objectives (Section 309), technical assistance (Section 310), and coastal nonpoint pollution control (Section 6217) ( Table 1 ). Since 1972, NOAA has allocated over $2 billion in coastal zone management-related grants to eligible coastal states and territories ( Figure 1 ). NOAA disbursed the majority of the funds under Sections 306 and 306A grant programs. All 35 coastal states and territories received a portion of the funds since 1972, including Alaska, which is not currently a part of the NCZMP. States have received amounts ranging from $13 million to over $106 million in grant funding, depending on factors such as how long the state has been a part of the NCZMP, the state's size and population, and the extent of its success in competitive grant programs. In FY2017, Congress appropriated $85 million to NOAA for coastal management grants. Of that total, NOAA allocated nearly $58 million for Section 306 grants, with smaller amounts awarded for Sections 306A, 309, and 310 grants or withdrawn via government-wide rescissions and Department of Commerce NOAA assessments. The current CZMA grant program authorizations of appropriations have expired, but Congress has continued to fund the programs (see " Authorization of Appropriations for CZMA Grant Programs " for a longer discussion of the topic). CZMA Section 307 requires federal actions that have reasonably foreseeable effects on coastal uses or resources to be consistent with the enforceable policies of a participant's approved CMP. These actions may occur in the state's approved coastal zone or in federal or out-of-state waters (which may cause interstate coastal effects). Federal agencies or applicants proposing to perform these federal actions must submit a consistency determination to the potentially affected participant to consider whether the actions are consistent with state coastal policies. Legislation and NOAA regulation have defined several terms related to consistency review, including the following: Coastal zone is defined as the coastal waters and adjacent shorelands, strongly influenced by each other, and includes islands, transitional and intertidal areas, salt marshes, wetlands, and beaches. The zone extends in Great Lakes waters to the international boundary and in other areas seaward to the outer limit of the state title and ownership under various acts, such as the Submerged Lands Act. The zone extends inland from the shorelines only to the extent necessary to control shorelands and to control those geographical areas that are likely to be affected by or vulnerable to sea level rise. Identification of the coastal zone boundaries is a required part of an approved CMP. Effect on coastal use or resource refers to "any reasonable foreseeable effect on any coastal use or resource resulting from a federal agency activity or federal license or permit activity," including federal assistance to state and local governments. Effects may be environmental or impact coastal use; may be direct or secondary; and may result from the incremental impact of past, current, or future actions. The determination of whether the action will have a reasonably foreseeable effect is also known as the effects test. Enforceable policies are "state policies which are legally binding through constitutional provisions, laws, regulations, land use plans, ordinances, or judicial or administrative decisions, by which a state exerts control over private and public land and water uses and natural resources of the coastal zone." Federal actions include federal agency activities, federal license or permit activities, outer continental shelf plans, and federal assistance to state and local governments. NOAA requires participants to submit lists of federal actions that are subject to consistency determination reviews and their general geographic areas. Interstate coastal effect refers to any reasonably foreseeable effect resulting from a federal action occurring in one state on any coastal use or resource of another state that has an approved CMP. Effects may be environmental or impact coastal use; may be direct or secondary; and may result from the incremental impact of past, current, or future actions. A state must identify a list of federal actions in other states for approval by NOAA to perform interstate consistency determination reviews. Participant reviews of federal actions are context-specific and depend on the location and action in question, with different rights and responsibilities assigned to the federal agency, applicants, and participants involved. Details of the action—such as which party determines the foreseeable effects, the length of the participant review period, the effect of a participant's objection to the action, and the available conflict resolution or appeals options—depend on the federal action in question ( Table 2 ). Resolutions to participant objections to consistency determinations depend on the federal action in question, as follows: Federal agency activities and development projects: If a participant objects to a federal agency's consistency determination, the participant may request mediation from the Secretary of Commerce or OCM. Regardless of the mediation outcomes, the federal agency may proceed with its activities or development projects if the agency provides a legal basis for being consistent to the maximum extent practicable , or the agency has concluded that its proposed action is fully consistent with the participant's enforceable policies. Federal license or permit activities, outer continental shelf plans, and federal assistance to state and local governments: If the participant objects to the consistency certification, the federal agency cannot authorize the action unless the Secretary of Commerce overrides the objection. The applicant may appeal to the Secretary, who then will review the administrative record and may override a participant's objection if he or she finds that the action is consistent with the objectives of CZMA or is necessary for national security. For example, in 2008, the Secretary of Commerce overrode Maryland's objection to an applicant's consistency determination, finding that "the project [was] consistent with the objectives of CZMA." According to NOAA, participants review thousands of federal consistency determination each year, with more than half of the reviews being for federal license or permit activities. Remaining reviews are, in descending order, federal agency activities and development projects, federal financial assistance activities, and outer continental shelf plans. Over time, participants have concurred with 93% to 95% of the federal consistency determinations they have reviewed. The high concurrence rate may indicate that participants, federal agencies, and applicants often have negotiated project modifications or alternatives before the formal review process. Since the first CMP was approved in 1978, 45 consistency decisions have been subject to secretarial appeals, most recently in 2014 ( Figure 2 ). Of the 45 appeals, the Secretary overrode participant objections in 14 cases and agreed with the participant in the other 31 cases. An additional 65 appeals have been settled or withdrawn after they reached the secretarial level but before a determination was made, and 33 additional requests for appeals were dismissed or overridden on procedural grounds. As of April 2018, there were no appeals pending before the Secretary of Commerce. Congress may continue to consider the effects of natural and man-made changes on the coast, the effectiveness of CZMA implementation, and the expired CZMA grant program authorizations of appropriations. These concerns have been considered in previous Congresses and/or have been recently raised by government agencies and various coastal stakeholders. Congress may continue to examine CZMA in light of continued population and infrastructure growth along the coast, as well as coastal hazards such as flooding and erosion. According to the 2010 census, coastal shoreline counties were home to over 123 million people (39% of the U.S. population), and were expected to grow by another 10 million people by 2020. The ocean and Great Lakes economy accounted for 2.3% of total employment and contributed $320 billion to the total U.S. gross domestic product in 2015. Much of the population and infrastructure growth has occurred in shoreline communities amid ecosystems such as beaches, reefs, sea grasses, wetlands, estuaries, and deltas. The combination of built and natural systems has been and likely will continue to be affected by changes in sea level (and its impacts, such as higher tides, greater storm surge, saltwater intrusion, erosion, etc.), local rainfall, increasing water and air temperatures, and ocean acidification, among other factors. Several bills to amend CZMA would have addressed some of these changes. In the 115 th Congress, Members proposed bills focused on climate change preparedness or adaptation (e.g., H.R. 3533 and H.R. 4426 ) and "working waterfronts" (e.g., H.R. 1176 ). Other proposals would have expanded CZMA grant programs to locations (the District of Columbia, e.g., S. 3146 and H.R. 2540 ) and groups (Indian tribes, e.g., H.R. 2607 ) currently not eligible to apply to the grant programs. In previous Congresses, other bills proposed additional grant programs related to offshore activities, such as renewable energy siting surveys (e.g., H.R. 1690 , 111 th Congress), responses to oil spills and other disasters related to outer continental shelf energy activity (e.g., H.R. 3757 , 112 th Congress), aquaculture siting (e.g., H.R. 2046 , 104 th Congress), harmful algal blooms (e.g., H.R. 4235 , 105 th Congress), and Great Lakes restoration (e.g., S. 2337 , 108 th Congress). Some scholars have argued for substantial revision or improvements to CZMA to account for changes along the coast. Congress may examine how NOAA has implemented CZMA and whether changes to the agency, the law, or the law's implementation are necessary. The effectiveness of CZMA implementation, specifically the NCZMP, has been evaluated since the law's enactment by a variety of entities, including the Department of Commerce inspector general, the Office of Management and Budget, the Government Accountability Office (GAO), and scholars. Evaluations have noted a range of issues, from monitoring and measuring the success of the program as a whole to issues concerning specific grant programs. GAO reported several issues with NOAA's implementation of CZMA and program evaluation in a 2014 report, including limitations to the coastal zone management performance measurement system, weaknesses in NOAA's method for selecting stakeholders for state program evaluations, and the agency's limited use of collected performance data. NOAA agreed with the recommendations. It is unclear whether NOAA has completed changes to address GAO's recommendations fully. In a separate 2016 study, GAO surveyed state coastal zone managers about the actions NOAA was taking under CZMA to support state efforts to make marine coastal ecosystems more resilient to climate change. GAO found that state coastal zone managers "generally had positive views of the actions NOAA [was] taking." Some have argued that the implementation of some CZMA programs has been inadequate. For example, some have questioned whether Section 6217 provisions have been properly implemented. Section 6217 of the Coastal Zone Reauthorization Amendments Act ( P.L. 101-508 ) amended CZMA to establish the Coastal Nonpoint Pollution Control Program (CNPCP). The CNPCP requires coastal states with approved CMPs to reduce polluted runoff to coastal waters through coastal nonpoint pollution control programs that include specific land-based measures. NOAA and the Environmental Protection Agency (EPA) jointly administer the CNPCP. Under Section 6217(c)(3), participants that fail to submit "approvable programs" lose a portion of their allotted funding under CZMA Section 306. Most participants received conditional approval between 1997 and 1998, and the majority have since received final approval. Several states have yet to receive final approval, including Alabama, Hawaii, Illinois, Indiana, Louisiana, Michigan, Mississippi, Ohio, Oregon, Texas, and Washington. In 2009 and 2016, a private organization sued NOAA and EPA for continuing to grant funds to Oregon and Washington, respectively. According to NOAA, the agency and EPA currently are working with the conditionally approved states to address the programs' remaining conditions. Although Congress has continued to appropriate funding for CZMA grant programs, the program's authorizations of appropriations have expired. Current CZMA coastal zone management grant programs were last authorized for appropriations in the following years: Section 306 (Administrative Grants): FY1999; Section 306A (Coastal Resource Improvement Grants): FY1999; Section 307A (Coastal and Estuarine Land Conservation Program): FY2013; Section 309 (Coastal Zone Enhancement Grants): FY1999; and Section 6217 (Coastal Nonpoint Pollution Control Program): FY1995. Since 1995, two pieces of legislation have been enacted to reauthorize appropriations for a CZMA grant program ( P.L. 104-150 in 1996, which reauthorized appropriations for Sections 306, 306A, and 309 grant programs, and P.L. 111-11 in 2009, which established and authorized appropriations for the Section 307A grant program). Introduced pieces of legislation have proposed to reauthorize and increase appropriations for Sections 306, 306A, and 309 grant programs (e.g., S. 1142 in the 104 th Congress and S. 3038 in the 114 th Congress) or add additional authorizations for new grant programs (e.g., H.R. 3533 in the 115 th Congress and H.R. 1690 in the 111 th Congress). Congress appropriated $75 million to the NCZMP for "coastal zone management grants" in FY2018, despite the expired authorizations of appropriations. In FY2019, as in FY2018, NOAA has proposed to eliminate all coastal management grants. According to the FY2019 budget proposal, NOAA would "continue to support states' participation in the National CZM program by reviewing and supporting implementation of states' management plans, supporting Federal consistency reviews, and providing technical assistance services." Some stakeholders have contended that financial assistance to states from the NCZMP is important and more funding is necessary. For example, in a 2016 GAO survey, state coastal zone managers stated that "financial assistance provided by NOAA [was] critical" and that "the amount of financial assistance available [was] insufficient to address states' needs in implementing projects." NOAA officials also have stated that financial assistance for coastal zone management is in high demand. For example, the NOAA Regional Coastal Resilience grant program, administered under Section 310, received 132 applications requesting $105 million in FY2015; $4.5 million was available for grants. Others argue that funding should not be appropriated to the grant programs, as noted above, making the authorizations for appropriations no longer necessary. Appendix A. Coastal Zone Management Act of 1972 (CZMA) and Its Amendments Appendix B. Section-by-Section Summaries
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Congress enacted the Coastal Zone Management Act (CZMA; P.L. 92-583, 16 U.S.C. §§1451-1466) in 1972 and has amended the act 11 times, most recently in 2009. CZMA sets up a national framework for states and territories to consider and manage coastal resources. If a state or territory chooses to develop a coastal zone management program and the program is approved, the state or territory (1) becomes eligible for several federal grants and (2) can perform reviews of federal agency actions in coastal areas (known as federal consistency determination reviews). Each level of government plays a role in coastal management under CZMA. At the federal level, the National Oceanic and Atmospheric Administration's (NOAA's) Office for Coastal Management (OCM) in the Department of Commerce implements CZMA's national policies and provisions. OCM administers CZMA under several national programs; the National Coastal Zone Management Program (NCZMP) is the focus of this report. To participate in the NCZMP, states and territories (hereinafter referred to as states) must adhere to guidelines set out in CZMA and related regulations. States determine the details of their coastal management programs (CMPs), including the boundaries of their coastal zones, issues of most interest to the state, and policies to address these issues, among other factors. Local governments then implement the approved CMPs, often through land use regulations. The Secretary of Commerce must approve state CMPs. Once the Secretary approves a state's CMP, the state is eligible to receive the NCZMP's benefits and is referred to as a participant in the program (16 U.S.C. §1455). Participation in the NCZMP provides several advantages to participants, including eligibility for federal grant programs and the right to review federal actions for consistency with state coastal policies. Thirty-five states and territories (including states surrounding the Great Lakes, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands) are eligible to participate. Although all 35 eligible states have at some point chosen to participate, 34 are currently part of the NCZMP. Since 1972, NOAA has allocated over $2 billion in coastal zone management-related grants to eligible coastal states. States have received amounts ranging from $13 million to over $106 million in grant funding, depending on factors such as how long the state has been a part of the NCZMP, the state's size and population, and extent of the state's applications to grant programs. CZMA consistency provisions (Section 307) require federal actions that have reasonably foreseeable effects on coastal uses or resources to be consistent with the enforceable policies of a participant's approved CMP. These actions may occur in the state's approved coastal zone or in federal or out-of-state waters (which may cause interstate coastal effects). Federal agencies or applicants proposing to perform these federal actions must submit a consistency determination to the potentially affected participant, certifying that the actions are consistent with state coastal policies and providing participants the opportunity to review their determinations (16 U.S.C. §1456). The 116th Congress may consider changes to CZMA. These changes may address issues such as growing population and infrastructure needs and changing environmental conditions along the coast, questions about the effectiveness of CZMA implementation, and expired authorization of appropriations for CZMA grant programs. Some of these concerns were addressed in proposed legislation in the 115th Congress, such as legislation to expand grant programs to cover more topics and affected groups, and may be addressed in the 116th Congress.
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The Federal Housing Administration (FHA) is an agency of the Department of Housing and Urban Development (HUD) that insures private mortgage lenders against the possibility of borrowers defaulting on certain mortgage loans. If a mortgage borrower defaults on a mortgage—that is, does not repay the mortgage as promised—and the home goes to foreclosure, FHA is to pay the lender the remaining amount that the borrower owes. FHA insurance protects the lender, rather than the borrower, in the event of borrower default; a borrower who defaults on an FHA-insured mortgage will still experience the consequences of foreclosure. To be eligible for FHA insurance, the mortgage must be originated by a lender that has been approved by FHA, and the mortgage and the borrower must meet certain criteria. FHA is one of three government agencies that provide insurance or guarantees on certain home mortgages made by private lenders, along with the Department of Veterans Affairs (VA) and the United States Department of Agriculture (USDA). Of these federal mortgage insurance programs, FHA is the most broadly targeted. Unlike VA- and USDA-insured mortgages, the availability of FHA-insured mortgages is not limited by factors such as veteran status, income, or whether the property is located in a rural area. However, the availability or attractiveness of FHA-insured mortgages may be limited by other factors, such as the maximum mortgage amount that FHA will insure, the fees that it charges for insurance, and its eligibility standards. This report provides background on FHA's history and market role and an overview of the basic eligibility and underwriting criteria for FHA-insured home loans. It also provides data on the number and dollar volume of mortgages that FHA insures, along with data on FHA's market share in recent years. It does not go into detail on the financial status of the FHA mortgage insurance fund. For information on FHA's financial position, see CRS Report R42875, FHA Single-Family Mortgage Insurance: Financial Status of the Mutual Mortgage Insurance Fund (MMI Fund) . The Federal Housing Administration was created by the National Housing Act of 1934, during the Great Depression, to encourage lending for housing and to stimulate the construction industry. Prior to the creation of FHA, few mortgages exceeded 50% of the property's value and most mortgages were written for terms of five years or less. Furthermore, mortgages were typically not structured to be fully repaid by the end of the loan term; rather, at the end of the five-year term, the remaining loan balance had to be paid in a lump sum or the mortgage had to be renegotiated. During the Great Depression, lenders were unable or unwilling to refinance many of the loans that became due. Thus, many borrowers lost their homes through foreclosure, and lenders lost money because property values were falling. Lenders became wary of the mortgage market. FHA institutionalized a new idea: 20-year mortgages on which the loan would be completely repaid at the end of the loan term. If borrowers defaulted, FHA insured that the lender would be fully repaid. By standardizing mortgage instruments and setting certain standards for mortgages, the creation of FHA was meant to instill confidence in the mortgage market and, in turn, help to stimulate investment in housing and the overall economy. Eventually, lenders began to make long-term mortgages without FHA insurance if borrowers made significant down payments. Over time, 15- and 30-year mortgages have become standard mortgage products. When the Department of Housing and Urban Development (HUD) was created in 1965, FHA became part of HUD. Today, FHA is intended to facilitate access to affordable mortgages for some households who otherwise might not be well-served by the private market. Furthermore, it facilitates access to mortgages during economic or mortgage market downturns by continuing to insure mortgages when the availability of mortgage credit has otherwise tightened. For this reason, it is said to play a "countercyclical" role in the mortgage market—that is, it tends to insure more mortgages when the mortgage market or overall economy is weak, and fewer mortgages when the economy is strong and other types of mortgages are more readily available. Some prospective homebuyers may have the income to sustain monthly mortgage payments but lack the funds to make a large down payment or otherwise have difficulty obtaining a mortgage. Borrowers with small down payments, weaker credit histories, or other characteristics that increase their credit risk might find it difficult to obtain a mortgage at an affordable interest rate or to qualify for a mortgage at all. This has raised a policy concern that some borrowers with the income to repay a mortgage might be unable to obtain affordable mortgages. FHA mortgage insurance is intended to make lenders more willing to offer affordable mortgages to these borrowers by insuring the lender against the possibility of borrower default. FHA-insured loans have lower down payment requirements than most conventional mortgages. (Conventional mortgages are mortgages that are not insured by FHA or guaranteed by another government agency, such as VA or USDA. ) Because saving for a down payment is often the biggest barrier to homeownership for first-time homebuyers and lower- or moderate-income homebuyers, the smaller down payment requirement for FHA-insured loans may allow some households to obtain a mortgage earlier than they otherwise could. (Borrowers with down payments of less than 20% could also obtain non-FHA mortgages with private mortgage insurance. See the nearby text box on "FHA and Private Mortgage Insurance.") FHA-insured mortgages also have less stringent requirements related to credit history than many conventional loans. This might make FHA-insured mortgages attractive to borrowers without traditional credit histories or with weaker credit histories, who would either find it difficult to take out a mortgage absent FHA insurance or may find it more expensive to do so. FHA-insured mortgages play a particularly large role for first-time homebuyers, low- and moderate-income households, and minorities. For example, 83% of FHA-insured mortgages made to purchase a home (rather than to refinance an existing mortgage) in FY2018 were obtained by first-time homebuyers. Over one-third of all FHA loans (both purchase and refinance loans) were obtained by minority households, and FHA-insured mortgages accounted for about 57% of all forward mortgages made to low- or moderate-income borrowers during the year. Since FHA-insured mortgages are often obtained by borrowers who cannot make large down payments or those with weaker credit histories, some have questioned whether FHA-insured mortgages are similar to subprime mortgages. Like subprime mortgages, FHA-insured mortgages are often obtained by borrowers with lower credit scores, though some borrowers with higher credit scores also obtain FHA-insured mortgages. However, FHA-insured mortgages are prohibited from carrying the full range of features that many subprime mortgages could carry. For example, FHA-insured loans must be fully documented, and they cannot include features such as negative amortization. (FHA mortgages can include adjustable interest rates.) Some of these types of features appear to have contributed to high default and foreclosure rates on subprime mortgages. Nevertheless, some have suggested that FHA-insured mortgages are too risky, and that they can harm borrowers by providing mortgages that often have a higher likelihood of default than other mortgages due to combinations of risk factors such as low down payments and lower credit scores. Traditionally, FHA plays a countercyclical role in the mortgage market, meaning that it tends to insure more mortgages when mortgage credit markets are tight and fewer mortgages when mortgage credit is more widely available. A major reason for this is that FHA continues to insure mortgages that meet its standards even during market downturns or in regions experiencing economic turmoil. When the economy is weak and lenders and private mortgage insurers tighten credit standards and reduce lending activity, FHA-insured mortgages may be the only mortgages available to some borrowers, or may have more favorable terms than mortgages that lenders are willing to make without FHA insurance. When the economy is strong and mortgage credit is more widely available, many borrowers may find it easier to qualify for affordable conventional mortgages. This section briefly describes some of the major features of FHA-insured mortgages for purchasing or refinancing a single-family home. Single-family homes are defined as properties with one to four separate dwelling units. FHA-insured loans are available to borrowers who intend to be owner-occupants and who can demonstrate the ability to repay the loan according to the terms of the contract. FHA-insured loans must be underwritten in accordance with accepted practices of prudent lending institutions and FHA requirements. Lenders must examine factors such as the applicant's credit, financial status, monthly shelter expenses, funds required for closing expenses, effective monthly income, and debts and obligations. In general, individuals who have previously been subject to a mortgage foreclosure are not eligible for FHA-insured loans for at least three years after the foreclosure. As a general rule, the applicant's prospective mortgage payment should not exceed 31% of gross effective monthly income. The applicant's total obligations, including the proposed housing expenses, should not exceed 43% of gross effective monthly income. If these ratios are not met, the borrower may be able to present the presence of certain compensating factors, such as cash reserves, in order to qualify for an FHA-insured loan. Since October 4, 2010, FHA has required a minimum credit score of 500, and has required higher down payments from borrowers with credit scores below 580 than from borrowers with credit scores above that threshold. See the " Down Payment " section for more information on down payment requirements for FHA-insured loans. In general, borrowers must intend to occupy the property as a principal residence. FHA-insured loans may be used to purchase one-family detached homes, townhomes, rowhouses, two- to four-unit buildings, manufactured homes and lots, and condominiums in developments approved by FHA. FHA-insured loans may also be obtained to build a home; to repair, alter, or improve a home; to refinance an existing home loan; to simultaneously purchase and improve a home; or to make certain energy efficiency or weatherization improvements in conjunction with a home purchase or mortgage refinance. FHA-insured mortgages may be obtained with loan terms of up to 30 years. The interest rate on an FHA-insured loan is negotiated between the borrower and lender. The borrower has the option of selecting a loan with an interest rate that is fixed for the life of the loan or one on which the rate may be adjusted annually. FHA requires a lower down payment than many other types of mortgages. Under changes made by the Housing and Economic Recovery Act of 2008 (HERA, P.L. 110-289 ), borrowers are required to contribute at least 3.5% in cash or its equivalent to the cost of acquiring a property with an FHA-insured mortgage. (Prior law had required borrowers to contribute at least 3% in cash or its equivalent.) Prohibited sources of the required funds include the home seller, any entity that financially benefits from the transaction, and any third party that is directly or indirectly reimbursed by the seller or by anyone that would financially benefit from the transaction. HUD has interpreted the 3.5% cash contribution as a down payment requirement and has specified that contributions toward closing costs cannot be counted toward it. Since October 4, 2010, FHA has required a 10% down payment from borrowers with credit scores between 500 and 579, while borrowers with credit scores of 580 or above are still required to make a down payment of at least 3.5%. FHA no longer insures loans made to borrowers with credit scores below 500. There is no income limit for borrowers seeking FHA-insured loans. However, FHA-insured mortgages cannot exceed a maximum mortgage amount set by law. The maximum mortgage amounts allowed for FHA-insured loans vary by area, based on a percentage of area median home prices. Different limits are in effect for one-unit, two-unit, three-unit, and four-unit properties. The limits are subject to a statutory floor and ceiling; that is, the maximum mortgage amount that FHA will insure in a given area cannot be lower than the floor, nor can it be higher than the ceiling. In 2008, Congress temporarily increased the maximum mortgage amounts in response to turmoil in the housing and mortgage markets, with the intention of allowing more households to qualify for FHA-insured mortgages during a period of tighter credit availability. New permanent maximum mortgage amounts were later established by the Housing and Economic Recovery Act of 2008. The maximum mortgage amounts established by HERA were higher than the previous permanent limits, but in many cases lower than the temporarily increased limits. However, the higher temporary limits were extended for several years, until they expired at the end of calendar year 2013. Since January 1, 2014, the maximum mortgage amounts have been set at the permanent HERA levels. For a one-unit home, HERA established the maximum mortgage amounts at 115% of area median home prices, with a floor set at 65% of the Freddie Mac conforming loan limit and a ceiling set at 150% of the Freddie Mac conforming loan limit. For calendar year 2019, the floor is $314,827 and the ceiling is $726,525. (That is, FHA will insure mortgages with principal balances up to $314,827 in all areas of the country. In higher-cost areas, it will insure mortgages with principal balances up to 115% of the area median home price, up to a cap of $726,525 in the highest-cost areas.) These maximum mortgage amounts, and the maximum mortgage amounts for 2-4 unit homes, are shown in Table 1 . Borrowers of FHA-insured loans pay an up-front mortgage insurance premium (MIP) and annual mortgage insurance premiums in exchange for FHA insurance. These premiums are set as a percentage of the loan amount. The maximum amounts that FHA is allowed to charge for the annual and the upfront premiums are set in statute. However, since these are maximum amounts, HUD has the discretion to set the premiums at lower levels. The maximum up-front premium that FHA may charge is 3% of the mortgage amount, or 2.75% of the mortgage amount for a first-time homebuyer who has received homeownership counseling. Currently, FHA is charging the same up-front premiums to first-time homebuyers who receive homeownership counseling and all other borrowers. Since April 9, 2012, HUD has set the up-front premium at 1.75% of the loan amount, whether or not the borrower is a first-time homebuyer who received homeownership counseling. This premium applies to most single-family mortgages. The amount of the maximum annual premium varies based on the loan's initial loan-to-value ratio. For most loans, (1) if the loan-to-value ratio is above 95%, the maximum annual premium is 1.55% of the loan balance, and (2) if the loan-to-value ratio is 95% or below, the maximum annual premium is 1.5% of the loan balance. FHA increased the actual annual premiums that it charges several times in recent years in order to bring more money into the FHA insurance fund and ensure that it has sufficient funds to pay for defaulted loans. However, in January 2015, FHA announced a decrease in the annual premium for most single-family loans. For most FHA case numbers assigned on or after January 26, 2015, the annual premiums are 0.85% of the outstanding loan balance if the initial loan-to-value ratio is above 95% and 0.80% of the outstanding loan balance if the initial loan-to-value ratio is 95% or below. This is a decrease from 1.35% and 1.30%, respectively, which is what FHA had been charging from April 1, 2013, until January 26, 2015. These premiums apply to most single-family mortgages; FHA charges different annual premiums in certain circumstances, including for loans with shorter loan terms or higher principal balances. Table 2 shows the up-front and annual mortgage insurance premiums that have been in effect for most loans since January 26, 2015. In the past, if borrowers prepaid their loans, they may have been due refunds of part of the up-front insurance premium that was not "earned" by FHA. The refund amount depended on when the mortgage closed and declined as the loan matured. The Consolidated Appropriations Act 2005 ( P.L. 108-447 ) amended the National Housing Act to provide that, for mortgages insured on or after December 8, 2004, borrowers are not eligible for refunds of up-front mortgage insurance premiums except when borrowers are refinancing existing FHA-insured loans with new FHA-insured loans. After three years, the entire up-front insurance premium paid by borrowers who refinance existing FHA-insured loans with new FHA-insured loans is considered "earned" by FHA, and these borrowers are not eligible for any refunds. The annual mortgage insurance premiums are not refundable. However, beginning with loans closed on or after January 1, 2001, FHA had followed a policy of automatically cancelling the annual mortgage insurance premium when, based on the initial amortization schedule, the loan balance reached 78% of the initial property value. However, for loans with FHA case numbers assigned on or after June 3, 2013, FHA will continue to charge the annual mortgage insurance premium for the life of the loan for most mortgages. This change responded to concerns about the financial status of the FHA insurance fund. FHA has stated that, since it continues to insure the entire remaining mortgage amount for the life of the loan, and since premiums were cancelled on the basis of the loan amortizing to a percentage of the initial property value rather than the current value of the home, FHA has at times had to pay insurance claims on defaulted mortgages where the borrowers were no longer paying annual mortgage insurance premiums. An FHA-insured mortgage is considered delinquent any time a payment is due and not paid. Once the borrower is 30 days late in making a payment, the mortgage is considered to be in default. In general, mortgage servicers may initiate foreclosure on an FHA-insured loan when three monthly installments are due and unpaid, and they must initiate foreclosure when six monthly installments are due and unpaid, except when prohibited by law. A program of loss mitigation strategies was authorized by Congress in 1996 to minimize the number of FHA loans entering foreclosure, and has since been revised and expanded to include additional loss mitigation options. Prior to initiating foreclosure, mortgage servicers must attempt to make contact with borrowers and evaluate whether they qualify for any of these loss mitigation options. The options must be considered in a specific order, and specific eligibility criteria apply to each option. Some loss mitigation options, referred to as home retention options, are intended to help borrowers remain in their homes. Other loss mitigation options, referred to as home disposition options, will result in the borrower losing his or her home, but avoiding some of the costs of foreclosure. The loss mitigation options that servicers are instructed to pursue on FHA-insured loans are summarized in Table 3 . Additional loss mitigation options are available for certain populations of borrowers. For example, defaulted borrowers in military service may be eligible to suspend the principal portion of monthly payments and pay only interest for the period of military service, plus three months. On resumption of payment, loan payments are adjusted so that the loan will be paid in full according to the original amortization. Certain loss mitigation options are also available in areas affected by presidentially declared major disasters. FHA's single-family mortgage insurance program is funded through FHA's Mutual Mortgage Insurance Fund (MMI Fund). Cash flows into the MMI Fund primarily from insurance premiums and proceeds from the sale of foreclosed homes. Cash flows out of the MMI Fund primarily to pay claims to lenders for mortgages that have defaulted. This section provides a brief overview of (1) how the FHA-insured mortgages insured under the MMI Fund are accounted for in the federal budget and (2) the MMI Fund's compliance with a statutory capital ratio requirement. For more detailed information on the financial status of the MMI Fund, see CRS Report R42875, FHA Single-Family Mortgage Insurance: Financial Status of the Mutual Mortgage Insurance Fund (MMI Fund) . The Federal Credit Reform Act of 1990 (FCRA) specifies the way in which the costs of federal loan guarantees, including FHA-insured loans, are recorded in the federal budget. The FCRA requires that the estimated lifetime cost of guaranteed loans (in net present value terms) be recorded in the federal budget in the year that the loans are insured. When the present value of the lifetime cash flows associated with the guaranteed loans is expected to result in more money coming into the account than flowing out of it, the program is said to generate negative credit subsidy. When the present value of the lifetime cash flows associated with the guaranteed loans is expected to result in less money coming into the account than flowing out of it, the program is said to generate positive credit subsidy. Programs that generate negative credit subsidy result in offsetting receipts for the federal government, while programs that generate positive credit subsidy require an appropriation to cover the cost of new loan guarantees. The MMI Fund has historically been estimated to generate negative credit subsidy in the year that the loans are insured and therefore has not required appropriations to cover the expected costs of loans to be insured. The MMI Fund does receive appropriations to cover salaries and administrative contract expenses. The amount of money that loans insured in a given year actually earn for or cost the government over the course of their lifetime is likely to be different from the original credit subsidy estimates. Therefore, each year as part of the annual budget process, each prior year's credit subsidy rates are re-estimated based on the actual performance of the loans and other factors, such as updated economic projections. These re-estimates affect the way in which funds are held in the MMI Fund's two primary accounts: the Financing Account and the Capital Reserve Account. The Financing Account holds funds to cover expected future costs of FHA-insured loans. The Capital Reserve Account holds additional funds to cover any additional unexpected future costs. Funds are transferred between the two accounts each year on the basis of the re-estimated credit subsidy rates to ensure that enough is held in the Financing Account to cover updated projections of expected costs of insured loans. If FHA ever needs to transfer more funds to the Financing Account than it has in the Capital Reserve Account, it can receive funds from Treasury to make this transfer under existing authority and without any additional congressional action. This occurred for the first time at the end of FY2013, when FHA received $1.7 billion from Treasury to make a required transfer of funds between the accounts. The funds that FHA received from Treasury did not need to be spent immediately, but were to be held in the Financing Account and used to pay insurance claims, if necessary, only after the remaining funds in the Financing Account were spent. The MMI Fund has not needed any additional funds from Treasury to make required transfers of funds between the two accounts since that time. The MMI Fund is also required by statute to maintain a capital ratio of at least 2%, which is intended to ensure that the fund is able to withstand some increases in the costs of loans guaranteed under the insurance fund. The capital ratio measures the amount of funds that the MMI Fund currently has on hand, plus the net present value of the expected future cash flows associated with the mortgages that FHA currently insures (e.g., the amounts it expects to earn through premiums and lose through claims paid). It then expresses this amount as a percentage of the total dollar volume of mortgages that FHA currently insures. In other words, the capital ratio is a measure of the amount of funds that would remain in the MMI Fund after all expected future cash flows on the loans that it currently insures have been realized, assuming that FHA did not insure any more loans going forward. Beginning in FY2009, and for several years thereafter, the capital ratio was estimated to be below this mandated 2% level. The capital ratio again exceeded the 2% threshold in FY2015, when it was estimated to be 2.07%. This represented an improvement from an estimated capital ratio of 0.41% at the end of FY2014, and from negative estimated capital ratios at the ends of FY2013 and FY2012. The capital ratio has remained above 2% since that time, and was estimated to be 2.76% in FY2018. A low or negative capital ratio does not in itself trigger any special assistance from Treasury, but it raises concerns that FHA could need assistance in order to continue to hold enough funds in the Financing Account to cover expected future losses. In the years since the housing market turmoil that began around 2007, FHA has taken a number of steps designed to strengthen the insurance fund. These steps have included increasing the mortgage insurance premiums charged to borrowers; strengthening underwriting requirements, such as by instituting higher down payment requirements for borrowers with the lowest credit scores; and increasing oversight of FHA-approved lenders. The number of new mortgages insured by FHA in a given year depends on a variety of factors. In general, the number of new mortgages insured by FHA increased during the housing market turmoil (and resulting contraction of mortgage credit) that began around 2007, reaching a peak of 1.8 million mortgages in FY2009 before beginning to decrease somewhat. FY2014 was the only year since FY2007 that FHA insured fewer than 1 million new mortgages. As shown in Table 4 , FHA insured just over 1 million new single-family purchase and refinance mortgages in FY2018. Together, these mortgages had an initial loan balance of $209 billion. About 77% (776,284) of the mortgages were for home purchases, while about 23% (238,325) were for refinancing an existing mortgage. The overall number of mortgages insured by FHA in FY2018 represented a decrease from FY2017, when it insured 1.25 million mortgages. Many FHA-insured mortgages are obtained by first-time homebuyers, lower-and moderate-income homebuyers, and minority homebuyers. Of the home purchase mortgages insured by FHA in FY2018, about 83% were made to first-time homebuyers. Over a third of all mortgages (both for home purchases and refinances) insured by FHA in FY2018 were made to minority borrowers. As shown in Table 5 , at the end of FY2018 FHA was insuring a total of over 8 million single-family loans that together had an outstanding balance of nearly $1.2 trillion. Since it was first established in 1934, FHA has insured a total of over 47.5 million home loans. FHA's share of the mortgage market is the amount of mortgages that are insured by FHA compared to the total amount of mortgages originated or outstanding in a given time period. FHA's market share can be measured in a number of different ways. Therefore, when evaluating FHA's market share, it is important to recognize which of several different figures is being reported. First, FHA's share of the mortgage market can be computed as the number of FHA-insured mortgages divided by the total number of mortgages, or as the dollar volume of FHA-insured mortgages divided by the total dollar volume of mortgages. Furthermore, FHA's market share is sometimes reported as a share of all mortgages , and sometimes only as a share of home purchase mortgages (as opposed to both mortgages made to purchase a home and mortgages made to refinance an existing mortgage). A market share figure can be reported as a share of all mortgages originated within a specific time period , such as a given year, or as a share of all mortgages outstanding at a point in time , regardless of when they were originated. Finally, FHA's market share is sometimes also reported as a share of the total number of mortgages that have some kind of mortgage insurance (including mortgages with private mortgage insurance and mortgages insured by another government agency) rather than as a share of all mortgages regardless of whether or not they have mortgage insurance. FHA's market share tends to fluctuate in response to economic conditions and other factors. Between calendar years 1996 and 2002, FHA's market share averaged about 14% of the home purchase mortgage market and about 11% of the overall mortgage market (both home purchase mortgages and refinance mortgages), as measured by number of mortgages. However, by 2005 FHA's market share had fallen to less than 5% of home-purchase mortgages and about 3% of the overall mortgage market. Subsequently, as economic conditions worsened and mortgage credit tightened in response to housing market turmoil that began around 2007, FHA's market share rose sharply, peaking at over 30% of home-purchase mortgages in 2009 and 2010, and over 20% of all mortgages (including both home purchases and refinances) in 2009. In 2017, FHA insured 19.5% of new home purchase mortgages and about 16.7% of new mortgages overall, a small decrease compared to its market share in 2016. Figure 1 shows FHA's market share as a percentage of the total number of new mortgages originated for each calendar year between 1996 and 2017. As described, FHA's market share can be measured in a number of different ways. The figure shows FHA's share of (1) all newly originated mortgages, (2) just newly originated purchase mortgages, and (3) just newly originated refinance mortgages. FHA's share of home purchase mortgages tends to be the highest, largely because borrowers who refinance are more likely to have built up a greater amount of equity in their homes and, therefore, might be more likely to obtain conventional mortgages. For the number of mortgages insured by FHA in each year calendar since 1996, see the Appendix . The increase in FHA's market share after 2007 was due to a variety of factors related to the housing market turmoil and broader economic instability that was taking place at the time. Housing and economic conditions led many banks to limit their lending activities, including lending for mortgages. Similarly, private mortgage insurance companies, facing steep losses from past mortgages, began tightening the underwriting criteria for mortgages that they would insure. Furthermore, in 2008 Congress increased the maximum mortgage amounts that FHA can insure, which may have made FHA-insured mortgages a more viable option for some borrowers in certain areas. More recently, FHA's market share has decreased somewhat from its peak during the housing market turmoil, although it generally remains somewhat higher than it was in the late 1990s and early 2000s. A number of factors may have contributed to this decrease, including lower loan limits in some high-cost areas, higher mortgage insurance premiums, and greater availability of non-FHA-insured mortgages. While not the focus of this report, the appropriate market share for FHA has been a subject of ongoing debate among policymakers. It is likely to continue to be a topic of debate, both in the context of policies specifically related to FHA as well as part of broader debate about the future of the U.S. housing finance system. Table A-1 provides data on the number of mortgages insured by FHA in each calendar year since 1996, along with FHA's overall market share in each calendar year.
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The Federal Housing Administration (FHA), an agency of the Department of Housing and Urban Development (HUD), was created by the National Housing Act of 1934. FHA insures private lenders against the possibility of borrowers defaulting on mortgages that meet certain criteria, thereby expanding the availability of mortgage credit beyond what may be available otherwise. If the borrower defaults on the mortgage, FHA is to repay the lender the remaining amount owed. A household that obtains an FHA-insured mortgage must meet FHA's eligibility and underwriting standards, including showing that it has sufficient income to repay a mortgage. FHA requires a minimum down payment of 3.5% from most borrowers, which is lower than the down payment required for many other types of mortgages. FHA-insured mortgages cannot exceed a statutory maximum mortgage amount, which varies by area and is based on area median house prices but cannot exceed a specified ceiling in high-cost areas. (The ceiling is set at $726,525 in high-cost areas in calendar year 2019.) Borrowers are charged fees, called mortgage insurance premiums, in exchange for the insurance. In FY2018, FHA insured over 1 million new mortgages (including both home purchase and refinance mortgages) with a combined principal balance of $209 billion. FHA's share of the mortgage market tends to vary with economic conditions and other factors. In the aftermath of the housing market turmoil that began around 2007 and a related contraction of mortgage lending, FHA insured a larger share of mortgages than it had in the preceding years. Its overall share of the mortgage market increased from about 3% in calendar year 2005 to a peak of 21% in 2009. Since that time, FHA's share of the mortgage market has decreased somewhat, though it remains higher than it was in the early 2000s. In calendar year 2017, FHA's overall share of the mortgage market was about 17%. FHA-insured mortgages, like all mortgages, experienced increased default rates during the housing downturn that began around 2007, leading to concerns about the stability of the FHA insurance fund for single-family mortgages, the Mutual Mortgage Insurance Fund (MMI Fund). In response to these concerns, FHA adopted a number of policy changes in an attempt to limit risk to the MMI Fund. These changes have included raising the fees that it charges and making changes to certain eligibility criteria for FHA-insured loans.
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The 116 th Congress continues its interest in U.S. research and development (R&D) and in evaluating support for federal R&D activities. The federal government has played an important role in supporting R&D efforts that have led to scientific breakthroughs and new technologies, from jet aircraft and the internet to communications satellites, shale gas extraction, and defenses against disease. In recent years, widespread concerns about the federal debt, recent and projected federal budget deficits, and federal budget caps have driven difficult decisions about the prioritization of R&D, both in the context of the entire federal budget and among competing needs within the federal R&D portfolio. Increases in the budget caps for FY2018 and FY2019 reduced some of the pressure affecting these decisions, but the concerns remain and the caps for FY2020 have not been increased. The U.S. government supports a broad range of scientific and engineering R&D. Its purposes include specific concerns such as addressing national defense, health, safety, the environment, and energy security; advancing knowledge generally; developing the scientific and engineering workforce; and strengthening U.S. innovation and competitiveness in the global economy. Most of the R&D funded by the federal government is performed in support of the unique missions of individual funding agencies. The federal R&D budget is an aggregation of the R&D activities of these agencies. There is no single, centralized source of R&D funds. Agency R&D budgets are developed internally as part of each agency's overall budget development process. R&D funding may be included either in accounts that are entirely devoted to R&D or in accounts that include funding for non-R&D activities. Agency budgets are subjected to review, revision, and approval by the Office of Management and Budget (OMB) and become part of the President's annual budget submission to Congress. The federal R&D budget is then calculated by aggregating the R&D activities of each federal agency. Congress plays a central role in defining the nation's R&D priorities as it makes decisions about the level and allocation of R&D funding—overall, within agencies, and for specific programs. In recent years, some Members of Congress have expressed concerns about the level of federal spending (for R&D and for other purposes) in light of the federal deficit and debt. Other Members of Congress have expressed support for increased federal spending for R&D as an investment in the nation's future competitiveness. As Congress acts to complete the FY2020 appropriations process, it faces two overarching issues: the amount of the federal budget to be spent on federal R&D and the prioritization and allocation of the available funding. This report begins with a discussion of the overall level of R&D in President Trump's FY2020 budget request, followed by analyses of R&D funding in the request from a variety of perspectives and for selected multiagency R&D initiatives. The remainder of the report discusses and analyzes the R&D budget requests of selected federal departments and agencies that, collectively, account for approximately 99% of total federal R&D funding. Selected terms associated with federal R&D funding are defined in the text box on the next page. Appendix A provides a list of acronyms and abbreviations. On March 11, 2019, President Trump released his proposed FY2020 budget. He provided additional details the following week. Completion of the FY2019 budget process on February 15, 2019, more than four months after the start of FY2019, as well as a government shutdown, led to both a delay in the scheduled release of the President's FY2020 budget request, and the use by the Office of Management and Budget of a mix of estimated continuing appropriations act FY2019 funding levels (generally, for agencies whose FY2019 appropriations were enacted after the start of FY2019) and enacted FY2019 funding levels (generally, for agencies whose appropriations were enacted prior to the start of FY2019). As a result, the aggregate (total) FY2019 R&D funding levels for all agencies in the Analytical Perspectives addendum to the President's FY2020 budget are estimated "using FY 2019 enacted appropriations where available and annualized Continuing Resolution [levels] for agencies without enacted appropriations prior to Feb. 15, 2019." With enactment of the remaining FY2019 appropriations acts in the Consolidated Appropriations Act, 2019 (P.L. 116-6), the Administration's estimated aggregate R&D funding level no longer accurately reflects total enacted FY2019 R&D funding. OMB has not issued a document with comprehensive R&D figures for each agency or in aggregate. Therefore, the analysis of government-wide R&D funding in this report, as well as of some of the individual agency analyses, compares the President's request for FY2020 to the FY2018 actual level. As information about the agencies' FY2019 R&D levels becomes available, the agency sections of this report will be updated to reflect that information and to make comparisons to the President's FY2020 request. President Trump is proposing approximately $134.1 billion for R&D for FY2020, a decrease of $1.7 billion (1.2%) below the FY2018 level of $135.8 billion. Adjusted for inflation, the President's FY2020 R&D request represents a constant-dollar decrease of 5.2% from the FY2018 actual level. The President's request includes continued R&D funding for existing single-agency and multiagency programs and activities, as well as new initiatives. This report provides government-wide, multiagency, and individual agency analyses of the President's FY2020 request as it relates to R&D and related activities. Additional information and analysis will be included as the House and Senate act on the President's budget request through appropriations bills. Federal R&D funding can be analyzed from a variety of perspectives that provide different insights. The following sections examine the data by agency, by the character of the work supported, and by a combination of these two perspectives. Congress makes decisions about R&D funding through the authorization and appropriations processes primarily from the perspective of individual agencies and programs. Table 1 provides data on R&D funding by agency for FY2018 (actual), FY2019 (enacted, for selected agencies), and FY2020 (request). Enacted data for FY2019 is provided only for agencies whose FY2019 appropriations process was completed before the FY2020 budget request was finalized. Under the request, eight federal agencies would receive more than 97% of total federal R&D funding in FY2020: the Department of Defense, 44.3%; Department of Health and Human Services (HHS), primarily the National Institutes of Health (NIH), 25.1%; Department of Energy (DOE), 11.0%; National Aeronautics and Space Administration, 8.4%; National Science Foundation (NSF), 4.3%; Department of Agriculture (USDA), 1.8%; Department of Commerce (DOC), 1.3%; and Department of Veterans Affairs (VA), 1.0%. This report provides an analysis of the R&D budget requests for these agencies, as well as for the Department of Homeland Security (DHS), Department of the Interior (DOI), Department of Transportation (DOT), and Environmental Protection Agency (EPA). All but three federal agencies would see their R&D funding decrease under the President's FY2020 request compared to FY2018. The only agencies with increased R&D funding in FY2020 relative to the FY2018 level would be DOD (up $7.077 billion, 13.5%), VA (up $39 million, 3.0%), and DOT (up $33 million, 3.2%). The agencies with largest R&D funding declines in the FY2020 request compared to FY2018 (as measured in dollars) would occur in the budgets of HHS (down $3.249 billion, 8.8%), DOE (down $2.764 billion, 15.8%), NSF (down $567 million, 29.7%), and NASA (down $475 million, 4.0%). Among agencies for which FY2019 enacted funding is shown in the President's budget, FY2020 R&D funding would increase only for DOD (up $3.631 billion, 6.5%). HHS R&D funding would decline by $4.954 billion (12.8%). DOE R&D funding would decline by $3.075 billion (17.3%). VA R&D funding would decline by $17 million (1.3%). Department of Education R&D funding would decline by $34 million (13.2%). See Table 1 . Federal R&D funding can also be examined by the character of work it supports—basic research, applied research, or development—and by funding provided for construction of R&D facilities and acquisition of major R&D equipment. (See Table 2 .) President Trump's FY2020 request includes $35.164 billion for basic research, down $1.452 billion (4.0%) from FY2018; $40.707 billion for applied research, down $4.264 billion (10.5%); $59.108 billion for development, up $4.543 billion (8.3%); and $3.382 billion for facilities and equipment, down $495 million (12.8%). A primary policy justification for public investments in basic research and for incentives (e.g., tax credits) for the private sector to conduct research is the view, widely held by economists, that the private sector will, left on its own, underinvest in basic research from a societal perspective. The usual argument for this view is that the social returns (i.e., the benefits to society at large) exceed the private returns (i.e., the benefits accruing to the private investor, such as increased revenues or higher stock value). Other factors that may inhibit corporate investment in basic research include long time horizons for achieving commercial applications (diminishing the potential returns due to the time value of money), high levels of technical risk/uncertainty, shareholder demands for shorter-term returns, and asymmetric and imperfect information. The federal government is the nation's largest supporter of basic research, funding 42% of U.S. basic research in 2017. Business funded 30% of U.S. basic research in 2017, with state governments, universities, and other nonprofit organizations funding the remaining 29%. For U.S. applied research, business is the primary funder, accounting for an estimated 55% in 2017, while the federal government accounted for an estimated 33%. State governments, universities, and other nonprofit organizations funded the remaining 12%. Business also provides the vast majority of U.S. funding for development. Business accounted for 85% of development funding in 2017, while the federal government provided 13%. State governments, universities, and other nonprofit organizations funded the remaining 2% (see Figure 1 ). Federal R&D funding can also be viewed from the combined perspective of each agency's contribution to basic research, applied research, development, and facilities and equipment. Table 3 lists the three agencies with the most funding in each of these categories as proposed in the President's FY2020 budget. The overall federal R&D budget reflects a wide range of national priorities, including supporting advances in spaceflight, developing new and affordable sources of energy, and understanding and deterring terrorist groups. These priorities and the mission of each individual agency contribute to the composition of that agency's R&D spending (i.e., the allocation among basic research, applied research, development, and facilities and equipment). In the President's FY2020 budget request, the Department of Health and Human Services, primarily NIH, would account for nearly half (47.7%) of all federal funding for basic research. HHS would also be the largest federal funder of applied research, accounting for about 45.6% of all federally funded applied research in the President's FY2020 budget request. DOD would be the primary federal funder of development, accounting for 87.4% of total federal development funding in the President's FY2020 budget request. DOE would be the primary federal funder of facilities and equipment, accounting for 50.5% of total federal facilities and equipment funding in the President's FY2020 budget request. For many years, presidential budgets have reported on multiagency R&D initiatives. Often, they have also provided details of agency funding for these initiatives. Some of these efforts have a statutory basis—for example, the Networking and Information Technology Research and Development (NITRD) program, the National Nanotechnology Initiative (NNI), and the U.S. Global Change Research Program (USGCRP). These programs generally produce annual budget supplements identifying objectives, activities, funding levels, and other information, usually published shortly after the presidential budget release. Other multiagency R&D initiatives have operated at the discretion of the President without such a basis and may be eliminated at the discretion of the President. President Trump's FY2020 budget is largely silent on funding levels for these efforts and whether any or all of the nonstatutory initiatives will continue. Some activities related to these initiatives are discussed in agency budget justifications and may be addressed in the agency analyses later in this report. This section provides available multiagency information on these initiatives and will be updated as additional information becomes available. Established by the High-Performance Computing Act of 1991 ( P.L. 102-194 ), the Networking and Information Technology Research and Development program is the primary mechanism by which the federal government coordinates its unclassified networking and information technology R&D investments in areas such as supercomputing, high-speed networking, cybersecurity, software engineering, and information management. In FY2019, 21 agencies are NITRD members; nonmember agencies also participate in NITRD activities. NITRD efforts are coordinated by the National Science and Technology Council (NSTC) Subcommittee on Networking and Information Technology Research and Development. P.L. 102-194 , as reauthorized by the American Innovation and Competitiveness Act of 2017 ( P.L. 114-329 ), requires the director of NITRD to prepare an annual report to be delivered to Congress along with the President's budget request. This annual report is to include, among other things, detailed information on the program's budget for the current and previous fiscal years, and the proposed budget for the next fiscal year. The latest annual report was published in August 2018 and related to the FY2019 budget request. President Trump requested $5,277.6 million for NITRD research in FY2019. In FY2017, NITRD funding was $5,126.4 million. The President's FY2020 budget does not identify aggregate funding levels for NITRD for FY2018 (actual), FY2019 (estimate), or FY2020 (request). The FY2020 NSF budget request includes $1.20 billion in NITRD funding for FY2020, a decrease of $98.2 million (7.6%) from FY2018 (actual). For additional information on the NITRD program, see CRS Report RL33586, The Federal Networking and Information Technology Research and Development Program: Background, Funding, and Activities , by Patricia Moloney Figliola. Additional NITRD information also can be obtained at https://www.nitrd.gov . The U.S. Global Change Research Program coordinates and integrates federal research and applications to understand, assess, predict, and respond to human-induced and natural processes of global change. The program seeks to advance global climate change science and to "build a knowledge base that informs human responses to climate and global change through coordinated and integrated Federal programs of research, education, communication, and decision support." In FY2018, 13 departments and agencies participated in the USGCRP. USGCRP efforts are coordinated by the NSTC Subcommittee on Global Change Research. Each agency develops and carries out its activities as its contribution to the USGCRP, and funds are appropriated to each agency for those activities; those activities may or may not be identified as associated with the USGCRP in the President's annual budget proposal or each agency's budget justification to Congress. The Global Change Research Act of 1990 (GCRA) (P.L. 101-606) requires each federal agency or department involved in global change research to report annually to Congress on each element of its proposed global change research activities, as well as the portion of its budget request allocated to each element of the program. The President is also required to identify those activities and the annual global change research budget in the President's annual budget request to Congress. Some, but not all, participating agencies provide the required information in their budget justifications. In addition, in almost each of the past 17 years, language in appropriations laws has required the President to submit a comprehensive report to the appropriations committees "describing in detail all Federal agency funding, domestic and international, for climate change programs, projects, and activities … including an accounting of funding by agency…." The President's most recent report was submitted in January 2017 for the FY2017 request. This section will be updated when the USGCRP updates its budget information. The President's FY2020 budget does not identify aggregate funding levels for USGCRP for FY2018 (actual), FY2019 (estimate), or the FY2020 (request). Without budget reports pursuant to the GCRP Act or appropriations laws, the budget authority or expenditures publicly reported by agencies is generally insufficient to independently build a complete and consistent estimate of funding for the USGCRP. Below are results of CRS research for selected agencies, which incompletely represent federal funding in recent years thats support the USGCRP. The President's FY2020 budget does not identify aggregate funding levels for USGCRP for FY2018 (actual), FY2019 (estimate), or the FY2020 (request). Without budget reports pursuant to the GCRP Act or appropriations laws, the budget authority or expenditures publicly reported by agencies is generally insufficient to independently build a complete and consistent estimate of funding for the USGCRP. Table 5 presents results of CRS research for selected agencies, which incompletely represent federal funding in recent years that supports the USGCRP. For additional information on the USGCRP, see CRS Report R43227, Federal Climate Change Funding from FY2008 to FY2014 , by Jane A. Leggett, Richard K. Lattanzio, and Emily Bruner. Additional USGCRP information also can be obtained at http://www.globalchange.gov . Launched in FY2001, the National Nanotechnology Initiative is a multiagency R&D initiative to advance understanding and control of matter at the nanoscale, where the physical, chemical, and biological properties of materials differ in fundamental and useful ways from the properties of individual atoms or bulk matter. In 2003, Congress enacted the 21 st Century Nanotechnology Research and Development Act ( P.L. 108-153 ), providing a legislative foundation for some of the activities of the NNI. NNI efforts are coordinated by the NSTC Subcommittee on Nanoscale Science, Engineering, and Technology (NSET). In FY2019, the President's request included NNI funding for 16 federal departments and independent agencies and commissions with budgets dedicated to nanotechnology R&D. The NSET includes other federal departments and independent agencies and commissions with responsibilities for health, safety, and environmental regulation; trade; education; intellectual property; international relations; and other areas that might affect or be affected by nanotechnology. P.L. 108-153 requires the NSTC to prepare an annual report to be delivered to Congress at the time the President's budget request is sent to Congress. This annual report is to include detailed information on the program's budget for the current fiscal year and the program's proposed budget for the next fiscal year, as well as additional information and data related to the performance of the program. The latest annual report was published in August 2018. President Trump requested $1,395.6 million for NNI research in FY2019. In FY2017, NNI funding was $1,552.3 million. The President's FY2020 budget does not identify aggregate funding levels for NNI for FY2018 (actual), FY2019 (enacted), or FY2020 (request). The NSF budget request includes $389 million in NNI funding for FY2020, $179 million (31.4%) less than in FY2018. For additional information on the NNI, see CRS Report RL34401, The National Nanotechnology Initiative: Overview, Reauthorization, and Appropriations Issues , by John F. Sargent Jr. Additional NNI information also can be obtained at http://www.nano.gov . In February 2019, President Trump signed Executive Order 13859 establishing an American Artificial Intelligence Initiative to accelerate national leadership in artificial intelligence (AI). Among other things, the EO directs the heads of implementing agencies that perform or fund R&D to consider AI as an agency R&D priority, in accordance with their missions and consistent with applicable law. In particular, the EO directs the Secretaries of Defense, Commerce, Health and Human Services, and Energy, the Administrator of the National Aeronautics and Space Administration, and the Director of the National Science Foundation to prioritize the allocation of high-performance computing resources for AI-related applications through increased assignment of discretionary funding and any other appropriate mechanisms. According to Analytical Perspectives, the President's FY2020 budget would provide approximately $850 million for this initiative to the Department of Energy, National Institutes of Health, National Institute of Standards and Technology, and National Science Foundation. In December 2018, President Trump signed the National Quantum Initiative Act (P.L. 115-368) establishing a National Quantum Initiative with the stated purpose of ensuring "the continued leadership of the United States in quantum information science [QIS] and its technology applications." The act requires the establishment of a 10-year plan to accelerate the development of QIS and technology applications. According to Analytical Perspectives , the President's FY2020 budget includes approximately $430 million for this initiative at DOD, DOE, NIST, and NSF. A number of presidential initiatives without statutory foundations were in operation at the end of the Obama Administration, but have not been addressed explicitly in President Trump's FY2018, FY2019, or FY2020 budgets. Two of these are part of the Advanced Manufacturing Partnership (AMP): the National Robotics Initiative (NRI) and Manufacturing USA (formerly known as the National Network for Manufacturing Innovation or NNMI). According to Analytical Perspectives , the President's FY2020 budget prioritizes R&D aimed at advances in manufacturing and the integration of those advances into the domestic supply chain to reduce U.S. reliance on foreign sources of critical products. Budget priorities include intelligent manufacturing systems, materials and processing technologies, advances in semiconductor design and fabrication, and innovations in food and agricultural manufacturing. Other initiatives include the Cancer Moonshot, the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative, the Precision Medicine Initiative (PMI), the Materials Genome Initiative (MGI), and an effort to double federal funding for clean energy R&D. Some of the activities of these initiatives are discussed in agency budget justifications and the agency analyses later in this report. The remainder of this report provides a more in-depth analysis of R&D in 12 federal departments and agencies that, in aggregate, receive nearly 99% of total federal R&D funding. Agencies are presented in order of the size of their FY2020 R&D budget requests, with the largest presented first. Annual appropriations for these agencies are provided through 9 of the 12 regular appropriations bills. For each agency covered in this report, Table 7 shows the corresponding regular appropriations bill that provides primary funding for the agency, including its R&D activities. Because of the way that agencies report budget data to Congress, it can be difficult to identify the portion that is R&D. Consequently, R&D data presented in the agency analyses in this report may differ from R&D data in the President's budget or otherwise provided by OMB. Funding for R&D is often included in appropriations line items that also include non-R&D activities; therefore, in such cases, it may not be possible to identify precisely how much of the funding provided in appropriations laws is allocated to R&D specifically. In general, R&D funding levels are known only after departments and agencies allocate their appropriations to specific activities and report those figures. As of the date of this report, the House had completed action on none of the 12 regular appropriations bills for FY2020; the Senate had completed action on none of the bills. None of the 12 had been enacted as law. This report will be updated as Congress takes additional actions to complete the FY2020 appropriations process. In addition to this report, CRS produces individual reports on each of the appropriations bills. These reports can be accessed via the CRS website at http://www.crs.gov/iap/appropriations . Also, the status of each appropriations bill is available on the CRS web page, Status Table of Appropriations , available at http://www.crs.gov/AppropriationsStatusTable/Index . The mission of the Department of Defense is to provide "the military forces needed to deter war and ensure our nation's security." Congress supports research and development activities at DOD primarily through the department's Research, Development, Test, and Evaluation (RDT&E) funding. These funds support the development of the nation's future military hardware and software and the science and technology base upon which those products rely. Most of what DOD spends on RDT&E is appropriated in Title IV of the annual defense appropriations bill. (See Table 8 .) However, RDT&E funds are also appropriated in other parts of the bill. For example, RDT&E funds are appropriated as part of the Defense Health Program, the Chemical Agents and Munitions Destruction Program, and the National Defense Sealift Fund. The Defense Health Program (DHP) supports the delivery of health care to DOD personnel and their families. DHP funds (including the RDT&E funds) are requested through the Defense-wide Operations and Maintenance appropriations request. The program's RDT&E funds support congressionally directed research on breast, prostate, and ovarian cancer; traumatic brain injuries; orthotics and prosthetics; and other medical conditions. Congress appropriates funds for this program in Title VI (Other Department of Defense Programs) of the defense appropriations bill. The Chemical Agents and Munitions Destruction Program supports activities to destroy the U.S. inventory of lethal chemical agents and munitions to avoid future risks and costs associated with storage. Funds for this program are requested through the Defense-wide Procurement appropriations request. Congress appropriates funds for this program also in Title VI. The National Defense Sealift Fund supports the procurement, operation and maintenance, and research and development associated with the nation's naval reserve fleet and supports a U.S. flagged merchant fleet that can serve in time of need. In some fiscal years, RDT&E funding for this effort is requested in the Navy's Procurement request and appropriated in Title V (Revolving and Management Funds) of the appropriations bill. RDT&E funds also have been requested and appropriated as part of DOD's separate funding to support efforts in what the George W. Bush Administration termed the Global War on Terror (GWOT) and what the Obama and Trump Administrations have referred to as Overseas Contingency Operations (OCO). In appropriations bills, the term Overseas Contingency Operations/Global War on Terror (OCO/GWOT) has been used; President Trump's FY2020 budget uses the term Overseas Contingency Operations. Typically, the RDT&E funds appropriated for OCO activities go to specified Program Elements (PEs) in Title IV. According to the Comptroller of the Department of Defense, the FY2020 OCO request is divided into three requirement categories—direct war, enduring, and OCO for base. For purposes of this report, these categories of OCO funding requests will be reported collectively. In addition, OCO/GWOT-related requests/appropriations have included money for a number of transfer funds. In the past, these have included the Iraqi Freedom Fund (IFF), the Iraqi Security Forces Fund, the Afghanistan Security Forces Fund, and the Pakistan Counterinsurgency Capability Fund. Congress typically has made a single appropriation into each such fund and authorized the Secretary to make transfers to other accounts, including RDT&E, at his discretion. These transfers are eventually reflected in Title IV prior-year funding figures. For FY2020, the Trump Administration is requesting $104.294 billion for DOD's Title IV RDT&E PEs (base plus OCO), $8.334 billion (8.7%) above the enacted FY2019 level. (See Table 8 .) In addition, the request includes $732.3 million in RDT&E through the Defense Health Program (DHP; down $1.447 billion, 66.4% from FY2019), $875.9 million in RDT&E through the Chemical Agents and Munitions Destruction program (down $10.8 million, 1.2% from FY2019), and $3.0 million for the Inspector General for RDT&E-related activities (down $1.0 million, 25.4% from FY2019). The FY2020 budget included no RDT&E funding via the National Defense Sealift Fund, the same as the FY2019 enacted level. RDT&E funding can be analyzed in different ways. RDT&E funding can be characterized organizationally. Each of military department requests and receives its own RDT&E funding. So, too, do various DOD agencies (e.g., the Missile Defense Agency and the Defense Advanced Research Projects Agency), collectively aggregated within the Defense-Wide account. RDT&E funding also can be characterized by budget activity (i.e., the type of RDT&E supported). Those budget activities designated as 6.1, 6.2, and 6.3 (basic research, applied research, and advanced technology development, respectively) constitute what is called DOD's Science and Technology program (S&T) and represent the more research-oriented part of the RDT&E program. Budget activities 6.4 and 6.5 focus on the development of specific weapon systems or components for which an operational need has been determined and an acquisition program established. Budget activity 6.6 provides management support, including support for test and evaluation facilities. Budget activity 6.7 supports the development of system improvements in existing operational systems. Many congressional policymakers are particularly interested in DOD S&T program funding since these funds support the development of new technologies and the underlying science. Some in the defense community see ensuring adequate support for S&T activities as imperative to maintaining U.S. military superiority into the future. The knowledge generated at this stage of development may also contribute to advances in commercial technologies. The FY2020 request for Title IV S&T funding (base plus OCO) is $14.135 billion, $1.524 billion (9.7%) below the FY2019 enacted level. Within the S&T program, basic research (6.1) receives special attention, particularly by the nation's universities. DOD is not a large supporter of basic research when compared to NIH or NSF. However, over half of DOD's basic research budget is spent at universities. The Trump Administration is requesting $2.320 billion for DOD basic research for FY2020, $208.4 million (8.2%) below the FY2019 enacted level. DOD is a substantial source of federal funds for university R&D in certain fields, such as aerospace, aeronautical, and astronautical engineering (40%); electrical, electronic, and communications engineering (39%); mechanical engineering (28%); computer and information sciences (28%); and materials science (25%). The mission of the Department of Health and Human Services (HHS) is "to enhance and protect the health and well-being of all Americans ... by providing for effective health and human services and fostering advances in medicine, public health, and social services." This section focuses on HHS research and development funded through the National Institutes of Health, an HHS agency that accounts for nearly 97% of total HHS R&D funding. Other HHS agencies that provide funding for R&D include the Centers for Disease Control and Prevention (CDC), Centers for Medicare and Medicaid Services (CMS), Food and Drug Administration (FDA), Agency for Healthcare Research and Quality (AHRQ), Health Resources and Services Administration (HRSA), and Administration for Children and Families (ACF); additional R&D funding is attributed to departmental management. NIH is the primary agency of the federal government charged with performing and supporting biomedical and behavioral research. It also has major roles in training biomedical researchers and disseminating health information. The NIH mission is "to seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to enhance health, lengthen life, and reduce illness and disability." The agency consists of the NIH Office of the Director (OD) and 27 institutes and centers (ICs). The OD sets overall policy for NIH and coordinates the programs and activities of all NIH components, particularly in areas of research that involve multiple institutes. The ICs focus on particular diseases (e.g., National Cancer Institute), areas of human health and development (e.g., National Institute on Aging), or scientific research fields or support (e.g., National Center for Advancing Translational Sciences). Each IC plans and manages its own research programs in coordination with OD. As shown in Table 9 , separate appropriations are provided to 24 of the 27 ICs, as well as to OD, the Innovation Account (established by the 21 st Century Cures Act, P.L. 114-255), and an intramural Buildings and Facilities account. The other three centers, which perform centralized support services, are funded through the other ICs. NIH supports and conducts a wide range of basic and clinical research, research training, and health information dissemination across all fields of biomedical and behavioral sciences. According to NIH, about 10% of the NIH budget supports intramural research projects conducted by the nearly 6,000 NIH federal scientists, most of whom are located on the NIH campus in Bethesda, MD. More than 80% of NIH's budget goes to the extramural research community in the form of grants, contracts, and other awards. This funding supports research performed by more than 300,000 nonfederal scientists and technical personnel who work at more than 2,500 universities, hospitals, medical schools, and other research institutions. Funding for NIH comes primarily from the annual Labor, HHS, and Education (LHHS) appropriations act, with an additional amount for Superfund-related activities from the Interior/Environment appropriations act. Those two appropriations acts provide NIH's discretionary budget authority. In addition, NIH has received mandatory funding of $150 million annually provided in the Public Health Service Act (PHSA), Section 330B, for a special program on type 1 diabetes research. Some funding is also transferred to NIH pursuant to the "PHS Evaluation Tap" Transfer authority. The total funding available for NIH activities, taking account of add-ons and PHS tap transfers, is known as the NIH program level. President Trump's FY2020 budget request would provide NIH a total program level of $34.368 billion, a decrease of $4.941 billion (12.6%) compared with FY2019 enacted levels. The proposed FY2020 program level total would include $33.410 billion provided through LHHS appropriations (including the full amount authorized by the 21 st Century Cures Act); $741 million from the PHS evaluation transfer; $66.581 million provided through Interior/Environment appropriations for Superfund-related activities; and $150 million in proposed funding for the mandatory type 1 diabetes program. Under the FY2020 budget proposal, all existing ICs and budget activity lines, except for Buildings and Facilities, would receive a decrease compared to FY2019 enacted levels (see Table 9 ). The Buildings and Facilities appropriation of $200 million would not change from FY2019 to FY2020. Additionally, the FY2020 Budget Request proposes consolidating the Agency for Healthcare Research and Quality into NIH, forming a 28 th IC—the National Institute for Research on Safety and Quality (NIRSQ). The creation of a new NIH institute would require an amendment to PHSA Section 401(d), which specifies that "[i]n the National Institutes of Health, the number of national research institutes and national centers may not exceed a total of 27." Under the request, NISRQ would receive $256 million in funding for FY2020. The main funding mechanism NIH uses to support extramural research is research project grants (RPGs), which are competitive, peer-reviewed, and largely investigator-initiated. Historically, over 50% of the NIH budget is used to support RPGs, which include salaries for investigators and research staff. The FY2020 budget proposes to reduce the average cost of RPGs by capping the percentage of an investigator's salary that can be paid with grant funds to 90%. The FY2020 Trump budget proposal includes $150 million in mandatory funding for research on type 1 diabetes authorized under the PHS Act Section 330B within the budget of the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK). For this proposal, Congress and the President would need to enact legislation to extend the special diabetes program funding, because under current law, no new funding will be available for this program after September 30, 2019. Additionally, the FY2020 program level request includes $741 million in funding transferred to NIH by the PHS evaluation tap. Discretionary funding for certain programs at NIH and other HHS agencies that are authorized under the PHS Act can be subject to an assessment under Section 241 of the PHS Act (42 U.S.C. §238j). This provision authorizes the Secretary to use a portion of eligible appropriations to study the effectiveness of federal health programs and to identify improvements. Although the PHS Act limits the tap to no more than 1% of eligible appropriations, in recent years, annual LHHS appropriations acts have specified a higher amount (2.5% in FY2019) and have also typically directed specific amounts of funding from the tap for transfer to a number of HHS programs. The assessment has the effect of redistributing appropriated funds for specific purposes among PHS and other HHS agencies. NIH, with the largest budget among the PHS agencies, has historically been the largest "donor" of program evaluation funds; until recently, it had been a relatively minor recipient. Provisions in recent LHHS appropriations acts have directed specific tap transfers to NIH, making NIH a net recipient of tap funds. The FY2020 NIH budget request also includes $492 million made available through the 21 st Century Cures Act (see text box below; hereinafter referred to as "The Cures Act"). The Cures Act ( P.L. 114-255 ) specifies that $149 million is for the Precision Medicine Initiative, $140 million is for the BRAIN Initiative, $195 million is for cancer research, and $8 million is for research on regenerative medicine for FY2020. The President's FY2020 budget identifies several research priorities for NIH in the coming year. The overview below outlines some of these priority themes in the budget request. 1. Confronting the Opioids Crisis The request includes $1.3 billion designated for opioids and pain research across NIH, with $500 million of the total for the Helping to End Addiction Long-Term (HEAL) initiative. The HEAL Initiative, launched in April 2018, aims to accelerate the development of new medications and devices to treat opioid addiction. In addition, NIH plans to support research on neonatal abstinence syndrome, chronic pain, and other opioids-related issues. 2. Pediatric Research The FY2020 request proposes $50 million in designated funding for a pediatric cancer initiative. The initiative, designed to complement existing pediatric cancer research, would aggregate data on pediatric cancer cases and coordinate existing datasets to create a "comprehensive, shared resource to support research on childhood cancer in all its forms." The request also designates $15 million for the Institutional Development Award (IDeA) States Pediatric Clinical Trials Network to support pediatric clinical studies, such as on the "dosing, safety, and efficacy of drugs that are commonly prescribed to children." 3. Supporting the Next Generation of Researchers The request would provide $100 million in dedicated funding for the Next Generation Researchers Initiative, which aims to support new and early stage scientists in attaining their first NIH grants. Through the program, NIH ICs are to create funding pathways and other strategies targeted at new and early-stage scientists, and would be required to collect data and evaluate their outcomes. 4. Ending the HIV Epidemic As a part of a proposed HHS wide plan, "Ending the HIV Epidemic: A Plan for America," the FY2020 request designates $6 million in funding to Centers for AIDS Research to collect data and inform HHS on best practices for the initiative. The goal for the plan is to reduce new infections by 75% in the next 5 years, and by 90% in the next 10 years. 5. New Technologies and Biomedical Research NIH plans to continue to support biomedical innovations using new technologies, including for diagnosis, monitoring, and treatment. An example includes a smartphone-based system for people with diabetes to monitor blood glucose levels. NIH also aims to accelerate scientific discovery through new data science methods. In June 2018, NIH released a Strategic Plan for Data Science, with an agency-wide plan for increasing and improving its use of large biomedical datasets. In addition, NIH plans to convene a new working group on artificial intelligence, machine learning, and biomedical research. Along with the above priorities, the President's budget request identifies ongoing support related to precision medicine, universal flu vaccine, and NIH buildings and facilities. The Department of Energy (DOE) was established in 1977 by the Department of Energy Organization Act ( P.L. 95-91 ), which combined energy-related programs from a variety of agencies with defense-related nuclear programs that dated back to the Manhattan Project. Today, DOE conducts basic scientific research in fields ranging from nuclear physics to the biological and environmental sciences; basic and applied R&D relating to energy production and use; and R&D on nuclear weapons, nuclear nonproliferation, and defense nuclear reactors. The department has a system of 17 national laboratories around the country, mostly operated by contractors, that together account for about 40% of all DOE expenditures. The Administration's FY2020 budget request for DOE includes about $12.783 billion for R&D and related activities, including programs in three broad categories: science, national security, and energy. This request is 18.6% less than the enacted FY2019 amount of $15.712 billion. (See Table 10 for details.) The request for the DOE Office of Science is $5.546 billion, a decrease of 15.8% from the FY2019 appropriation of $6.585 billion. Funding would decrease for each of the office's six major research programs. In Basic Energy Sciences, almost half the proposed decrease would result from the approaching end of construction on the Linac Coherent Light Source II (no funding requested for FY2020, down from $129 million in FY2019). Funding for Biological and Environmental Research would decrease by $211 million (29.9%), with reductions concentrated in the Earth and Environmental Systems Sciences subprogram. In Advanced Scientific Computing Research, the Office of Science Exascale Computing Project would receive $189 million, down 18.9% from $233 million in FY2019. Funding for Fusion Energy Sciences would decrease by $161 million (28.6%), including a $25 million (18.9%) decrease in the U.S. contribution to construction of the International Thermonuclear Experimental Reactor (ITER), a fusion energy demonstration and research facility in France. The request for DOE national security R&D is $4.925 billion, an increase of 11.8% from $4.406 billion in FY2019. Funding for Weapons Activities RDT&E would increase 37.9%, including an increase of $123 million for Advanced Simulation and Computing and an increase of $95 million (190.3%) for Enhanced Capabilities for Subcritical Experiments. In Defense Nuclear Nonproliferation R&D, reactor conversion activities would transfer to a non-R&D account; excluding this accounting change, funding for the remaining program would increase by 3.8%. Funding for the Naval Reactors program would decrease by 7.8% overall, with increases for operations, infrastructure, and technology development offset by previously planned decreases in funding for construction and two major multiyear projects. The request for DOE energy R&D is $2.313 billion, a decrease of 51.0% from $4.721 billion in FY2019. Many of the proposed reductions in this category are similar to the Administration's FY2019 budget proposals. Funding for energy efficiency and renewable energy R&D would decrease by 66.3%, with reductions in all major research areas and a shift in emphasis toward early-stage R&D rather than later-stage development and deployment. Funding for fossil energy R&D would decrease by 24.1%, with reductions focused particularly on coal carbon capture and storage ($69 million, down from $199 million in FY2019) and natural gas technologies ($11 million, down from $51 million in FY2019). The request for fuel cycle R&D is $90 million (down from $264 million in FY2019), and nuclear energy would decrease by 37.9%, with no funding requested for the Integrated University Program ($5 million in FY2019) or the Supercritical Transformational Electric Power (STEP) R&D initiative ($5 million in FY2019). The Advanced Research Projects Agency-Energy (ARPA-E), which is intended to advance high-impact energy technologies that have too much technical and financial uncertainty to attract near-term private-sector investment, would be terminated. The National Aeronautics and Space Administration (NASA) was created in 1958 by the National Aeronautics and Space Act (P.L. 85-568) to conduct civilian space and aeronautics activities. NASA has research programs in planetary science, Earth science, heliophysics, astrophysics, and aeronautics, as well as development programs for future human spacecraft and for multipurpose space technology such as advanced propulsion systems. In addition, NASA operates the International Space Station (ISS) as a facility for R&D and other purposes. The Administration is requesting about $17.845 billion for NASA R&D in FY2020. This is 0.1% less than FY2019 funding of about $17.865 billion. For a breakdown of these amounts, see Table 11 . NASA R&D funding comes through five accounts: Science; Aeronautics; Space Technology (called Exploration Technology in the Administration's budget request); Exploration (Deep Space Exploration Systems in the request); and the ISS, Commercial Crew, and Commercial Low Earth Orbit (LEO) Development portions of Space Operations (called LEO and Spaceflight Operations in the request). The FY2020 request for Science is $6.304 billion, a decrease of 8.7% from FY2019. Within this total, funding for Earth Science would decrease by $151 million (7.8%); funding for Planetary Science would decrease by $136 million (4.9%); and funding for Astrophysics would decrease by $347 million (29.1%). The request for Earth Science includes no funding for the Pre-Aerosol, Clouds, and Ocean Ecosystem (PACE) mission or the Climate Absolute Radiance and Refractivity Observatory (CLARREO) Pathfinder mission. PACE and CLARREO Pathfinder were also proposed for termination in the FY2018 and FY2019 budgets but were funded by Congress. The request for Planetary Science includes $593 million for a mission to Jupiter's moon Europa, but in contrast to prior congressional direction, the mission would launch on a commercial rocket and would not include a lander. The Planetary Science request also includes $210 million for the Lunar Discovery and Exploration program, initiated in FY2019, to fund public-private partnerships for research using commercial lunar landers. The request for Astrophysics does not include funding for the Wide Field Infrared Space Telescope (WFIRST, $312 million in FY2019). The proposed increase of $48 million for the James Webb Space Telescope (JWST) would provide $155 million more for JWST in FY2020 than was projected in the FY2019 budget; this change reflects previously announced cost increases and schedule delays. The FY2020 request for Aeronautics is $667 million, a decrease of 8.0% from FY2019. The request includes $104 million for the Low Boom Flight Demonstrator program, intended to demonstrate quiet supersonic flight. The FY2020 request for Exploration Technology (currently Space Technology) is $1.014 billion, an increase of 9.4% from FY2019. The request proposes $119 million for a mostly new Lunar Surface Innovation Initiative. It proposes $45 million for a restructured In-Space Robotic Servicing program, down from $180 million for the RESTORE-L robotic servicing mission in FY2019. The FY2020 request for Deep Space Exploration Systems (currently Exploration) is $5.022 billion, a decrease of 0.6% from FY2019. This account funds development of the Orion Multipurpose Crew Vehicle and the Space Launch System (SLS) heavy-lift rocket, the capsule and launch vehicle mandated by the NASA Authorization Act of 2010 for future human exploration beyond Earth orbit. The first test flight of SLS carrying Orion but no crew (known as EM-1) is now expected no earlier than June 2020. The first flight of Orion and the SLS with a crew on board (known as EM-2) is expected by April 2023. Funding for Orion, the SLS, and related ground systems (collectively known as Exploration Systems Development) would decrease by $651 million (15.9%). The account also funds Exploration R&D, which would increase by $622 million (64.9%). The request for Exploration R&D includes $821 million for a platform in lunar orbit (known as the Gateway) to serve as a test bed for deep space human exploration capabilities. In the LEO and Spaceflight Operations account (currently Space Operations), the request for Commercial Crew is $102 million, a decrease of 41.1% from FY2019; the request for the ISS is $1.458 billion; and the request for Commercial LEO Development, a new program in FY2019, is $150 million (an increase of 275.0%). The reduction in Commercial Crew funding reflects the expected transition of commercial crew activities from development to operations: the first post-certification crewed flight to the ISS is planned for late FY2019. The Commercial LEO Development program is intended to stimulate a commercial space economy in low Earth orbit, including the commercial provision of NASA's requirements for research and technology demonstration after the proposed end of direct ISS funding in 2025. The National Science Foundation supports basic research and education in the nonmedical sciences and engineering. Congress established the foundation as an independent federal agency in 1950 and directed it to "promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes." The NSF is a primary source of federal support for U.S. university research, especially in mathematics and computer science. It is also responsible for significant shares of the federal science, technology, engineering, and mathematics (STEM) education program portfolio and federal STEM student aid and support. NSF has six appropriations accounts: Research and Related Activities (RRA, the main research account), Education and Human Resources (EHR, the main education account), Major Research Equipment and Facilities Construction (MREFC), Agency Operations and Award Management (AOAM), the National Science Board (NSB), and the Office of Inspector General (OIG). Appropriations are generally provided at the account level, while program-specific direction may be included in appropriations acts, or accompanying conference reports or explanatory statements. Because final FY2019 funding was not available at the time the FY2020 budget request was prepared, requested R&D funding is compared to the FY2018 actual funding. FY2019 funding levels, enacted February 15, 2019, are included for reference. These amounts are available only at the account level; FY2019 R&D breakouts and subaccount funding amounts are not yet available for comparison. Funding for R&D is included in the RRA, EHR, and MREFC accounts. (The RRA and EHR accounts also include non-R&D funding.) Together, these three accounts comprise 95% of the total requested funding for NSF. Actual R&D obligations for each account are known after NSF allocates funding appropriations to specific activities and reports those figures. The budget request specifies R&D funding for the conduct of research, including basic and applied research, and for physical assets, including R&D facilities and major equipment. Funding amounts for FY2018 actual and FY2020 requested levels are reported by account, including amounts for R&D conduct and physical assets where applicable, in Table 12 . Overall . The Administration is requesting $7.07 billion for the NSF in FY2020, $1.01 billion (12.5%) less than the FY2019 enacted amount, and $752 million (9.6%) less than the FY2018 actual amount. The request would decrease budget authority in three accounts relative to the FY2018 enacted level: RRA by $717.4 million (11.2%), EHR by $80.4 million (8.9%), and NSB by $200,000 (4.7%). The request would increase budget authority for the MREFC account by $36.9 million (19.8%) and provide slight increases to the AOAM (2.6%, $8.4 million) and OIG (1.7%, $260,000) accounts. Overall, NSF estimates that, under the FY2020 request, agency-wide funding rates (i.e., the percentage of submitted proposals that are successfully awarded funding) would decrease slightly from 24% to 23%, with 1,317 fewer new competitive awards, compared to FY2018. As a proportion of NSF's total funding, R&D activities account for approximately 81%. For FY2020, $5.72 billion is requested for R&D activities, a 10% decrease from FY2018 actual funding for R&D of $6.36 billion. The total request includes $5.22 billion (91%) for the conduct of R&D, and $506 million (9%) for R&D facilities and major equipment. Of funding requested for the conduct of R&D, 87% is requested for basic research, and 13% for applied research. Overall funding for R&D facilities and major equipment supports not only the construction and acquisition phases, funded through MREFC ($223 million requested), but also the planning, design, and postconstruction operations and maintenance, funded through RRA ($282 million requested). Research . The Administration seeks $5.66 billion for RRA in FY2020, an $857 million (13.1%) decrease compared to the FY2019 enacted funding, and a $717 million (11.2%) decrease compared to FY2018 actual funding. Compared to the FY2018 actual levels, the FY2020 request includes decreases for 8 of the 10 RRA subaccounts. The largest percentage decrease would go to the Office of Polar Programs (19.6%, $98.3 million decrease). The largest percentage increase would go to the U.S. Arctic Research Commission account (6.3%, $90,000 increase). The FY2020 request also includes $151 million for the RRA Established Program to Stimulate Competitive Research (EPSCoR) program, a $19.4 million (11.3%) decrease compared to FY2018 actual funding. Within the RRA account, the FY2020 request includes $5.08 billion for R&D, a decrease of $634 million (11.1%) compared to the FY2018 actual amount. Of this amount, the majority ($4.80 billion, 94%) is requested for the conduct of research, including $4.38 billion for basic research and $417 million for applied research. Education . The FY2020 request for the EHR account is $86.5 million (9.5%) less than the FY2019 enacted amount and $80.4 million (8.9%) less than the FY2018 actual level. By program division, the Division of Human Resource Development would receive an increase of $15.6 million (9.6%) over the FY2018 actual level. The divisions of research on learning in formal and informal settings, graduate education, and undergraduate education would receive decreases of 20.4% ($182 million requested), 5.5% ($244 million requested), and 13.8% ($219 million requested), respectively. EHR programs of particular interest to congressional policymakers include the Graduate Research Fellowship Program (GRFP) and National Research Traineeship (NRT) programs. The FY2020 request for GRFP is $257 million, a reduction of $27.9 million (9.8%) from the FY2018 actual level. The FY2020 request for NRT is $49.5 million, a $4.3 million (8.0%) decrease from FY2018. Within EHR, requested funding for R&D is $420 million, which is $37.7 million (8.2%) less than the FY2018 actual funding amount and accounts for approximately 7.3% of the agency's total R&D request. All of the requested funding would support the conduct of R&D, including $150 million for basic research and $270 million for applied research. Construction . The MREFC account supports large construction projects and scientific instruments, with all of the funding supporting R&D facilities. The Administration is seeking $223 million for MREFC in FY2020, $36.9 million (19.8%) more than the FY2018 enacted amount, and $72.5 million (24.5%) less than the FY2018 actual amount. Requested MREFC funding would support continued construction of the Large Synoptic Survey Telescope (LSST, $46.3 million requested, 5.1% decrease from FY2019 enacted) and Antarctic Infrastructure Modernization for Science (AIMS, $97.9 million requested, 5.6% decrease from FY2019 enacted). The request includes $33.0 million for upgrades to the Large Hadron Collider in Switzerland, which would represent the first year of a five-year project. Additionally, $45.0 million is requested for Mid-scale Research Infrastructure projects in the $20 million to $70 million range; this is a new funding line-item in the MREFC account meant to manage support for upgrades to major facilities and stand-alone projects in this range as a portfolio. Other initiatives . The FY2019 NSF budget request includes funding for three multiagency initiatives. This funding is included in multiple NSF appropriations accounts, and R&D amounts are not separately provided. The National Nanotechnology Initiative would receive $389 million, $179 million (31.4%) less than in FY2018. The Networking and Information Technology Research and Development program would receive $1.20 billion, a decrease of $98.2 million (7.6%). The U.S. Global Change Research Program would receive $224 million, $30.0 million (11.8%) less than in FY2018. The U.S. Department of Agriculture (USDA) was created in 1862, in part to support agricultural research in an expanding, agriculturally dependent country. Today, USDA conducts intramural research at federal facilities with federally employed scientists and supports external research at universities and other facilities through competitive grants and formula-based funding. The breadth of contemporary USDA research spans traditional agricultural production techniques, organic and sustainable agriculture, bioenergy, nutrition needs and food composition, food safety, animal and plant health, pest and disease management, economic decisionmaking, and other social sciences affecting consumers, farmers, and rural communities. Four agencies carry out USDA's intramural research and education activities, grouped together into the Research, Education, and Economics (REE) mission area. The agencies involved are the Agricultural Research Service (ARS), National Institute of Food and Agriculture (NIFA), National Agricultural Statistics Service (NASS), and Economic Research Service (ERS). The FY2019 enacted appropriation ( P.L. 116-6 ) provides a total of $3,424.1 million in discretionary spending for the four agencies. The Administration is requesting a total of $2,868.7 million for the four agencies in FY2020, a 16.2% reduction ($555.4 million). Most of that year-over-year reduction (78%) is attributable to the reduced request for ARS salaries and expenses and the ARS buildings and facilities account (see Table 13 ). The remainder of the year-over-year reduction comes from decreases in certain research and education, extension, and integrated activities in NIFA, as well as in NASS and ERS. In addition to discretionary appropriations, agricultural research is funded by state matching contributions and private donations or grants, as well as certain mandatory funding authorized by the farm bill. USDA's FY2019 enacted discretionary appropriations and the Administration's FY2020 request for the four research agencies are discussed below. The Agricultural Research Service is USDA's in-house basic and applied research agency. It operates approximately 90 laboratories nationwide with about 6,600 employees. ARS laboratories focus on efficient food and fiber production, development of new products and uses for agricultural commodities, development of effective controls for pest management, and support of USDA regulatory and technical assistance programs. ARS also operates the National Agricultural Library, one of the department's primary information repositories for food, agriculture, and natural resource sciences. For FY2019, P.L. 116-6 provides $1,303.3 billion for ARS salaries and expenses and $381.2 million for buildings and facilities. The Administration is requesting $1,203.5 billion for ARS salaries and expenses for FY2020, a decrease of $99.8 million (7.6%) from the FY2019 appropriation. For FY2020, the request for the buildings and facilities account is $50.0 million ( Table 13 ). ARS will assume ownership of the National Bio and Agro-Defense Facility (NBAF) in FY2019 from the Department of Homeland Security (DHS). The FY2019 enacted bill provides $10.6 million to address one-time costs associated with the transfer of the science program from the Plum Island Animal Disease Center to NBAF, and $42.0 million to address stand-up activities and other initial costs to operate and maintain the new facility. NBAF is expected to be fully operational by December 31, 2022. From the total salaries and expenses appropriation for FY2020, the Administration is requesting $13.1 million for NBAF. The FY2019 enacted bill provides an additional $5.0 million for ARS to increase research efforts on foreign animal diseases, and an additional $2.0 million to expand research on resilient dryland farming. FY2019 conference report language ( H.Rept. 116-9 ) criticized ARS for not reporting a single specific negative finding by Animal and Plant Health Inspection Service (APHIS) inspections of ARS research facilities that use animals as research subjects. The report noted that numerous violations had been found involving death and serious health issues of animal subjects, and directed ARS to submit a report within 60 days of enactment covering all violations found by APHIS and the actions taken to prevent them from recurring. P.L. 116-9 does not support the Administration's request to terminate or redirect various ARS research programs, or the closure of ARS research locations. The National Institute of Food and Agriculture (NIFA) provides federal funding for research, education, and extension projects conducted in partnership with State Agricultural Experiment Stations, the State Cooperative Extension System, land grant universities, colleges, and other research and education institutions, as well as individual researchers. These partnerships include the 1862 land-grant institutions, 1890 historically black colleges and universities (HBCUs) established by the Morrill Acts, the 1994 tribal land-grant colleges, and Hispanic-serving institutions. Federal funds enhance research capacity at universities and institutions through statutory formula funding, competitive awards, and grants. For FY2019, P.L. 116-6 provides $1,471.3 billion in discretionary spending for NIFA activities. The Administration's FY2020 request for NIFA is $1,391.7 billion, a reduction of $79.6 million (5.4%) from FY2019 ( Table 13 ). The enacted bill provides $259.0 million to support Hatch Act formula funding for 1862 land grant university research and education activities. For FY2020, the Administration is requesting $243.2 million for Hatch Act funding, a 6.1% reduction. For Evans-Allen formula funding to the 19 HBCUs, the FY2019 bill provides $58.0 million for research and $19.3 million for education grants. The Administration requests $53.8 million in Evans-Allen funding for FY2020 (7.2% reduction from FY2019), and $18.7 million for education grants. For research grants to the 1994 Tribal institutions, and for education grants to Alaska Native and Native Hawaiian-Serving institutions, the FY2019 appropriation provides $3.8 and $3.2 million, respectively. For FY2020, the Administration requests $3.4 million for the 1994 Tribal institutions, and $0 for education grants to the Alaska Native and Native Hawaiian-Serving institutions. For McIntire-Stennis cooperative forestry research support, P.L. 116-6 provides $36.0 million for FY2019. The Administration is requesting $28.9 million for FY2020, approximately 20% less than FY2019. The FY2019 appropriation also provides $37.0 million for the Sustainable Agriculture Research and Education program. The Administration requests a reduction of $18.0 million (48.6%) for the program in FY2020. The FY2019 enacted bill provides $415.0 million for the Agriculture and Food Research Initiative (AFRI)—USDA's flagship competitive research grants program. The Administration is requesting $500.0 million for the program in FY2020, a 20.5% increase over FY2019. This budget item currently represents about 30% of the total NIFA discretionary budget. For Cooperative Extension support at 1862 land grant universities under the Smith-Lever Act, Sections (b) and (c) formula funding for FY2019, the enacted appropriation provides a total of $315.0 million for these extension activities. The Administration requests $299.4 million for these programs in FY2020. The Smith-Lever Sections (b) and (c) programs include extension services at the HBCUs and the 1994 Tribal colleges, faculty improvement grants to HBCUs, and women and minorities in STEM fields, among other programs. P.L. 116-6 provides $86.6 million for Smith-Lever 3(d) activities, including food and nutrition education, new technologies for agricultural extension, and children, youth, and families at risk. For FY2020, the Administration is requesting $58.1 million for Smith-Lever Section 3(d) funding, $55.1 million of which would support the Expanded Food and Nutrition Education Program, and $3.0 million would support Federally-Recognized Tribes Extension Program for programs on American Indian Reservations and Tribal jurisdictions. The Administration is requesting $0 funding in FY2020 for other Smith-Lever Section 3(d) programs. The National Agricultural Statistics Service conducts the quinquennial Census of Agriculture and provides official statistics on agricultural production and indicators of the economic and environmental status of the farm sector. For FY2019, P.L. 116-6 provides $174.5 million to NASS, of which up to $45.3 million is reserved to support the 2017 Census of Agriculture. The enacted bill also provides $600,000 for the Geospatial Improvement Initiative and an increase of $500,000 for the Floriculture Crops Report. The Administration is requesting $163.0 million for NASS in FY2020, and up to $45.3 million to support the 2017 Census. Results of the 2017 Census of Agriculture were released on April 11, 2019. The Economic Research Service supports economic and social science analysis about agriculture, rural development, food, commodity markets, and the environment. It also collects and disseminates data concerning USDA programs and policies. ERS is one of 13 "principal statistical agencies" of the Federal Statistical System of the United States. For FY2019, P.L. 116-6 provides $86.8 million for ERS activities. The Administration has requested $60.5 million for ERS in FY2020, a 30.3% decrease. Two agencies of the Department of Commerce have major R&D programs: the National Institute of Standards and Technology (NIST) and the National Oceanic and Atmospheric Administration (NOAA). The mission of the National Institute of Standards and Technology is "to promote U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life." NIST research provides measurement, calibration, and quality assurance methods and techniques that support U.S. commerce, technological progress, product reliability, manufacturing processes, and public safety. NIST's responsibilities include the development, maintenance, and custodial retention of the national standards of measurement; providing the means and methods for making measurements consistent with those standards; and ensuring the compatibility of U.S. national measurement standards with those of other nations. The President is requesting $686.8 million for NIST in FY2020, a decrease of $298.7 million (30.3%) from the FY2019 enacted appropriation of $985.5 million. (See Table 14 .) NIST discretionary funding is provided through three accounts: Scientific and Technical Research and Services (STRS), Industrial Technology Services (ITS), and Construction of Research Facilities (CRF). The President's FY2020 request includes $611.7 million for R&D, standards coordination, and related services in the STRS account, a decrease of $112.8 million (15.6%) from the FY2019 level. The FY2020 request would provide $15.2 million for the ITS account, down $139.8 million (90.2%) from FY2019. Within the ITS account, the request would provide no funding for the Manufacturing Extension Partnership (MEP) program, a reduction of $140.0 million from FY2019; MEP centers in each state would be required to become entirely self-supporting. In his FY2019 request, President Trump proposed ending federal funding for MEP; in his FY2018 request, the President sought $6.0 million "for an orderly shutdown of the program." The request provides $15.2 million provided for Manufacturing USA (also referred to as the National Network for Manufacturing Innovation or NNMI), slightly higher than the FY2019 level of $15.0 million. Of these funds, approximately $10 million would be for continued support of the NIST-sponsored National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL), with the balance (approximately $5 million) to be used for coordination of the Manufacturing USA network. The President is requesting $59.9 million for the NIST CRF account for FY2020, down $46.1 million (43.5%) from the FY2019 enacted level. The National Oceanic and Atmospheric Administration (NOAA) conducts scientific research in areas such as ecosystems, climate, global climate change, weather, and oceans; collects and provides data on the oceans and atmosphere; and manages coastal and marine organisms and environments. NOAA was created in 1970 by Reorganization Plan No. 4. The reorganization was intended to unify elements of the nation's environmental programs and to provide a systematic approach for monitoring, analyzing, and protecting the environment. NOAA's administrative structure is organized by six line offices that reflect its diverse mission: the National Ocean Service (NOS); National Marine Fisheries Service (NMFS); National Environmental Satellite, Data, and Information Service (NESDIS); National Weather Service (NWS); Office of Oceanic and Atmospheric Research (OAR); and the Office of Marine and Aviation Operations (OMAO). The line offices are supported by an additional office, Mission Support, which provides cross-cutting administrative functions related to planning, information technology, human resources, and infrastructure. Congress provides most of the discretionary funding for the line offices and Mission Support through two accounts: (1) Operations, Research, and Facilities, and (2) Procurement, Acquisition, and Construction. In 2010, NOAA published its Next Generation Strategic Plan . The strategic plan is organized into four categories of long-term goals including (1) climate adaptation and mitigation, (2) a weather-ready nation, (3) healthy oceans, and (4) resilient coastal communities and economies. The strategic plan also lists three groups of enterprise objectives related to (1) stakeholder engagement, (2) data and observations, and (3) integrated environmental modeling. The strategic plan serves as a guide for NOAA's five-year R&D plan. The most recent five-year R&D plan was published in 2013, and includes R&D objectives to reach strategic plan goals and objectives and targets to track progress toward R&D objectives over time. One of the main challenges identified in the NOAA R&D plan is the need to integrate the diverse perspectives and professional expertise required by the agency's mission. The plan states that "holistically understanding the earth system is not only understanding its individual components, but understanding and interpreting the way each of the components interact and behave as an integrated composite that is more than the sum of its parts." For FY2020, President Trump requested $651.1 million in R&D funding for NOAA, a decrease of $286.9 million (30.6%) below the FY2019 enacted level of $938.0 million. For FY2019, Congress enacted $540.3 million for research (57.6% of total R&D funding), $162.5 million for development (17.3%), and $235.2 million for R&D equipment (25.1%). The enacted FY2019 total R&D amount was 17.0% of NOAA's total discretionary budget authority of $5.509 billion. In FY2020, the President is requesting $352.3 million for research (54.1% of total R&D funding), $106.3 million for development (16.3%), and $192.6 million for R&D equipment (29.6%). The President's request for total R&D is 14.1% of NOAA's total discretionary budget authority request of $4.622 billion. Table 15 provides R&D funding levels for FY2019 enacted and the Administration's FY2020 request for each NOAA office. OAR accounts for the majority of R&D in most years. The President is requesting $335.1 million for OAR R&D in FY2020, a decrease of $196.2 million (36.9%) below the FY2019 enacted funding level of $531.4 million. OAR conducts research in three major areas: (1) weather and air chemistry; (2) climate; and (3) oceans, coasts, and the Great Lakes. A significant portion of these efforts is implemented through NOAA laboratories and cooperative research institutes. NOAA supports 16 cooperative research institutes and 10 NOAA laboratories in OAR's three research areas. The President's FY2020 request would fund the cooperative institutes and laboratories at $169.6 million, $13.1 million (7.2%) less than the FY2019 enacted funding level of $182.8 million. Among other R&D activities, the President's FY2019 request would also reduce funding to the National Sea Grant College Program. The National Sea Grant College Program is composed of 33 university-based state programs and supports scientific research and stakeholder engagement to identify and solve problems faced by coastal communities. The President's FY2020 request would terminate federal support of the National Sea Grant College Program and its related Marine Aquaculture Research program. In FY2019, Congress appropriated $68.0 million to the National Sea Grant College Program and $12.0 million to the Marine Aquaculture Research program. The Department of the Interior (DOI) was created to conserve and manage the nation's natural resources and cultural heritage, to provide scientific and other information about those resources, and to uphold "the nation's trust responsibilities or special commitments to American Indians, Alaska Natives, and affiliated island communities to help them prosper." DOI has a wide range of responsibilities including, among other things, mapping, geological, hydrological, and biological science; migratory bird, wildlife, and endangered species conservation; surface-mined lands protection and restoration; and historic preservation. Because final FY2019 funding was not available at the time the FY2020 budget was prepared, requested R&D funding is compared to the FY2018 actual funding. The Administration is requesting $12.6 billion in net discretionary funding for DOI in FY2020. Of that amount, $757 million is requested for R&D funding, $148 million (16.3%) below the FY2018 actual level of $905 million. Of the President's FY2020 DOI R&D funding request, 8.9% is for basic research, 73.3% is for applied research, and 17.8% is for development. The U.S. Geological Survey (USGS) is the only DOI component that conducts basic research. Funding for DOI R&D is generally included in appropriations line items that also include non-R&D activities. How much of the funding provided in appropriations legislation is allocated to R&D specifically is unclear unless funding is provided at the precise level of the request. In general, R&D funding levels are known only after DOI components allocate their appropriations to specific activities and report those figures. The USGS accounts for approximately two-thirds of all DOI R&D funding. A single appropriations account, Surveys, Investigations, and Research (SIR), provides all USGS funding. USGS R&D is conducted under seven SIR activity/program areas: Ecosystems; Land Resources; Energy, Minerals, and Environmental Health; Natural Hazards; Water Resources; Core Science Systems; and Science Support. The President's total FY2020 budget request for USGS is $984 million. Of this amount, $481 million would be for R&D, a decrease of $119 million (19.8%) from the FY2018 enacted level of $600 million. The President's FY2020 request also includes R&D funding for the following DOI components: Bureau of Reclamation (BOR): $84.0 million in applied research and development funding for FY2020, down $26.4 million (23.9%) from FY2018. Bureau of Ocean Energy Management (BOEM): $100.4 million in applied research and development funding for FY2020, up $22.1 million (28.2%) from FY2018—the only component that would receive an increase in R&D funding. Fish and Wildlife Service (FWS): $15.5 million in applied research for FY2020, down $17.2 million (52.5%) from FY2018. National Park Service (NPS): $25.9 million in applied research and development for FY2020, down $1.1 million (4.2%) from FY2018. Bureau of Safety and Environmental Enforcement (BSEE): $24.5 million in applied research for FY2020, down $2.2 million (8.2%) from FY2018. Bureau of Land Management (BLM): $19.0 million in applied research and development for FY2020, down $1.9 million (9.0%) from FY2018. Bureau of Indian Affairs (BIA): $5.0 million in applied research for FY2020, equal to the actual amount from FY2018. Wildland Fire Management (WFM): No funding requested for R&D for FY2020, down $3.0 million (100.0%) from FY2018. Office of Surface Mining Reclamation and Enforcement (OSMRE): $1.5 million in applied research for FY2020, up $970,000 (190%) from FY2018. Table 16 summarizes FY2018 actual R&D funding and the President's FY2020 R&D funding request for DOI components. The Department of Veterans Affairs (VA) operates and maintains a national health care delivery system to provide eligible veterans with medical care, benefits, and social support. As part of the agency's mission, it seeks to advance medical R&D in areas most relevant to the diseases and conditions that affect the health care needs of veterans. The President is proposing $1.4 billion for VA R&D in FY2020, an increase of $12 million (1%) from FY2019. (See Table 17 .) VA R&D is funded through two accounts—the Medical and Prosthetic Research account and the Medical Care Support account. The Medical Care Support account also includes non-R&D funding, and the amount of funding that will be allocated to support R&D through appropriations legislation is unclear unless funding is provided at the precise level of the request. In general, R&D funding levels from the Medical Care Support account are only known after the VA allocates its appropriations to specific activities and reports those figures. The Medical Care Support account provides administrative and other support for VA researchers and R&D projects, including infrastructure maintenance. The FY2020 request includes $762 million for VA's Medical and Prosthetic Research account, a decrease of $17 million (2%), and $648 million in funding for research supported by the agency's Medical Care Support account, an increase of $29 million (5%). According to the President's request, FY2020 strategic priorities for VA R&D include increasing the access of veterans to clinical trials; increasing the transfer and translation of VA R&D; and "transforming VA data into a national resource" by reducing the time and effort needed to appropriately access, properly understand, and effectively use VA data for research. Clinical priorities for VA R&D in FY2020 include efforts to treat veterans at risk of suicide and research to address chronic pain and opioid addiction, posttraumatic stress disorder, traumatic brain injury, and Gulf War illness. The Medical and Prosthetics R&D program is an intramural program managed by the Veteran Health Administration's Office of Research and Development (ORD) and conducted at VA Medical Centers and VA-approved sites nationwide. According to ORD, the mission of VA R&D is "to improve Veterans' health and well-being via basic, translational, clinical, health services, and rehabilitative research and to apply scientific knowledge to develop effective individualized care solutions for Veterans." ORD consists of four main research services each headed by a director: Biomedical Laboratory R&D conducts preclinical research to understand life processes at the molecular, genomic, and physiological levels. Clinical Science R&D supports clinical trials and other human subjects research to determine the feasibility and effectiveness of new treatments such as drugs, therapies, or devices, compare existing therapies, and improve clinical care and practice. Health Services R&D conducts studies to identify and promote effective and efficient strategies to improve the quality and accessibility of the VA health system and patient outcomes, and to minimize health care costs. Rehabilitation R&D conducts research and develops novel approaches to improving the quality of life of impaired and disabled veterans. In addition to intramural support, VA researchers are eligible to obtain funding for their research from extramural sources, including other federal agencies, private foundations and health organizations, and commercial entities. According to the President's FY2020 budget request, these additional R&D resources are estimated at $570 million in FY2020. However, unlike other federal agencies, such as the National Institutes of Health and the Department of Defense, VA does not have the authority to support extramural R&D by providing research grants to colleges, universities, or other non-VA entities. Table 17 summarizes R&D program funding for VA in the Medical and Prosthetic Research and the Medical Care Support accounts. Table 18 details amounts to be spent in Designated Research Areas (DRAs), which VA describes as "areas of importance to our veteran patient population." Funding for research projects that span multiple areas may be included in several DRAs; thus, the amounts in Table 18 total to more than the appropriation or request for VA R&D. The Department of Transportation (DOT) was established by the Department of Transportation Act (P.L. 89-670) on October 15, 1966. The primary purposes of DOT research and development activities as defined by Section 6019 of the Fixing America's Surface Transportation Act ( P.L. 114-94 ) are improving mobility of people and goods; reducing congestion; promoting safety; improving the durability and extending the life of transportation infrastructure; preserving the environment; and preserving the existing transportation system. Funding for DOT R&D is generally included in appropriations line items that also include non-R&D activities. The amount of the funding provided by appropriations legislation that is allocated to R&D is unclear unless funding is provided at the precise level of the request. In general, R&D funding levels are known only after DOT agencies allocate their final appropriations to specific activities and report those figures. The Administration is requesting $1.089 billion for DOT R&D activities and facilities in FY2020, a decrease of $5.8 million (0.5%) from FY2019. (See Table 19 .) Three DOT agencies—the Federal Aviation Administration (FAA), the Federal Highway Administration (FHWA), and the National Highway Traffic Safety Administration (NHTSA)—would account for over 90% of DOT R&D under the FY2020 request. The President's FY2020 request of $512.3 million for R&D activities and facilities at FAA would be an increase of $10.4 million (2.1%) from FY2019. The request includes $120 million for the agency's Research, Engineering, and Development (RE&D) account, a reduction of $71.1 million (37.2%) from FY2019. Funding within the RE&D account seeks to improve aircraft safety through research in fields such as fire safety, advanced materials, propulsion systems, aircraft icing, and continued airworthiness, in addition to safety research related to unmanned aircraft systems and the integration of commercial space operations into the national airspace. According to the President's budget request FHWA's contributions to researching and implementing transformative innovations and technologies are changing the way roads, bridges, and other facilities are planned, designed, built, managed, and maintained across the country to be more responsive to current and future needs. The President's request of $420 million for R&D activities and facilities at FHWA would be an increase of $39 million (10.2%) from FY2019. The request includes $125 million for FHWA's Highway Research and Development program, which seeks to improve safety, enhance the design and construction of transportation infrastructure, provide data and analysis for decision-making, and reduce congestion. The program supports highway research in such areas as the impact of automated driving systems, infrastructure durability, resilience, and environmental sustainability, and the factors that contribute to death and injury related to roadway design, construction, and maintenance. The request also includes $100 million for research to facilitate the development of a connected, integrated, and automated transportation system under the agency's Intelligent Transportation Systems program. The President is requesting $62.1 million in R&D and R&D facilities funding in FY2020 for NHTSA, $13.8 million (18.2%) below FY2019. NHTSA R&D focuses on automation and the study of human machine interfaces, advanced vehicle safety technology, ways of improving vehicle crashworthiness and crash avoidance, reducing unsafe driving behaviors, and alternative fuels vehicle safety. R&D activities are also supported by several other DOT components or agencies (see Table 19 ). The President's FY2020 request includes DOT R&D and R&D facilities funding for the Federal Railroad Administration (FRA), totaling $23.1 million, $21.6 million (48.3%) below the FY2019 level of $44.6 million; the Federal Transit Administration (FTA), totaling $28 million, $2 million (6.7%) below the FY2019 level of $30 million; the Pipeline and Hazardous Materials Safety Administration (PHMSA), totaling $21.5 million, $3 million (12.1%) below the FY2019 level of $24.5 million; the Office of the Secretary (OST), totaling $13.1 million, $14.8 million (53.2%) below the FY2019 level of $27.9 million; and the Federal Motor Carrier Safety Administration (FMCSA), totaling $9.1 million, the same amount as FY2019. The Department of Homeland Security (DHS) has identified five core missions: to prevent terrorism and enhance security, to secure and manage the borders, to enforce and administer immigration laws, to safeguard and secure cyberspace, and to ensure resilience to disasters. New technology resulting from research and development can contribute to achieving all these goals. The Directorate of Science and Technology (S&T) has primary responsibility for establishing, administering, and coordinating DHS R&D activities. Other components, such as the Countering Weapons of Mass Destruction Office, the U.S. Coast Guard, and the Transportation Security Administration, conduct R&D relating to their specific missions. The President's FY2020 budget request for DHS includes $438 million for activities identified as R&D. This would be a reduction of 31.6% from $640 million in FY2019. The total includes $303 million for the S&T Directorate and smaller amounts for six other DHS components. See Table 20 . The S&T Directorate performs R&D in several laboratories of its own and funds R&D performed by the DOE national laboratories, industry, universities, and others. It also conducts testing and other technology-related activities in support of acquisitions by other DHS components. The Administration's FY2020 request of $303 million for the S&T Directorate R&D account is a decrease of 40.7% from $511 million in FY2019. The request includes no funding for cybersecurity R&D ($89.1 million in FY2019), which would instead be conducted in the Cybersecurity Infrastructure Security Agency ($31 million for R&D in the FY2020 request, up from $13 million in FY2019). The remaining thrust areas in the S&T Directorate's Research, Development, and Innovation budget line would all decrease, by amounts ranging from 12.1% (Counter Terrorist) to 40.4% (Border Security). Funding for University Centers of Excellence would decrease from $37 million in FY2019 to $18 million in FY2020. In addition to its R&D account, the S&T Directorate receives funding for laboratory facilities and other R&D-related expenses through its Operations and Support account (not shown in the table). In this account, the FY2020 request for Laboratory Facilities is $116 million, down 4.9% from $122 million in FY2019. The Laboratory Facilities request includes no funding for the National Urban Security Technology Laboratory, which the Administration proposes to close, or for the National Bio and Agro-Defense Facility (NBAF), which the S&T Directorate is building using previously appropriated funds but will transfer to the USDA once it becomes operational. Requested funding in Laboratory Facilities for the National Biodefense Analysis and Countermeasures Center (NBACC) is $29 million, the same as in FY2019. The request for R&D in the Countering Weapons of Mass Destruction Office is $68 million, down from $83 million in FY2019. The U.S. Environmental Protection Agency (EPA), the federal regulatory agency responsible for administering a number of environmental pollution control laws, funds a broad range of R&D activities to provide scientific tools and knowledge that support decisions relating to preventing, regulating, and abating environmental pollution. Since FY2006, Congress has funded EPA through the Interior, Environment, and Related Agencies appropriations acts. Appropriations for EPA R&D are generally included in line-items that also include non-R&D activities. Annual appropriations bills and the accompanying committee reports do not identify precisely how much funding provided in appropriations bills is allocated to EPA R&D alone. EPA determines its R&D funding levels in operation through allocating its appropriations to specific activities and reporting those amounts. The agency's Science and Technology (S&T) appropriations account funds much of EPA's scientific research activities, which include R&D conducted by the agency at its own laboratories and facilities, and R&D and related scientific research conducted by universities, foundations, and other nonfederal entities that receive EPA grants. The S&T account receives a base appropriation and a transfer from the Hazardous Substance Superfund (Superfund) account for research on more effective methods remediating contaminated sites. EPA's Office of Research and Development (ORD) is the primary manager of R&D at EPA headquarters and laboratories around the country, as well as external R&D. A large portion of the S&T account funds EPA R&D activities managed by ORD, including research grants. Programs implemented by other offices within EPA also may have a research component, but the research component is not necessarily the primary focus of the program. As with the President's FY2019 budget request, the FY2020 request proposes reductions and eliminations of funding for FY2020 across a number of EPA programs and activities. The President's FY2020 request includes a total of $6.07 billion for EPA, $2.78 billion (31%) less than the total $8.85 billion FY2019 enacted appropriations for EPA (after rescissions) provided in Titles II and IV of Division E of the Consolidated Appropriations Act, FY2019 ( P.L. 116-6 ), and $123.4 million (2%) less than the FY2019 request of $6.19 billion for EPA. The reductions proposed in the FY2020 request are distributed across EPA operational functions and activities as well as grants for states, tribes, and local governments. With the exception of the Building and Facilities account, the President's FY2020 request proposes funding reductions below FY2019 enacted levels for the nine other EPA appropriations accounts, although funding for some program areas within the accounts would remain constant or increase. Some Members of Congress expressed concerns regarding proposed reductions of funding for EPA scientific research programs during hearings on the President's FY2020 budget request. Including a $17.8 million transfer from the Superfund account, the President's FY2020 budget request proposes $480.8 million for EPA's S&T account, $241.1 million (33.4%) less than the FY2019 enacted $722.0 million which includes a $15.5 million transfer and $11.3 million account specific rescissions. The FY2020 request would provide an increase (3.1%) compared to the FY2019 request of $466.4 million, which includes a $17.4 million transfer. The President's FY2020 request proposes a rescission for EPA but does not specify a rescission within the S&T or other appropriations accounts. This accounting difference does not allow for direct comparisons of funding within EPA's S&T account including specific rescissions. Table 21 at the end of this section includes the President's FY2020 request for program areas and activities within EPA's S&T account as presented in EPA's FY20 20 Congressional Budget Justification compared to the FY2019 enacted appropriations as reported in the Conference Report ( H.Rept. 116-9 ) accompanying the FY2019 consolidated appropriations that includes the Department of Interior, Environment, and Related Agencies appropriations. Consistent with other recent House and Senate Appropriations Committee reports and explanatory statements, the conference report H.Rept. 116-9 accompanying the FY2019 enacted appropriations did not specify funding for all subprogram areas reported in EPA's budget justification. S&T subprogram areas not reported in congressional reports and statements are noted in the Table 21 as "NR" (not reported). Additionally, the President's FY2018, FY2019, and FY2020 requests and EPA's congressional budget justifications have modified the titles for some of the program areas relative to previous Administrations' budget requests and congressional committee reports' presentations. The House and Senate Appropriations Committees have generally adopted the modified program area titles as presented in the recent budget requests. During House and Senate Committee hearings regarding the President's FY2020 budget request for EPA, Members generally did not support a number of the proposed reductions and eliminations of funding for EPA, including proposed reductions in funding for scientific research programs. Reductions proposed in the FY2020 budget request below the FY2019 enacted levels were distributed across EPA operational functions and activities as well as grants for states, tribes, and local governments. As shown in Table 21 , with few exceptions the requested FY2020 amount for the S&T account for individual EPA program area and activity line items would be less than the FY2019 enacted appropriations. The FY2020 request did not propose to completely eliminate funding for the broader program areas; however, eliminations (no funding is requested for FY2020) are proposed for line-item activities below the program areas as indicated in Table 21 . These program areas include Atmospheric Protection Program (formerly GHG [greenhouse gas] Reporting Program and Climate Protection Program), Indoor Air Radon Program, and Reduce Risks from Indoor Air. For other program areas, proposed reductions in funding included eliminations of certain programs. For example, the proposed reduction in funding for Research: Air and Energy, Research: Safe and Sustainable Water Resources, Research: Sustainable and Healthy Communities, and Research: Chemical Safety and Sustainability program areas for FY2020 included the proposed elimination of funding for the Science to Achieve Results (STAR) program. P.L. 116-6 included $5.0 million for Research: National Priorities within the S&T account for FY2019, an increase compared to $4.1 million included for FY2018. As in the previous Administration's fiscal year requests, the President's FY2020 budget request did not include funding for Research: National Priorities. In addition to clarifying certain funding allocations within the S&T account and consistent with the prior fiscal year appropriations committee reports and explanatory statements, H.Rept. 116-9 provided additional guidance for certain program areas and activities within the S&T account for FY2019. Topics expressly referenced included Alternative Testing; Computational Toxicology; Enhanced Aquifer Use; Integrated Risk Information System (IRIS); Nanomaterials Research; Innovative Research Partnerships; Intramural Animal Testing; Science to Achieve Results (STAR) Grants; Harmful Algal Blooms; Water Distribution Systems; and Water Security Test Beds. The size and structure of the agency's workforce, as was the case during consideration for the FY2018 and FY2019 appropriations, has been a topic of debate during congressional committee hearings regarding EPA's FY2020 appropriations. Workforce reshaping was introduced in the FY2018 request and described as agency-wide organizational restructuring, "reprioritization of agency activities," and reallocation of resources. The FY2020 request for the Operations and Administration program area within the S&T account includes $6.0 million for agency workforce reshaping and efforts to improve the management of EPA's laboratories. As with the FY2018 enacted appropriations, P.L. 116-6 did not fund the President's FY2019 request for EPA workforce reshaping for FY2019. EPA's reported proposed reorganizing strategies, potentially impacting certain aspects of EPA's Office of Research Development (ORD) and the operations of the EPA Office of the Science Advisor (OSA), as well as current EPA laboratories including the National Exposure Research Laboratory (NERL), the National Health and Environmental Effects Research Laboratory (NHEERL), and the National Risk Management Research Laboratory (NRMRL), have also been of interest to some Members of Congress. Appendix A. Acronyms and Abbreviations Appendix B. CRS Contacts for Agency R&D The following table lists the primary CRS experts on R&D funding for the agencies covered in this report.
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President Trump's budget request for FY2020 includes approximately $134.1 billion for research and development (R&D). Several FY2019 appropriations bills had not been enacted at the time the President's FY2020 budget was prepared; therefore, the President's budget included the FY2018 actual funding levels, 2019 annualized continuing resolution (CR) levels, and the FY2020 request levels. On February 15, 2019, Congress enacted the Consolidated Appropriations Act, 2019 (P.L. 116-6). This act included each of the remaining appropriations acts, completing the FY2019 appropriations process. The act also rendered the CR levels identified in the budget no longer relevant, though for some agencies the exact amount of R&D funding in the act remained uncertain. The analysis of government-wide R&D funding in this report compares the President's request for FY2020 to the FY2018 level. For agencies for which the FY2019 R&D funding levels are known, individual agency analyses in this report compare the FY2020 request to FY2019 enacted levels. For agencies for which the FY2019 R&D funding levels remain unknown, individual agency analyses in this report compare the FY2020 request to FY2018 actual levels; when the FY2019 levels become available, these sections will be updated to compare the FY2020 request to FY2019 enacted amounts. As of the date of this report, the House had not completed action on any of the 12 regular appropriations bills for FY2020; nor had the Senate. In FY2018, OMB adopted a change to the definition of development, applying a more narrow treatment it describes as "experimental development." This change was intended to harmonize the reporting of U.S. R&D funding data with the approach used by other nations. The new definition is used in this report. Under the new definition of R&D (applied to both FY2018 and FY2020 figures), President Trump is requesting approximately $134.1 billion for R&D for FY2020, a decrease of $1.7 billion (1.2%) from the FY2018 level. Adjusted for inflation, the President's FY2020 R&D request represents a decrease of 5.1% below the FY2018 level. Funding for R&D is concentrated in a few departments and agencies. In FY2018, eight federal agencies received 96.3% of total federal R&D funding, with the Department of Defense (DOD, 38.6%) and the Department of Health and Human Services (HHS, 27.2%) combined accounting for nearly two-thirds of all federal R&D funding. The same eight agencies account for 97.2% of the FY2020 request, with DOD accounting for 44.3% and HHS for 25.1% Under the President's FY2020 budget request, most federal agencies would see their R&D funding decline. The primary exception is the Department of Defense. DOD's requested R&D funding for FY2020 is $7.1 billion (13.5%) above the FY2018 level. The Departments of Transportation and Veterans Affairs would see small increases in R&D funding. Among the agencies with the largest proposed reductions in R&D funding in the FY2020 budget compared to the FY2018 actual levels are the Department of Energy ($2.8 billion, 15.8%), the National Science Foundation ($567 million, 9.0%), and National Aeronautics and Space Administration ($475 million, 4.0%). The President's FY2020 budget request would reduce funding for basic research by $1.5 billion (4.0%), applied research by $4.3 billion (10.5%), and facilities and equipment by $0.5 billion (12.8%), while increasing funding for development by $4.5 billion (8.3%). President Trump's FY2020 budget is largely silent on funding levels for multiagency R&D initiatives. However, some activities supporting these initiatives are discussed in agency budget justifications and are reported in the agency analyses in this report. The request represents the President's R&D priorities. Congress may opt to agree with none, part, or all of the request, and it may express different priorities through the appropriations process. In recent years, Congress has completed the annual appropriations process after the start of the fiscal year. Completing the process after the start of the fiscal year and the accompanying use of continuing resolutions can affect agencies' execution of their R&D budgets, including the delay or cancellation of planned R&D activities and the acquisition of R&D-related equipment.
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Both the Capitol Rotunda and the Capitol Grounds have been used as the setting for a variety of events, ranging from memorial ceremonies and the reception of foreign dignitaries to the presentation of awards and the hosting of public competitions. This report identifies and categorizes uses of the Capitol Rotunda and Capitol Grounds authorized by concurrent resolutions since the 101 st Congress. In most cases, use of the Capitol Rotunda requires a concurrent resolution agreed to by both the House and Senate. A concurrent resolution for the use of the Rotunda typically identifies the event and date for which use is authorized. Often, the resolution also directs physical preparations to be carried out "in accordance with such conditions as the Architect of the Capitol may provide." Use of the Capitol Grounds requires either the passage of a concurrent resolution or permit approval from the Capitol Police. Events that entail the use of the West Front Steps of the Capitol, electricity on the Lower West Terrace of the Capitol, require more than 24 hours from setup to cleanup, require vehicles on Capitol Grounds for setup, or will have a large number of Members in attendance typically require a concurrent resolution. All other events can typically be issued permits by the U.S. Capitol Police. Upon the completion and opening of the Capitol Visitor Center (CVC) during the 110 th Congress, Emancipation Hall of the CVC became available for use in the same manner as the Rotunda and Capitol Grounds. Use of Emancipation Hall requires the passage of a resolution agreed to by both houses of Congress authorizing its use. Additionally, Congress has provided an ongoing authorization for holiday concerts on Capitol Grounds. Held on Memorial Day, the Fourth of July, and Labor Day, these concerts feature the National Symphony Orchestra and are free and open to the public. A database search was conducted using Congress.gov for the 101 st through the 115 th Congresses (1989-2018). The search was conducted by running a query across all agreed-to concurrent resolutions using the subject term "rotunda." The results of the search were then examined individually to differentiate resolutions for the use of the Rotunda from references to it in otherwise unrelated legislation. The search identified a total of 99 concurrent resolutions that were agreed to by the House and Senate. Between the 101 st Congress and the 115 th Congress, the House and Senate agreed to between one and nine concurrent resolutions per Congress that authorized the use of the Rotunda. Table 1 reports the total number of resolutions agreed to in each Congress. Appendix A , which lists the results of the database search, provides the following information for each concurrent resolution: the Congress in which the resolution was introduced, the resolution number, and the subject of the resolution. Concurrent resolutions authorizing the use of the Rotunda can be divided into seven categories: (1) commemoration ceremonies; (2) Congressional Gold Medal ceremonies; (3) artwork unveilings; (4) presidential inauguration activities; (5) receptions or ceremonies honoring living people; (6) persons lying in state or honor; and (7) prayer vigils. The following sections provide a brief explanation of each category and examples of activities. Table 2 contains the number of concurrent resolutions agreed to by Congress since 1989, by category. The largest percentage of concurrent resolutions (34.3%) authorized the use of the Rotunda for a commemoration ceremony, often of an historical event. For example, concurrent resolutions authorizing the use of the Rotunda for a ceremony as part of the commemoration of the days of remembrance of victims of the Holocaust were passed during each Congress. In recent Congresses, resolutions were also agreed to for Rotunda ceremonies to commemorate the 60 th anniversary of the integration of the U.S. Armed Forces, the 200 th birthday of Constantino Brumidi, the 50 th anniversary of President John F. Kennedy's inauguration, and the 50 th anniversary of the Civil Rights Act of 1964. Ceremonies to award Congressional Gold Medals account for 24.2% of the concurrent resolutions for the use of the Rotunda agreed to since the 101 st Congress. These award ceremonies include presentations of Congressional Gold Medals to Rosa Parks, cartoonist Charles M. Schulz, the Tuskegee Airmen, and other recipients. Since the 101 st Congress, 15.2% of concurrent resolutions have been agreed to for the use of the Rotunda for ceremonies to unveil artwork. These have included unveiling ceremonies for portrait busts of former Vice Presidents, as well as presentation ceremonies of statues prior to placement in Statuary Hall. In preparation for the quadrennial Presidential inauguration activities that take place at the Capitol, concurrent resolutions were passed during the 102 nd , 104 th , 106 th , 108 th , 110 th , 112 th , 113 th , and 115 th Congresses. These resolutions have authorized the Joint Congressional Committee on Inaugural Ceremonies to use the Rotunda "in connection with the proceedings and ceremonies conducted for the inauguration of the President-elect and the Vice President-elect of the United States." Since the 101 st Congress, 10.1% of concurrent resolutions have authorized the use of the Rotunda for inaugural activities. Since the 101 st Congress, 6.1% of concurrent resolutions have authorized the use of the Rotunda for the purposes of receiving foreign dignitaries or honoring a living person. For example, during the 102 nd Congress, use of the Rotunda was authorized for a ceremony and reception for the Dalai Lama. During the 105 th Congress, use of the Rotunda was authorized for a ceremony honoring Mother Teresa. During the 114 th Congress, the use of the Rotunda was authorized for events surrounding the visit by His Holiness Pope Francis to address a joint session of Congress. Use of the Rotunda for individuals to lie in state or honor accounted for 8.1% of Rotunda events authorized by concurrent resolution. These events have included President Reagan, Senator Claude Pepper, and Senator Daniel K. Inouye lying in state; Rosa Parks lying in honor; and the memorial service for Detective John Michael Gibson and Private First Class Jacob Joseph Chestnut of the U.S. Capitol Police. In the 115 th Congress, one individual—Reverend Billy Graham—lay in honor, while two—Senator John McCain and President George H.W. Bush—lay in state. On two occasions during the 107 th Congress (2.0%), concurrent resolutions were agreed to for the use of the Rotunda for prayer vigils. H.Con.Res. 233 authorized the use of the Rotunda for a prayer vigil in memory of those who lost their lives on September 11, 2001. S.Con.Res. 83 authorized the use of the Rotunda for a ceremony as part of a National Day of Reconciliation. A database search was conducted using Congress.gov for the 101 st to the 115 th Congresses (1989-2019). The search was conducted by running a query using the subject term "Capitol Grounds." The results of the search were then examined individually to differentiate resolutions for the use of the Capitol Grounds from references to it in otherwise unrelated legislation. The uses of the Capitol Grounds identified here are restricted to those authorized by concurrent resolution of the House and Senate. The search identified a total 112 concurrent resolutions that were agreed to by the House and Senate. Between the 101 st Congress and the 115 th Congress, the House and Senate agreed to between 3 and 14 concurrent resolutions per Congress that authorized the use of the Capitol Grounds. Table 3 reports the total number of resolutions agreed to in each Congress. Appendix B , which lists the results of the database search, provides the following information for each concurrent resolution: the Congress in which the resolution was introduced, the resolution number, and the subject of the resolution. Concurrent resolutions authorizing the use of the Capitol Grounds can be divided into one of four categories: (1) events sponsored by nonfederal-government groups; (2) memorial services; (3) events sponsored by the federal government; and (4) award and dedication ceremonies. The following sections provide a brief explanation of each category with examples of the types of activities concurrent resolutions provided for on the Capitol Grounds. Table 4 contains the number of concurrent resolutions agreed to by Congress since 1989 by category. The largest percentage of concurrent resolutions agreed to (65.5%) authorized events that are sponsored by nonfederal-government entities. For example, concurrent resolutions authorizing the use of the Capitol Grounds for the Greater Washington Soap Box Derby and the District of Columbia Special Olympics Law Enforcement Torch Relay are typically agreed to each Congress. Memorial services held on the Capitol Grounds account for 23% of the concurrent resolutions passed since the 101 st Congress. Each year since 1989, the House and Senate have agreed to a concurrent resolution allowing the National Peace Officers' Memorial Service to be conducted on Capitol Grounds. The ceremony honors law enforcement officers who gave their lives in the line of duty during the previous year. Events sponsored by the federal government compose 8.8% of events on the Capitol Grounds authorized by concurrent resolution. These events have included authorizing the John F. Kennedy Center for the Performing Arts to hold performances on the East Front of the Capitol, allowing the National Book Festival to run programs on the Capitol Grounds, and authorizing a celebration for the Library of Congress's 200 th birthday. Award and dedication ceremonies account for 2.7% of events authorized by concurrent resolution for the Capitol Grounds. Since 1989, three award and dedication ceremonies have been authorized through concurrent resolution. In the 106 th Congress (1999-2001), Congress authorized the use of the Capitol Grounds for the dedication of the Japanese-American Memorial to Patriotism; in the 108 th Congress (2003-2005), the dedication ceremony for the National World War II Memorial was authorized for the Capitol Grounds; and in the 110 th Congress (2007-2009), the presentation ceremony for the Congressional Gold Medal awarded to Tenzin Gyatso, the Fourteenth Dalai Lama, took place on the Capitol Grounds. Upon the completion and opening of the Capitol Visitor Center (CVC) during the 110 th Congress, Emancipation Hall of the CVC became available for use in the same manner as the Rotunda and Capitol Grounds. Use of Emancipation Hall requires the passage of a resolution agreed to by both houses of Congress authorizing its use. The first concurrent resolution authorizing the use of Emancipation Hall was agreed to during the 110 th Congress. It provided for the use of the Hall in connection with "ceremonies and activities held in connection with the opening of the Capitol Visitor Center to the public." Consistent with previous resolutions authorizing the use of the Rotunda, the concurrent resolution for the use of Emancipation Hall directed that physical preparations be carried out "in accordance with such conditions as the Architect of the Capitol may provide." A database search was conducted using Congress.gov for the 110 th through the 115 th Congresses (2007-2017). The search was conducted by running a query using the subject term "Emancipation Hall." The uses of Emancipation Hall identified here are restricted to those authorized by concurrent resolution of the House and Senate. The search identified a total 43 concurrent resolutions that were agreed to by the House and Senate. Between the 110 th Congress and the 115 th Congress, the House and Senate agreed to between 1 and 15 concurrent resolutions per Congress that authorized the use of Emancipation Hall. Table 5 reports the total number of resolutions agreed to in each Congress. Appendix C , which lists the results of the database search, provides the following information for each concurrent resolution: the Congress in which the resolution was introduced, the resolution number, and the subject of the resolution. Concurrent resolutions authorizing the use of Emancipation Hall can be divided into one of four categories: (1) commemoration ceremonies, (2) congressional gold medal ceremonies, (3) artwork unveilings, and (4) presidential inauguration activities. The following sections provide a brief explanation of each category with examples of the types of activities concurrent resolutions provided for on Emancipation Hall. Table 6 contains the number of concurrent resolution agreed to by Congress since 2007 by category. The largest percentage of concurrent resolutions agreed to (46.5%) authorized the use of Emancipation Hall for commemoration ceremonies. For example, concurrent resolutions authorizing the use of Emancipation Hall are agreed to annually to celebrate the birthday of King Kamehameha. Ceremonies to award Congressional Gold Medals account for 32.6% of the concurrent resolutions for the use of Emancipation Hall agreed to since the 110 th Congress. These award ceremonies include presentations of Congressional Gold Medals to Women Air Force Service Pilots, the Montford Point Marines, and Native American Code Talkers. Since the 110 th Congress, 11.6% of concurrent resolutions have been agreed to for the use of Emancipation Hall for ceremonies to unveil artwork. These have included unveiling ceremonies for a bust of Sojourner Truth, a marker acknowledging the role of slaves in building the Capitol, a statue of Frederick Douglass, and the American Prisoners of War/Missing in Action (POW/MIA) Chair of Honor. Since Emancipation Hall opened in the middle of the 110 th Congress, Congress has also utilized the space for inaugural activities. Just like the resolutions authorizing the use of the Rotunda for inaugural activities, these resolutions have authorized the Joint Congressional Committee on Inaugural Ceremonies to use Emancipation Hall "in connection with the proceedings and ceremonies conducted for the inauguration of the President-elect and the Vice President-elect of the United States." Since the 110 th Congress, 9.3% of concurrent resolutions have authorized the use of the Rotunda for inaugural activities. Appendix A. Concurrent Resolutions for the Use of the Capitol Rotunda Appendix B. Concurrent Resolutions for the Use of the Capitol Grounds Appendix C. Concurrent Resolutions Agreed to for the Use of Emancipation Hall
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The Capitol Rotunda and the Capitol Grounds have been used as the setting for a variety of events, ranging from memorial ceremonies and the reception of foreign dignitaries to the presentation of awards and the hosting of public competitions. This report identifies and categorizes uses of the Capitol Rotunda and Capitol Grounds authorized by concurrent resolutions since the 101st Congress. In most cases, use of the Capitol Rotunda requires a concurrent resolution agreed to by both the House and Senate. A concurrent resolution for the use of the Rotunda typically identifies the event and date for which use is authorized. Often, the resolution also directs physical preparations to be carried out under the supervision of the Architect of the Capitol. Ninety-nine concurrent resolutions were agreed to by the House and the Senate authorizing the use of the Rotunda between the 101st and the 115th Congresses. These resolutions can be divided into seven categories: (1) commemoration ceremonies; (2) Congressional Gold Medal ceremonies; (3) artwork unveilings; (4) presidential inauguration activities; (5) receptions or ceremonies honoring living people; (6) persons lying in state or honor; and (7) prayer vigils. Use of the Capitol Grounds can be authorized either by the passage of a concurrent resolution or through an application process with the Capitol Police. A concurrent resolution is typically needed for events longer than 24 hours in duration, for events that require vehicles on the Capitol Grounds for setup, for events requiring electronics on the Lower West Terrace of the Capitol, and for events where a large number of Members will be in attendance. The Capitol Police's special events office handles permits and approval for all other events. One hundred twelve concurrent resolutions were agreed to by the House and the Senate authorizing the use of the Capitol Grounds between the 101st and the 115th Congresses. These resolutions can be divided into four categories: (1) events sponsored by nonfederal-government groups; (2) memorial services; (3) events sponsored by the federal government; and (4) award and dedication ceremonies. Upon the completion and opening of the Capitol Visitor Center (CVC) during the 110th Congress, Emancipation Hall of the CVC became available for use in the same manner as the Rotunda and Capitol Grounds. Use of Emancipation Hall requires the passage of a resolution agreed to by both houses of Congress authorizing its use. These resolutions can be divided into four categories: (1) commemoration ceremonies, (2) congressional gold medal ceremonies, (3) artwork unveilings, and (4) presidential inauguration activities. As of the date of this report, 43 concurrent resolutions authorizing the use of Emancipation Hall have been agreed to. This report will be updated at the end of each session of Congress.
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The United Arab Emirates (UAE) is a federation of seven emirates (principalities): Abu Dhabi, the oil-rich federation capital; Dubai, a large commercial hub; and the five smaller and less wealthy emirates of Sharjah, Ajman, Fujayrah, Umm al-Qaywayn, and Ras al-Khaymah. Sharjah and Ras al-Khaymah have a common ruling family—leaders of the Al Qawasim tribe. After Britain announced in 1968 that it would no longer ensure security in the Gulf, six "Trucial States" formed the UAE federation in December 1971; Ras al-Khaymah joined in 1972. The federation's last major leadership transition occurred in November 2004, upon the death of the first UAE president and ruler of Abu Dhabi, Shaykh Zayid bin Sultan Al Nuhayyan. Shaykh Zayid's eldest son, Shaykh Khalifa bin Zayid al-Nuhayyan, born in 1948, was elevated from Crown Prince to ruler of Abu Dhabi upon Zayid's death. In keeping with a long-standing agreement among the seven emirates, Khalifa was subsequently selected as UAE president by the leaders of all the emirates, who collectively comprise the "Federal Supreme Council." The ruler of Dubai traditionally serves concurrently as Vice President and Prime Minister of the UAE; that position has been held by Shaykh Mohammad bin Rashid Al Maktum, architect of Dubai's modernization drive, since the death of his elder brother Shaykh Maktum bin Rashid Al Maktum in January 2006. The Federal Supreme Council meets four times per year to establish general policy guidelines, although the leaders of the emirates consult frequently with each other. UAE leadership posts almost always change only in the event of death of an incumbent. The leadership of the UAE was put into doubt by Shaykh Khalifa's stroke on January 24, 2014. He has not appeared publicly since and reportedly is incapacitated, but, in order not to cause turmoil within ruling circles, there is unlikely to be a formal succession as long as he remains alive. His younger brother and the third son of Shaykh Zayid, Crown Prince Shaykh Mohammad bin Zayid al-Nuhayyan (born in 1961), is almost certain to succeed him in all posts. Shaykh Mohammad had been assuming day-to-day governing responsibilities prior to Khalifa's stroke and has been de facto leader since. He and Shaykh Mohammad bin Rashid of Dubai have long been considered the key strategists of UAE foreign and defense policy. Several senior UAE officials are also brothers of Shaykh Mohammad bin Zayid, including Foreign Minister Abdullah bin Zayid, deputy Prime Minister Mansur bin Zayid, deputy Prime Minister and Minister of Interior Sayf bin Zayid, and National Security Advisor Shaykh Tahnoun bin Zayid. In 2017, Shaykh Mohammad appointed his son, Khalid bin Mohammad, as deputy National Security Adviser. As shown in the table above, each emirate has its own leader. The five smaller emirates, often called the "northern emirates," tend to be more politically and religiously conservative and homogenous than are Abu Dhabi and Dubai, which are urban amalgams populated by many Arab, South Asian, and European expatriates. UAE leaders argue that the country's social tolerance and distribution of national wealth have rendered the bulk of the population satisfied with the political system, and that Emiratis are able to express their concerns directly to the country's leaders through traditional consultative mechanisms. Most prominent among these channels are the open majlis (councils) held by many UAE leaders. UAE officials maintain that Western-style political parties and elections for a legislature or other representative body would aggravate schisms among tribes and clans, cause Islamist factions to become radical, and open UAE politics to regional influence. UAE officials have stated that the UAE's end goal is not to form a multiparty system, arguing that this model does not correspond with UAE cultural or historical development. Such assertions appear, at least in part, to signal that the country will work to prohibit the development of factions linked to regional Islamist movements or to regimes in the region. UAE law prohibits political parties. The UAE has provided for some formal popular representation through a 40-seat Federal National Council (FNC)—a body that can review and recommend, but not enact or veto, legislation. The FNC can question, but not remove, ministers and it conducts such questionings regularly. Its sessions are open to the public. The seat distribution of the FNC is weighted in favor of Abu Dhabi and Dubai, which each hold eight seats. Sharjah and Ras al-Khaymah have six each, and the others each have four. The government has not implemented calls, such as were expressed in a March 2011 petition signed by 160 UAE intellectuals, to transform the FNC into an all-elected body with full legislative powers. Each emirate also has its own appointed consultative council. First FNC Vote s . In 2006, the UAE leadership apparently assessed that it had fallen too far behind its Gulf neighbors on political reform and relented to the suggestion to make at least part of the FNC seats elective. In December 2006, the government instituted a limited election process for half of the FNC seats, with the other 20 FNC seats remaining appointed. The Election Commission approved a small "electorate" of about 6,600 persons, of which about 20% were women. Out of the 452 candidates for the 20 elected seats, there were 65 female candidates. Only one woman was elected (from Abu Dhabi), but another seven were given appointed seats. The September 24, 2011, FNC election was held in the context of the "Arab spring" uprisings, with an expanded electorate (129,000), nearly half of which were female. There were 468 candidates for the 20 seats, including 85 women. However, there was little campaigning, and turnout was about 25%, which UAE officials called disappointing. Of the 20 winners, only one was female. Other winners were elected largely along tribal lines. Of the 20 appointed seats, 6 were women. The government selected a woman, Amal al-Qubaisi, to be deputy speaker—the first woman to hold as high a position in a GCC representative body. The 2015 elections were again for half the FNC, but the electorate was expanded to 225,000 voters, about double that in 2011. The 2015 process included "early voting" and out of country voting, culminating on "election day" of October 3, 2015. There were 330 candidates (somewhat lower than in 2011), including 74 women (almost as many as in 2011). Turnout was 35%, which government officials stated was a more satisfactory turnout than in 2011. One woman was elected, as happened in 2011. Of the 20 appointed seats, eight were women. Of those, Abu Dhabi representative Ms. Amal al-Qubaisi, was promoted to speaker. The next FNC elections are to be held in the fall of 2019. UAE officials assert that there are plans to eventually make all 40 seats elected, but likely not in the 2019 vote. In December 2018, the UAE leadership decreed that, as of the 2019 election, half of the FNC members will be women – a quota presumably be achieved by appointing enough women to constitute half of the body, after accounting for those elected. A National Election Committee has been meeting to review procedures, particularly the use of technology for voter screening, for the upcoming election. There has been little evident clamor for major political reform, but some UAE intellectuals, businessmen, students, and others have agitated for greater political space. During the 2011 "Arab Spring" uprisings, some UAE youth tried unsuccessfully to use social media to organize a public protest in March 2011. Five high-profile activists—the so-called "UAE-5"—were put on trial in November 2011. They were convicted and their sentences were commuted. The government has particularly targeted for arrest Islamists linked to the Muslim Brotherhood organization, which UAE leaders named in 2014 as one of 85 "terrorist organizations"(a list that included Al Qaeda and the Islamic State). The UAE affiliate of the Brotherhood is the Islah (Reform) organization, which emerged in 1974 as an offshoot of the Muslim Brotherhood and attracts followers mostly from the less wealthy and more religiously conservative northern emirates. UAE officials accuse Islah of being funded by the main Brotherhood chapter in Egypt. The government stepped up its crackdown on Islah in 2012, the year that Muslim Brotherhood figure Mohammad Morsi was elected president of Egypt. UAE authorities arrested and revoked the citizenship of several senior Islah members, including a member of the Ras al-Khaymah ruling family. In July 2013, the UAE State Security Court convicted and sentenced 69 out of 94 UAE nationals ("UAE-94")—Islamists arrested during 2011-2013—for trying to overthrow the UAE government. In June 2014, 30 persons, of which 20 are Egyptian nationals, were convicted for connections to the Muslim Brotherhood organization in Egypt. A Saudi-UAE list of "persons to be isolated," released in connection with the June 2017 intra-GCC dispute, included Muslim Brotherhood-linked Egyptian cleric Yusuf Qaradawi, who resides in Qatar. The disagreements between Qatar and the UAE and other GCC states over the Muslim Brotherhood and other political Islamist movements are discussed further in the section on foreign policy. The government has also addressed domestic opposition with reforms and economic incentives. In 2011, the government invested $1.5 billion in utilities infrastructure of the poorer, northern emirates; raised military pensions; and began subsidizing some foods. In 2013, a "new look" cabinet included several young figures. Cabinet reshuffles in February 2016 and October 2017 added more young ministers, many of them female, and established minister of state positions for "tolerance," "happiness," artificial intelligence, and food security. Other reforms included formation of an Emirates Foundation for Schools, run by an independent board of directors; limiting the mandate of the Ministry of Health to a focus on disease prevention; and creating a science council with a mandate to promote a new generation of Emirati scientists. Human rights observers assert that U.S. officials downplay criticism of the UAE's human rights record because of the U.S.-UAE strategic alliance. U.S. officials assert that they continue to promote democracy, rule of law, independent media, and civil society in the UAE through State Department programs that are tolerated by the UAE government. Such programs have included the broader Middle East Partnership Initiative (MEPI), which has its headquarters for the Gulf region located at the U.S. Embassy in Abu Dhabi. On the other hand, the UAE government has expelled some U.S. and European-sponsored democracy promotion efforts that the government asserted were too intrusive into UAE politics. In 2012, the government ordered closed the offices in the UAE of the National Democratic Institute (NDI) and the Germany-based Konrad Adenauer Foundation. No U.S. funding for democracy promotion in UAE has been provided in recent years. Recent State Department human rights reports and reports by independent groups such as Human Rights Watch assert that there are a variety of human rights problems in the UAE including: unverified reports of torture, government restrictions of freedoms of speech and assembly, and lack of judicial independence. UAE organizations that monitor the government's human rights performance include the Jurists' Association's Human Rights Committee, the Emirates Human Rights Association (EHRA), and the Emirates Center for Human Rights (ECHR), but their degree of independence is uncertain. In a January 2018 U.N. Human Rights Council Universal Periodic Review, UAE officials highlighted that they had formed a new human rights commission under international standards known as the "Paris Principles"—a response to reports that British police were investigating UAE officials suspected of torturing Qatari nationals. According to the State Department, there are an estimated 20,000 to 100,000 stateless persons in the UAE ("Bidoon"). Most Bidoon lacked citizenship because they did not have the preferred tribal affiliation when the country was founded. They lack accepted forms of identification and their movements within the UAE or internationally are restricted. The UAE government has increased restrictions on media usage, particularly social media, since the 2011 Arab uprisings, tempering its former commitment to free and open media. A 2012 "cybercrimes decree" (Federal Legal Decree No. 5/2012) established a legal basis to prosecute and jail people who use information technology to promote dissent. It provides for imprisonment for using information technology to "incite actions that endanger state security or infringe on the public order," and for life imprisonment for anyone using such technology to advocate the overthrow of the government. In May 2015, the government enacted an Anti-Discrimination Law, which criminalizes the publication of "provocative" political or religious material. Several activists have been jailed for violating the decree, including Ahmed Mansoor, who was arrested in 2018 for "defaming" the country on social media. On December 31, 2018, a UAE court upheld his 10-year prison sentence and fine of $272,000. A "National Media Council" (NMC) directly oversees all media content, and provisions governing media licensing do not clearly articulate government standards in evaluating license applications. Restrictions do not apply to the "Free Zones" in UAE in which foreign media operate. However, some media organizations report that the government has banned some journalists from entering the country, and prohibited distribution of books and articles that highlight human rights abuses. The country has also become less welcoming of research institutes, several of which had opened in UAE in the 1990s. The government applied increasingly strict criteria to renewing the licenses of some research institutes and some left the UAE as a result. In November 2012, the UAE ordered out the Rand Corporation, and UAE officials have denied entry to some academics and human rights organizations representatives who have been critical of the UAE's human rights record. On the other hand, some new UAE-run think tanks have opened or become increasingly active in recent years, including the Emirates Policy Center and the TRENDS Institute. The UAE constitution provides for an independent judiciary, but court decisions are subject to review and overrule by political leaders. UAE judicial institutions include Sharia (Islamic law) courts that adjudicate criminal and family law matters, and civil courts that adjudicate civil matters. The civil court system, based on French and Egyptian legal systems, was established in 1973 when a Federal Supreme Court was inaugurated. This court, which consists of a president and a five judges appointed by the UAE leadership, adjudicates disputes between emirates or between an emirate and the UAE federal government; the constitutionality of federal and other laws; conflicts of jurisdiction between the federal and local judicial authorities; and crimes affecting the UAE federation. It also interprets the provisions of the constitution and questions ministers and senior federal officials for official misconduct. A 2012 amendment to the UAE constitution set up a "Federal Judicial Council" chaired by the UAE president, which human rights groups asserted reflected increased political influence over the judiciary. Foreign nationals hold positions in the judiciary, making them subject to being threatened with deportation for judgments against Emiratis. In 2010, a UAE court acquitted the UAE president's brother of torturing an Afghan merchant, ruling that he was not liable because he was affected by prescription drugs. The UAE justice system has often come under criticism in cases involving expatriates. Western expatriates have sometimes been arrested for sexual activity on beaches. In 2007, human rights groups criticized the conservative-dominated justice system for threatening to prosecute a 15-year-old French expatriate for homosexuality, a crime in UAE, when he was raped by two UAE men; the UAE men were later sentenced for sexual assault and kidnapping. In August 2012, a 78-year-old pediatrician from South Africa was imprisoned for two months for alleged issues of malpractice related to his six-week service as a doctor in Abu Dhabi in 2002 and he was prevented from leaving the UAE until June 2013. In May 2018, UAE authorities detained a British academic, Matthew Hedges, on charges of "spying for a foreign state." He was sentenced to life imprisonment in November but shortly thereafter, following expressions of outrage from British and other world leaders, was pardoned by the leadership. Women's political rights have expanded steadily. As of December 2011, UAE women are allowed to pass on their citizenship to their children—the first GCC state to allow this. However, UAE women are still at a legal disadvantage relative to men, for example in divorce cases and other family law issues. The penal code allows men to use physical means, including violence, against female family members. Many domestic service jobs are performed by migrant women, and they are denied basic legal protections such as limits to work hours. Recent cabinet reshuffles have greatly increased the number of female ministers. Seven women are in the FNC, one is now its speaker, and, as noted, the FNC will have women as half its members after the 2019 vote. About 10% of the UAE diplomatic corps is female, whereas there were no female diplomats prior to 2001. The UAE Air Force has several female fighter pilots. The UAE constitution provides for freedom of religion but also declares Islam as the official religion. The death penalty for conversion from Islam remains in law, but is not known to be enforced. In practice, non-Muslims in UAE are free to practice their religion. UAE officials boast of the country's religious tolerance by citing the 40 churches in the UAE, of a variety of denominations. In 2016 the government donated additional lands for the building of more churches, as well as some new Hindu and Sikh temples. In January 2017, the Ministry hosted an event for 30 Christian leaders from nine denominations located throughout the Gulf; the event took place at the site of an early Christian monastery on Sir Bani Yas Island in Abu Dhabi. In November 2017, the Abu Dhabi Department of Justice signed an agreement with Christian leadership to allow churches to handle non-Islamic marriages and divorces. In September 2016, Shaykh Mohammad bin Zayid met with Pope Francis in the Vatican and invited him to visit. The visit took place during February 3-5, 2019, and enabled the UAE—at a time of widespread criticism of its intervention in Yemen—to showcase its commitment to religious tolerance, and the Pope to advocate for the creation of more churches in the UAE to better accommodate the approximately 1 million Christians in the country, almost all of whom are expatriates. The papal visit was the first such trip to the Gulf region. There are no Jewish synagogues or Buddhist temples. The Shia Muslim minority, which is about 15% of the citizen population and is concentrated largely in Dubai emirate, is free to worship and maintain its own mosques. However, Shia mosques receive no government funds and there are no Shias in top federal posts. At times, the government has acted against non-UAE Shia Muslims because of their perceived support for Iran and Iran's regional allies. The government has at times closed Shia schools and prohibited the holding of conferences for international Shias. The government has deported some foreign Shias in recent years. UAE law prohibits all forms of compulsory labor, but enforcement is inconsistent. On several occasions, foreign laborers working on large construction projects have conducted strikes to protest poor working conditions and nonpayment of wages. There have been numerous and persistent allegations that foreign workers are housed in cramped "labor camp" conditions, have their passports held, are denied wages or paid late, are forced to work long hours, are deported for lodging complaints, and are subjected to many other abuses. In May 2014, the government arrested foreign laborers striking to protest many of the conditions discussed above in the course of building a facility for New York University's (NYU's) branch in Abu Dhabi. NYU apologized to the workers for being excluded from a labor "code of conduct" that covers migrant workers in the UAE and compensated several hundred of them. The government has put in place a "Wages Protection System," an electronic salary payments system that requires companies with more than 100 workers to pay workers via approved banks and other financial institutions, thereby facilitating timely payment of agreed wages. The Ministry of Human Resources and Emiratization (MOHRE, formerly the Labor Ministry) has addressed problems such as those above by penalizing employers and requiring that workers' salaries be deposited directly in banks. In 2011 the UAE reformed its "kafala" system to allow migrant workers to more easily switch employers, producing higher earnings by immigrant laborers in the country. The UAE is considered a "destination country" for women trafficked from Asia and the former Soviet Union. The Trafficking in Persons report for 2018, for the eighth year in a row, rated the UAE as "Tier 2." The rating is based on the assessment that the UAE does not meet the minimum standards for eliminating human trafficking, but is taking significant efforts to do so. The 2018 State Department report credits the UAE with implementing reforms that reduce forced labor among foreign workers in the private sector, instituting direct governmental oversight of domestic laborers, increasing the number of labor trafficking prosecutions, and funding and implementing a national action plan to combat trafficking in persons. UAE authorities continue to prosecute and punish sex trafficking offenders. In March 2015, the government put into effect amendments to victim protection clauses of Federal Law 51 of 2006 on Combating Human Trafficking Crimes. Since 2013, the UAE government, through its "National Committee to Combat Human Trafficking," has assisted human trafficking victims, including through shelters in several UAE emirates. The government opened its first shelter for male sexual trafficking victims in 2013. The government assists victims of human trafficking through a human rights office at Dubai International Airport. An issue in previous years was trafficking of young boys as camel jockeys, a concern alleviated with repatriation of many of those trafficked and the use of robot jockeys. Despite its small population and territorial size, the UAE is increasingly attempting to influence regional outcomes. Its assertiveness has been enhanced by the training, arms, and advice the country has received from its close security partnership with the United States, forged during the 1980-1988 Iran-Iraq war and strengthened after the 1990 Iraqi invasion of Kuwait. The UAE and the five other members of the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman) also have close defense ties to the United States. The alliance was formed in late 1981 in response to the Iran-Iraq war, during which the GCC states gave extensive financial and political backing to Iraq. The UAE and Saudi Arabia are closely aligned, particularly in their assertion that Islamist movements including the Muslim Brotherhood pose a significant threat. UAE leaders have publicly defended Saudi Crown Prince Mohammad bin Salman Al Saud against criticism caused by the Saudi killing of U.S.-based Saudi journalist Jamal Kashoggi at the Saudi consulate in Istanbul on October 2, 2018. The Saudi-UAE alliance has contributed to a fracturing of the GCC since the June 5, 2017, move by the two, joined by Bahrain, Egypt, and a few other Muslim states, to isolate Qatar by denying it land, sea, and air access to their territories. The UAE and Saudi Arabia asserted that Qatar supports Iran and Muslim Brotherhood-related movements, although many experts assert that Saudi Arabia and the UAE sought primarily to limit Qatar's foreign policy independence. The rift has, to date, defied mediation efforts by U.S. officials and caused repeated postponements of a U.S.-GCC summit—first planned for May 2018—that is to formally unveil a U.S.-led "Middle East Strategic Alliance" (MESA) to counter Iran. Some press accounts refer to the MESA as an "Arab NATO," which was to consist of the GCC states, Jordan, and Egypt. However, the plan suffered a setback in April 2019 when Egypt said it would not join a MESA, possibly as a protest of the Administration's strong support for Israeli Prime Minister Benjamin Netanyahu. Among other consequences of the intra-GCC rift, in December 2017, Saudi Arabia and the UAE announced the formation of a "joint cooperation committee" as a subgroup of the GCC. The rift has scuttled long-standing GCC plans to establish a joint military command and joint naval force to be based in Bahrain, supported by an Abu Dhabi-based "Gulf Academy for Strategic and Security Studies." Saudi Arabia, possibly as an overture, formally invited the Amir of Qatar to the GCC summit of December 7-9, 2018, but the Amir did not attend. Yet, the UAE and Saudi Arabia have allowed Qatari commanders to participate in joint GCC security meetings, suggesting that the UAE and Saudi Arabia do not want the Trump Administration to assess them as harming U.S. security interests in the Gulf. The broader issues dividing Qatar and some of its neighbors had caused rifts in the past, although not as extended as the current crisis. In March 2014, the UAE, Saudi Arabia, and Bahrain recalled their ambassadors from Qatar, but that dispute was resolved in November 2014 following an agreement that the GCC countries will not undermine each other's interests. Despite its strategic alliance with Saudi Arabia, the UAE has had border disputes and other disagreements with the Kingdom. A 1974 "Treaty of Jeddah" with Saudi Arabia formalized Saudi access to the Persian Gulf via a corridor running through UAE, in return for UAE gaining formal control of villages in the Buraymi oasis area. In March 2011, the UAE contributed 500 police officers to a Saudi-led GCC military intervention in Bahrain to support the Al Khalifa regime against a Shia-led uprising. At least some of the UAE force remained after that time, and one UAE police officer was killed in a bombing in Manama in March 2014. UAE leaders assert that Iran is a threat to the UAE and the region and must be countered assertively. UAE leaders publicly backed the July 2015 Iran nuclear agreement (Joint Comprehensive Plan of Action, JCPOA), while simultaneously expressing reservations that the pact would reduce the U.S. interest in countering Iran's regional activities. UAE leaders strongly support the Trump Administration's characterization of Iran as a major U.S. adversary, its May 2018 withdrawal from the JCPOA, and its reimposition of all U.S. sanctions on Iran. UAE officials have committed, along with Saudi leaders and others, to ensure that the global oil market remains well supplied to support the April 2019 U.S. decision to sanction countries that continue to import Iranian oil. UAE leaders have explained the UAE intervention in Yemen, discussed further below, primarily as an effort to counter Iran's regional ambitions. In January 2016, the UAE withdrew its ambassador from Iran in solidarity with Saudi Arabia's breaking relations with Iran over issues related to the Saudi execution of a dissident Shia cleric. Because of Hezbollah's affiliation with Iran, in February 2016, the UAE barred its nationals from travelling to Lebanon, downgraded its diplomatic relations with Lebanon, and joined the other GCC states in a declaration that Hezbollah is a terrorist organization. UAE policy in east Africa, Yemen, Syria, and elsewhere is driven largely by the UAE objective of weakening Iran. Some UAE officials assert that the large Iranian-origin community in Dubai emirate (estimated at 400,000 persons) could pose a "fifth column" threat to UAE stability. Dubai leaders express less concern about Iranian-origin residents, asserting that this population is a product of long-standing UAE-Iran commercial ties. The extensive Iranian commercial presence in the UAE also gives the United States ample opportunity to enlist the UAE in sanctioning Iran. In 2010, when international sanctions on Iran tightened dramatically, the UAE government directed its banks to limit transactions with Iran, even though a decline in UAE-Iran trade harmed the powerful UAE trading community. An additional complication in UAE-Iran relations is a dispute over several Persian Gulf islands. In 1971, Iran, then ruled by the U.S.-backed Shah, seized the Greater and Lesser Tunb islands from the emirate of Ras al-Khaymah, and intimidated the emirate of Sharjah to reach an agreement for shared control of another island, Abu Musa. In April 1992, Iran asserted complete control of Abu Musa. The UAE has called for peaceful resolution of the issue through direct negotiations, referral to the International Court of Justice, or through another agreed forum. The United States takes no position on the sovereignty of the islands, and supports the UAE's call to negotiate the dispute. In October 2008—after the UAE protested Iran's opening in August 2008 of administrative and maritime security offices on Abu Musa—the UAE and Iran established a joint commission to resolve the dispute. The dispute flared again in 2012, when then-President Ahmadinejad visited Abu Musa and spoke to the inhabitants there, an action that UAE officials said undermined diplomacy on the issue, including the appointment of negotiators. Iran incurred further UAE criticism with a May 2012 visit to Abu Musa by then-Islamic Revolutionary Guard Corps (IRGC) Commander-in-Chief Mohammad Ali Jafari. In 2014, the two countries discussed a possible solution under which Iran might cede control of the disputed islands in exchange for rights to the seabed around them. Iran reduced its presence on Abu Musa as a confidence-building measure. No discussions have been reported in recent years. Since the 2011 Arab uprisings, the UAE has become more active in the region, including through the use of its own military forces and its development of regional military facilities from which to project power. The UAE's capabilities have been enhanced by the many years of defense cooperation with the United States. The UAE's opposition to the Muslim Brotherhood generally drives its policies toward countries where Brotherhood-linked groups are prominent. In line with opposition to the Muslim Brotherhood, the UAE supported the Egyptian military's 2013 toppling of Muslim Brotherhood figure Mohammad Morsi, who was elected president in 2012. The UAE has given Egypt over $20 billion in assistance (including loans, grants, and investments) since the ouster of Morsi. UAE officials denied that they had blocked a potential competitor to President Sisi in March 2018 elections from leaving UAE to return to Egypt. Intra-GCC differences—as well as differences between the UAE and U.S. policy—have manifested in post-Qadhafi Libya. In 2011, several GCC states, including the UAE, conducted air strikes and armed some Libyan rebels to help overthrow then-Libyan leader Muammar Qadhafi. In post-Qadhafi Libya, the UAE and Qatar support rival groups in the highly fractured country. The UAE, possibly in violation of U.N. Security Council resolutions on Libya, reportedly provides arms in support of Field Marshal Khalifa Hafter and his Libyan National Army (LNA) movement and reportedly continues to support operations at an airbase in eastern Libya from which pro-LNA forces fly air strikes. Hafter, a former commander in the Libyan armed forces, has refused to recognize the authority of the U.N.-backed Government of National Accord (GNA) and leads a coalition of military personnel and militias that has fought Islamist groups and some GNA-aligned forces. In July 2018, press reports claimed that UAE-based entities had signed agreements with Hafter-aligned oil authorities in eastern Libya to export Libyan oil in violation of U.N. Security Council resolutions. Other outside actors, including Russia, have given Hafter some backing as well. These actors have backed Hafter's April 2019 advance on Tripoli as an attempt to unify Libya and counter Islamist militia groups that back the GNA. In August 2014, the UAE and Egypt carried out an air strike in Libya against a Muslim Brotherhood-linked Islamist militia that reportedly enjoyed support from Qatar. The United States criticized the strike as detracting from Libyan stability. The UAE is a member of the U.S.-led coalition against the Islamic State organization. During 2014-2015, it conducted more strikes in Syria against Islamic State positions than any country except the United States, and was the only Arab state that the United States permitted to command strikes there. The UAE also hosted other forces participating in the anti-Islamic State effort, including French jets stationed at Al Dhafra Air Base and 600 forces from Australia. The GCC states, including the UAE, at first sought to help oust Assad in part to strategically weaken Assad's ally, Iran. The UAE contributed to a multilateral pool of funds to buy arms for approved rebel groups in Syria. After Russia's intervention in Syria in 2015, the UAE accepted Assad's eventual victory. In recognition of Russia's predominant position in Syria, and its growing involvement in the region more generally, de facto UAE leader Mohammad bin Zayid has engaged Russian leaders with increasing frequency. On December 27, 2018, and in the wake of President Trump's announcement that a substantial portion of the 2,000 U.S. troops in Syria would be withdrawn, the UAE reopened its embassy in Damascus. UAE officials explained the move as an effort to reassert Arab influence in counter to Iran's presence in Syria. It is unclear whether the UAE will invest in any reconstruction in Syria. The UAE has also sought to alleviate suffering from the Syria crisis through donations to Syrian refugees and grants to Jordan to help it cope with the Syrian refugees that have fled there. In 2018, the UAE, Saudi Arabia, and Kuwait provided $2.5 billion to help stabilize Jordan's finances. The UAE portion was about $833 million. UAE forces also have participated in annual military exercises in Jordan intended to help protect Jordan from Syria conflict spillover. The GCC states all supported Iraq against Iran in the 1980-1988 Iran-Iraq war, and all broke relations with Iraq after it invaded Kuwait in 1990s. No Arab state, including the UAE, participated in the U.S.-led invasion that overthrew Saddam Hussein in 2003. In 2008, the UAE posted an ambassador to Iraq, wrote off $7 billion in Iraqi debt, and Shaykh Mohammad bin Zayid visited the country. It opened a consulate in the Kurdish region of Iraq in 2012. However, the relationship deteriorated as the Shia-dominated government of former Prime Minister Nuri al-Maliki (2006-2014) marginalized Sunnis. UAE officials welcomed the change of leadership in Iraq to Prime Minster Haydar Al Abadi in August 2014 and hosted him in December 2014. Still, the UAE and other GCC states did not conduct anti-Islamic State air operations in Iraq, possibly because of the Iraqi government's close relations with Tehran. Since mid-2017, Saudi Arabia and the UAE have improved ties to Iraq's Shia leaders to dilute Iranian influence there. The UAE and Germany jointly run a fund to pay for coalition efforts to reconstruct and stabilize areas of Iraq liberated from the Islamic State. The UAE donated $50 million to the fund in late 2016, and UAE companies have separately invested in housing and other projects in Iraq. The UAE-Germany cooperation reprises their joint cooperation in Iraq during 2003-2011, in which the UAE provided facilities for Germany to train Iraqi police and the UAE provided over $200 million for Iraq reconstruction, including for hospitals and medical treatment in the UAE for Iraqi children. In Yemen, another state roiled by the 2011 Arab uprisings, the UAE has intervened militarily since early 2015 with military personnel, armor, and airstrikes, in close partnership with Saudi Arabia, against the Zaydi Shia "Houthi" faction. The Saudi-led coalition asserts that the intervention was required to roll back the regional influence of Iran, which has supplied the Houthis with arms, including short-range ballistic and cruise missiles the Houthis have fired on the UAE and Saudi Arabia and their ships in the vital Bab el Mandeb Strait. In October 2016, the Houthis used anti-ship cruise missiles to damage a UAE Navy logistics ship in the Bab el Mandeb Strait. Since the UAE intervened, nearly 150 UAE soldiers have died. The Saudi and UAE-led intervention in Yemen has precipitated widespread international criticism of the two countries over the humanitarian effects of the war and other alleged abuses. In June 2017, UAE officials denied allegations by human rights organizations that UAE forces were maintaining a secret network of prisons in Yemen in which detainees were being severely abused. In early 2019, press investigations indicated that the UAE was arming some anti-Houthi militia commanders that were, and may still be, linked to Al Qaeda and/or the Islamic State. Some of these reports also indicate that some U.S. armor supplied to the UAE might have fallen into the hands of the Houthis. In an attempt to address critics, the UAE has highlighted the country's humanitarian aid to the people of Yemen in the context of the conflict. The UAE has provided $4 billion to Yemen, of which about $1.25 billion was provided in 2018, according to official UAE media. However, some of the total aid figure represents infrastructure investments, not grant aid. Criticism of the Arab coalition war effort has produced increasing congressional opposition to the U.S. logistical support provided to the effort, which included intelligence and aerial refueling under a cross-servicing agreement, as well as related arms sales and some direct U.S. military action to prevent Iranian weapons flows to the Houthis. In November 2018, the United States ended the refueling for coalition aircraft. But, fallout from the Kashoggi killing propelled additional congressional efforts to cease U.S. support for the coalition Yemen effort. For information on Congressional initiatives on the Yemen issues, see: CRS Report R45046, Congress and the War in Yemen: Oversight and Legislation 2015-2019 , by Jeremy M. Sharp and Christopher M. Blanchard. Separately, the UAE works closely with U.S. forces and with local Yemeni communities to counter the local faction of Al Qaeda—Al Qaeda in the Arabian Peninsula (AQAP). U.S. Special Operations Forces in Yemen reportedly worked with the UAE to defeat AQAP fighters at the port of Mukalla in April 2016, in the process killing the leader of the Yemeni branch of the Muslim Brotherhood. In January 2017, the Trump Administration authorized a raid in concert with some UAE special forces on allies of AQAP, an operation in which one U.S. soldier was killed. In August 2017, UAE and U.S. forces reportedly advised about 2,000 Yemen government forces conducting an operation against AQAP sanctuaries in Shabwa Province. Some experts assert that the UAE is promoting separatism in south Yemen and exercises significant control over governance in areas where UAE forces operate. In early March 2019, a UAE led operation, assisted by the United States, rescued an American hostage in Yemen, Danny Lavone Burch, who had been held by a gang with some ties to Al Qaeda. Congressional criticism of UAE operations in Yemen has not extended to the anti-AQAP mission. The UAE has been using its financial and military assets to be able to project power into Yemen as well as to counter Iranian influence more broadly. Another pillar of the UAE's effort to counter Iran has been to establish military bases and support friendly leaders and factions in several East African countries. During 2015, UAE forces deployed to Djibouti to support the intervention in Yemen, but in mid-2015 a UAE-Djibouti dispute over funding arrangements caused UAE (and Saudi) forces to begin using facilities in Eritrea to stage and to train pro-government Yemeni forces—a relationship that might violate a U.N. embargo on Eritrea. Perhaps to solidify its relations with Eritrea, the UAE helped broker a rapprochement between Eritrea and Ethiopia, which culminated in a trilateral (Ethiopia-Eritrea-UAE) summit in Abu Dhabi on July 24, 2018. The summit came one month after the UAE pledged to give Ethiopia $3 billion in investments. Yet, during a visit to the United States in late July 2018, the Prime Minister of Ethiopia, Abiy Ahmed, said he had rejected a UAE offer to build an Islamic center in Ethiopia and downplayed the UAE role in brokering the rapprochement. The UAE reportedly will be investing in energy infrastructure linking the two countries. Also in 2015, the UAE expanded its partnership with the fragile government in Somalia to open a new center at which a few hundred UAE special forces trained Somali commandos to counter terrorist groups, particularly Al Shabab. The UAE also established a base at the port of Berbera, in the breakaway region of Somaliland, triggering a legal complaint from the government of Somalia in February 2017. The 30-year basing agreement reportedly includes UAE training for Somaliland military and police forces. However, the rift with the government in Mogadishu led to a termination of the UAE training mission in Somalia in early 2018. In early July 2018, the European Union accused the UAE of "destabilizing" Somalia, referring to UAE pressure on Somalia to join the boycott of Qatar. The UAE has cooperated with the Saudi-led effort to persuade Sudan's leaders to realign with the GCC countries and forgo its erstwhile alliance with Iran. Sudanese troops have joined the Arab coalition effort in Yemen and Sudan's then-leader, Omar Hassan al-Bashir, visited the UAE in February 2017. In April 2019, Bashir was ousted by military colleagues in response to a popular uprising. In late April 2019, the UAE and Saudi Arabia pledged $3 billion in aid to Sudan, although the two were criticized for supplying funds to Sudan even though the military has said it will not transfer authority to civilian rule for two years. The UAE has assisted the U.S.-led mission to stabilize Afghanistan by allowing the use of its military facilities for U.S. operations there and by deploying a 250-person contingent of Presidential Guard forces, since 2003, in the restive south. During 2012-2014, the UAE deployed six F-16s for close air support missions there. The UAE also has donated several hundred million dollars of humanitarian and development aid to Afghanistan since the fall of the Taliban regime. The risks of the involvement were evident in January 2017 when five UAE diplomats were killed by a bomb during their visit to the governor's compound in Qandahar. The UAE Ambassador survived. In mid-December 2018, the UAE hosted meetings between Taliban representatives, U.S. officials, and officials from several regional stakeholder countries to discuss a possible political settlement in Afghanistan. Before the September 11, 2001, attacks on the United States, the UAE apparently did not perceive the Taliban movement as a major threat. The UAE was one of only three countries (Pakistan and Saudi Arabia were the others) that recognized the Taliban during 1996-2001 as the government of Afghanistan, even though the Taliban regime was harboring Al Qaeda leaders. The UAE has no formal diplomatic relations with Israel, but UAE troops did not participate militarily in any major Arab-Israeli war (two of which - 1948 and 1967 - occurred before the UAE was formed). Unlike Qatar and Oman, the UAE did not host multilateral Arab-Israeli working groups on regional issues during 1994-1998. In 2007, the UAE joined Saudi Arabia, Egypt, and Jordan in a "quartet" of Arab states to assist U.S. diplomacy on Israeli-Palestinian issues, and it attended the Annapolis summit on the issue that year. In recent years, Israel and the UAE have informally aligned against Iran and there are consistent reports of quiet diplomatic cooperation and security cooperation, including reported 2018 visits to Tel Aviv by UAE security officials. Israeli diplomats have attended multilateral meetings in the UAE, such as the January 2014 conference of the 144-country International Renewable Energy Agency (IRENA), attended by Israel's Minister of National Infrastructure, Energy, and Water. In November 2015, the UAE gave Israel permission to establish a diplomatic office in Abu Dhabi to facilitate Israel's participation in IRENA. The interactions indicate that the UAE has set aside its recriminations over an Israeli assassination of Hamas figure Mahmoud al-Mabhouh at a hotel in Dubai in 2010. There apparently are unspecified levels of Israel-UAE bilateral trade, even though the UAE formally claims it is enforcing the Arab League primary boycott of Israel. In 1994, the UAE joined with the other Gulf monarchies in ending enforcement of the Arab League's secondary and tertiary boycotts (boycotts of companies doing business with Israel and on companies that deal with companies that do business with Israel). In August 2018, the head of state-owned Dubai Ports World, which has ties with Israeli shipping company Zim Integrated Shipping Services Ltd. and other Israeli firms, visited Israel. The UAE has deferred to Saudi Arabia in formulating Arab or GCC proposals to resolve the Israeli-Palestinian dispute. And the UAE position on that issue aligns with other Arab states, for example in support of the Palestinian Authority (PA) bid for statehood recognition and opposition to the Trump Administration's 2018 recognition that Israel's capital is in Jerusalem and 2019 recognition of Israeli sovereignty on the Golan Heights. Yet, the government reportedly is poised to support a Trump Administration Israel-Palestinian peace plan that purportedly is far less favorable toward the Palestinians than were previous peace proposals. In line with UAE animosity toward Muslim Brotherhood-related movements, the UAE does not support Hamas but rather its rival, the Fatah faction of the Palestine Liberation Organization, which runs the West Palestinian Authority (PA) based on the West Bank. In June 2015, the UAE donated $12 million to help the Gaza victims of war with Israel, channeling the funds through Fatah, not Hamas. The UAE also hosts and financially backs senior PLO official Mohammad Dahlan, hoping to propel him to succeed PA President Mahmoud Abbas. According to the UAE government, the UAE has provided over $500 million to humanitarian projects for Palestinian refugees in the Palestinian territories and in Syria, sending the funds through the U.N. Relief and Works Agency (UNRWA). In April 2018, the UAE contributed $50 million to UNRWA to help it compensate for a shortfall in its operating funds caused by the Trump Administration cessation of funding to the agency. The UAE in the past funded a housing project in Rafah, in the Gaza Strip, called "Shaykh Khalifa City." The UAE asserts that it has provided billions of dollars in international aid through its government and through funds controlled by royal family members and other elites. Among initiatives outside the Near East and South Asia region are the following: The Abu Dhabi Fund for Development (ADFD), established in 1971, has distributed over $4 billion for more than 200 projects spanning 53 countries. The UAE provided $100 million for victims of the December 2004 tsunami in the Indian Ocean. During 2011-2012, UAE foundations responded to U.N. appeals for aid to the victims of a drought in East Africa and provided about $2 million for victims of conflict in Somalia. In October 2013, the UAE reopened a UAE embassy in Mogadishu, in part to facilitate the delivery of relief to Somalis. The UAE has donated for disaster relief and for health care facilities in the United States, including: $100 million to assist New Orleans after Hurricane Katrina; $150 million to Children's National Medical Center in Washington, DC; $5 million to the reconstruction of the new pediatric health care wing at St. John's Mercy Hospital in Joplin, MO, in the wake of the May 2011 tornado there; and $10 million to assist with the reconstruction and recovery efforts of communities affected by Hurricane Sandy in 2013. In 2012, Johns Hopkins officials unveiled the Sheikh Zayid Cardiovascular and Critical Care Tower, funded by a UAE donation. In December 2018, the UAE announced it would increase its contribution to the U.N. Central Emergency Relief Fund to $5 million in 2019, from $1.75 million provided in 2018. The UAE's ability to project power in the region is a product of many years of U.S.-UAE defense cooperation that includes U.S. arms sales and training, strategic planning, and joint exercises and operations. The UAE's armed forces are small—approximately 50,000 personnel—but they have participated in several U.S.-led military operations, including Somalia (1992), the Balkans (late 1990s), Afghanistan (since 2003), Libya (2011), and Syria (2014-2015). Some experts say the UAE has joined U.S.-led operations to further invest the United States in UAE security and increase UAE influence over U.S. policy. The UAE reportedly has also augmented its manpower by recruiting foreign nationals and hiring U.S. and other security experts to build militias and mercenary forces that supplement UAE national forces. The United States and UAE have established a "Defense Cooperation Framework" to develop joint strategic approaches to regional disputes and conflicts and to better integrate U.S. capabilities with those of the UAE. The Framework includes UAE development of a defense plan that will facilitate joint U.S.-UAE planning in case of attack on the UAE. In accordance with the Framework, the two countries have established a "Joint Military Dialogue" (JMD) to identify shared security objectives and consult on a wide range of strategic issues. The fourth U.S.-UAE JMD was help on April 11, 2019. The Framework builds on the July 25, 1994, bilateral Defense Cooperation Agreement (DCA), the text of which is classified. The DCA was accompanied by a separate "Status of Forces Agreement" (SOFA) giving U.S. military personnel in UAE certain legal immunities, but several incidents reportedly caused the UAE to void the SOFA and to agree with the United States to handle legal incidents on a "case-by-case basis." On May 15, 2017, Secretary of Defense James Mattis and Shaykh Mohammad bin Zayid confirmed that the United States and the UAE had concluded a new DCA with a 15-year duration. In accordance with the DCA The United States stations about 5,000 U.S. military personnel at several UAE facilities including Jebel Ali port (between Dubai and Abu Dhabi), Al Dhafra Air Base (near Abu Dhabi), and naval facilities at Fujairah. Jebel Ali, capable of handling aircraft carriers, is the U.S. Navy's busiest port of call. The U.S. forces in UAE support U.S. operations in Afghanistan, combat the Islamic State, deter Iran, try to intercept terrorists, and combat smuggling and illicit shipments of weaponry or proliferation-related equipment. The number of U.S. forces currently in UAE is much higher than the 800 U.S. personnel there prior to the 2003 U.S. intervention in Iraq. The United States stations combat and other aircraft. About 3,500 of the U.S. contingent are Air Force personnel deployed at Al Dhafra air base. The facility at first only hosted U.S. surveillance aircraft such as the U-2 and the KC-10 refueling aircraft, but the UAE later permitted the stationing of F-15s; the "Stealth" F-22 Raptor; and the Global Hawk and the AWACS (Airborne Warning and Control System). Dhafra is the only overseas base for F-22s. In April 2019, the United States deployed the F-35 combat aircraft to Al Dhafra – the first such U.S. deployment of that aircraft in the Middle East region. The United States trains UAE forces. About 600-800 UAE military personnel study and train in the United States each year, mostly through the Foreign Military Sales program, through which the UAE buys most of its U.S.-made arms. The quality of the UAE force has, by all accounts, benefitted substantially from the U.S. training. U.S. military officers say that UAE fighter pilots, operators of HAWK surface-to-air missile batteries, and special operations forces are highly proficient and have demonstrated their effectiveness in recent combat missions, particularly against AQAP in Yemen. Since 2000, the UAE has hosted a "Joint Air Warfare Center" (AWC) where UAE and U.S. forces conduct joint exercises on early warning, air and missile defense, and logistics. Since 2009, UAE Air Force personnel have participated in yearly Desert Falcon exercises at Nellis Air Force Base in Nevada. Within a broader GCC context, joint statements issued after a 2015 and a 2016 U.S.-GCC summit at Camp David announced a new U.S.-GCC strategic partnership in which the United States pledged to (1) facilitate U.S. arms transfers to the GCC states; (2) increase U.S.-GCC cooperation on maritime security, cybersecurity, and counterterrorism; (3) organize additional large-scale joint military exercises and U.S. training; (4) help realize a long-discussed concept of a Gulf-wide ballistic missile defense capability; and (5) U.S.-GCC military exercises and U.S. training for GCC special forces. U.S. officials assert that arms sales to the UAE enhance U.S. security by building up indigenous GCC capabilities and promoting interoperability. UAE representatives assert that the country would like to work out a mechanism with the United States under which requests for munitions and arms purchases could receive expedited U.S. consideration. Some options might include designating the UAE as a "Major Non-NATO Ally" (MNNA), or a mechanism UAE officials say they prefer: legislation that would declare the UAE a key U.S. defense partner. Two Gulf states—Kuwait and Bahrain—are designated as MNNAs. Yet, the United States' preference to work with the GCC as a bloc rather than country-by-country was enshrined in a December 16, 2013, Presidential Determination to allow defense sales to the GCC as a bloc. Some defense sales to the UAE might be contingent on the UAE's joining the Missile Technology Control Regime (MTCR), which UAE officials say they are considering trying to do. The UAE does not receive U.S. aid to purchase U.S. weaponry. On the other hand, congressional opposition to further U.S. support for UAE operations in Yemen could mean that U.S. arms sales to the UAE will halt or slow. Among major FMS programs with or potential sales to the UAE F-16 Program . In 2000, the UAE purchased 80 U.S. F-16 aircraft, equipped with the Advanced Medium Range Air to Air Missile (AMRAAM) and the High Speed Anti-Radiation Missile (HARM), at a value of about $8 billion. Congress did not block the sale, although some Members questioned the AMRAAM as an introduction of the weapon into the Gulf. In April 2013, the United States sold the UAE an additional 30 F-16s and associated "standoff" air-to-ground munitions, in conjunction with similar weapons sales to Israel and Saudi Arabia, which U.S. officials indicated were intended to signal resolve to Iran. The UAE also has about 60 French-made Mirage 2000 warplanes, and is reportedly considering buying French-made Rafales and the Boeing F/A-18. F-35 . UAE officials and industry sources say the country wants to buy two dozen of the advanced F-35 "Joint Strike Fighter," asserting that possessing the most sophisticated U.S. aircraft enhances interoperability with U.S. air operations. Even though Israel and the UAE are aligned on many regional policies, U.S. officials have said that the United States would not sell the aircraft to the UAE before Israel receives the weapon; delivery to Israel is expected to begin in late 2016. That apparently is an effort to enforce U.S. law that requires maintaining Israel's "Qualitative Military Edge" (QME) in the region. However, it was reported in November 2017 that the Trump Administration agreed to preliminary talks on future UAE procurement of the F-35. JDAMs and other Precision-Guided Munitions . The United States has sold the UAE precision-guided missiles for the F-16s, including 20 of the advanced ATM-84 SLAM-ER Telemetry missile and 5,000 GBU-39/B "bunker buster" bombs. (The sale of the SLAM-ER to UAE was the first sale of that weapon to a Gulf state.) In 2008, the United States sold the UAE an unspecified number of Join Direct Attack Munitions (JDAM) kits (which convert gravity bombs to precision-guided bombs) worth about $326 million. In 2011, the United States sold the UAE an additional 4,900 JDAM kits at an estimated value of $304 million. On several occasions in 2015, the United States sold the UAE precision-guided munitions (Guided Bomb Units—GBU-31s and GBU-12s) and resupplied it with JDAMs for use against the Islamic State and the Houthi rebellion in Yemen. However, some recent sales of such munitions have been held up by Congress in 2018 and 2019 over concerns about the humanitarian effects of the Yemen war. Apache Helicopters . On November 4, 2010, the Defense Security Cooperation Agency (DSCA) notified Congress of two potential sales, including a $5 billion sale of AH-64 Apache helicopters (30 helicopters, remanufactured to Block III configuration). Missiles. The UAE reportedly possesses a small number (six) of Scud -B ballistic missiles obtained from a non-U.S. suppliers . The United States does not supply or assist the UAE with ballistic missile technology, in part because the country is not an adherent of the Missile Technology Control Regime (MTCR). UAE officials say the country is considering trying to join that convention. Drone s. At a UAE defense show in 2013, the UAE agreed to a commercial sale, worth about $200 million, for Predator X-P unmanned aerial vehicles (UAVs), although they are unarmed and for surveillance only. The system arrived in 2017. Were the UAE to join the MTCR, it might be eligible to buy a U.S.-made armed drone, such as the "Guardian," the sale of which to non-MTCR countries is precluded because it is an MTCR "Category One" system. The UAE also reportedly has some Chinese-made UAVs. High Mobility Artillery Rocket System (HIMARS) . In September 2006, the United States sold UAE High Mobility Artillery Rocket Systems (HIMARS) and Army Tactical Missile Systems (ATACMs), valued at about $750 million. Tanks . UAE forces still use primarily 380 French-made Leclerc tanks. A long-standing U.S. objective—and a driving force behind the formation of the "U.S.-GCC Strategic Cooperation Forum" formed in March 2012—has been to organize a coordinated Gulf-wide ballistic missile defense (BMD) network. This objective has taken on greater urgency in the United States and in the Gulf as Iran's missile capability has advanced and Iran has supplied short-range missiles to the Houthis and other allies. The UAE hosts an Integrated Air and Missile Defense (IAMD) Center—a training facility to enhance intra-GCC and U.S.-GCC missile defense cooperation. A U.S. sale to the UAE of the Patriot Advanced Capability 3 (PAC-3) missile defense system, with an estimated value of $9 billion value, was announced in December 2007. In 2008, the United States sold the UAE vehicle-mounted "Stinger" antiaircraft systems with an estimated value of $737 million. In 2016, the Administration notified Congress of a potential sale of "Large Aircraft Infrared Countermeasures" to protect UAE head of state aircraft against missile threats. On May 11, 2017, the Administration notified a potential sale to the UAE of 60 PAC-3 and 100 Patriot Guidance Enhanced Missile-Tactical (GEM-T) missiles, with a total estimated value of about $2 billion. Because these are defensive systems, the sale was not affected by the June 26, 2017, commitment (rescinded in early 2018) by then-Senate Foreign Relations Committee Chairman Senator Bob Corker to withhold informal clearances on sales of "lethal military equipment" to the GCC states until there is a path to the resolution of the intra-GCC dispute. THAAD. The UAE was the first GCC state to order the Terminal High Altitude Air Defense System (THAAD), the first sale ever of that sophisticated missile defense system, with an estimated value of about $7 billion. The delivery and training process for the UAE's THAAD system took place in late 2015. Despite expressing no concerns about any interruption or diminution of its defense ties to the United States, the UAE has sought to diversify its defense partnerships. In 2004, the UAE joined NATO's "Istanbul Cooperation Initiative," later gaining "observer" status in NATO. In 2011, the UAE sent an Ambassador to NATO under that organization's revised alliance policy. In 2017, NATO established a liaison office in Abu Dhabi under the auspices of the embassy of Denmark. Since well before the formation of the anti-Islamic State coalition, the UAE has been hosting other countries' forces. In January 2008 the UAE and France signed an agreement to allow a French military presence in UAE. The facilities used—collectively termed Camp De La Paix ("Peace Camp")—were inaugurated during a French presidential visit in May 2009. It includes a 900-foot section of the Zayid Port for use by the French navy; an installation at Dhafra Air Base used by France's air force; and a barracks at an Abu Dhabi military camp that houses about 400 French military personnel. India's Prime Minister, Narendra Modi, visited the UAE in August 2015, the first such visit by an Indian leader since 1981. The visit included a strategic component in light of India's naval exercises with GCC countries in recent years. Crown Prince Mohammad bin Zayid made a reciprocal visit to India in January 2017, during which the two countries signed a "Comprehensive Strategic Partnership Agreement." The UAE relationship with Russia has attracted significant attention. In February 2017, press reports indicated that the UAE and Russia might jointly develop a combat aircraft based on the Soviet-era MiG-29. The collaboration—with a partner that is acting against the UAE's interests in Syria and other parts of the region—appeared as an acknowledgment by the UAE of Russia's growing role in the region. The UAE might also be attempting to engage Russia in defense cooperation in order to perhaps try to steer Russian policy in Syria or enlist Russian cooperation in settling regional conflicts. Significant differences between the UAE and United States emerged in 2015 over apparent purchases of weapons by the UAE's Al Mutlaq Technology Company of weapons from North Korea. The North Korean supplier is said to be Korea Mining Development Trading Corporation (Komid), which has been sanctioned by the United States for its involvement in North Korean strategic programs. The UAE cooperates with U.S. counterterrorism and counterproliferation policies in the region, not only through operations against terrorist groups but also in seeking to preventing the movement of terrorists, pirates, human traffickers, and proliferation-related technology through UAE borders and waters. U.S. programs, which have sometimes included providing small amounts of counterterrorism assistance, have helped build the UAE's capacity to enforce its borders and financial controls. In FY2015, about $400,000 in DOD funds were provided to the UAE to assist its counternarcotics capability, and about $300,000 in similar funding was provided in FY2016. In FY2015, about $260,000 in State Department funds were provided to the UAE to build its capacity to counter terrorism financing (see below). About $310,000 in such funding was provided in FY2016. During the mid-1990s, some Al Qaeda activists reportedly were able to move through the UAE, and two of the September 11, 2001, hijackers were UAE nationals who reportedly used UAE-based financial networks. Since then, State Department reports on terrorism have credited the UAE with making significant efforts against terrorism and terrorism financing, and with continuing to foil potential terrorist attacks within the UAE. UAE authorities have arrested and prosecuted Al Qaeda and Islamic State operatives; denounced terror attacks; improved border security; instituted programs to counter violent extremism; instituted laws to block suspect financial transactions; criminalized use of the internet by terrorist groups; and strengthened its bureaucracy and legal framework to combat terrorism. Human rights groups allege that UAE counterterrorism law is often used against domestic political dissidents. In 2014, the government, with FNC concurrence, enacted a revised counterterrorism law that makes it easier to prosecute, and increases penalties for, planning acts of terrorism, and authorizes the UAE cabinet to set up lists of designated terrorist organizations and persons. The UAE cochairs the anti-Islamic State-related "Coalition Communications Working Group" along with the United States and Britain. At the December 2014 GCC summit, the leaders announced the creation of a regional police force to be headquartered in Abu Dhabi. The UAE has also joined the Saudi-initiated GCC "Security Pact" that requires increased information-sharing and cooperation among the GCC states on internal security threats. Among notable UAE counterterrorism actions, in October 2010, UAE authorities assisted in foiling an Al Qaeda in the Arabian Peninsula plot to send bombs to the United States. In December 2012, the UAE, working with Saudi Arabia, arrested members of an alleged terrorist cell plotting attacks in the United States. In April 2013, UAE authorities arrested seven non-UAE Arab nationals allegedly affiliated with Al Qaeda. In 2014, the UAE tried nine people on charges of supporting the Al Nusrah Front (renamed Front for the Conquest of Syria), an Al Qaeda-linked faction of Syrian rebels that is named by the United States as a Foreign Terrorist Organization (FTO). UAE authorities failed to prevent a December 1, 2014, killing of an American teacher by a 38-year-old Emirati woman who allegedly had visited extremist websites, although they defused a bomb she planted outside the home of an American doctor. In 2015, the UAE arrested and prosecuted, or deported, numerous individuals who allegedly planned to join the Islamic State or commit terrorism in the UAE. In March 2016, UAE courts convicted 30 out of 41 individuals (38 of whom were UAE citizens) belonging to a group called Shabab al Manara of plotting terrorist attacks in the UAE. Facilities and assets of the group were closed or seized. Yet, the United States and the UAE sometimes differ on whether some groups are terrorist organizations. For example, the 85 groups that the UAE government designates as terrorist organizations include some U.S.- and Europe-based groups that represent Muslims in those societies and which neither the United States nor any European government accuses of terrorism. These groups include the U.S.-based Muslim American Society and Council on American-Islamic Relations (CAIR); the Muslim Association of Sweden; the Federation of Islamic Organizations in Europe; and the U.K.-based Islamic Relief. The United States Embassy in Abu Dhabi questioned the UAE government about why it designated these groups. The UAE also identifies as terrorist groups several organizations that the United States has not designated as terrorist groups, including the Houthis in Yemen and the Afghan Taliban. The UAE, as noted above, also considers the Muslim Brotherhood as a terrorist group; the Trump Administration reportedly considered designating it as a foreign terrorist organization (FTO). Antit errorism Financing and Money Laundering (A ML/CFT ) . The UAE Central Bank's Financial Intelligence Unit is credited in State Department terrorism reports with providing training programs to UAE financial institutions on money laundering and terrorism financing, and making mandatory the registration of informal financial transmittal networks ( hawala s ). In September 2012, the FBI Legal Attache established a suboffice at the U.S. consulate in Dubai to assist with joint efforts against terrorism and terrorism financing. In June 2014 the UAE set up a financial task force to better prevent use of UAE financial institutions by terrorist organizations. In October 2014, the country adopted a law (Federal Law No. 9) to strengthen a 2002 anti-money-laundering law. On October 29, 2018, the government announced it replaced a 2002 anti-money-laundering law with a new law that raises the country's anti-money-laundering and counter-terrorism financing rules to international standards. The country is a member of the Middle East and North Africa Financial Actions Task Force (MENAFATF), a FATF-style regional body, and it chairs the MENAFATF's Training and Typologies Working Group. The UAE is a participant in the Counter-Islamic State Finance Group chaired by Italy, Saudi Arabia, and the United States. In May 2017, the UAE joined the U.S.-GCC Terrorist Financing Targeting Center based in Riyadh. In October 2017, the members of the center designated as terrorists several AQAP and Islamic State-Yemen individuals and entities. Countering Violent Extremism . In 2011, the UAE founded the Global Counterterrorism Forum (GCTF) along with the United States and Turkey. In December 2012, during a meeting of the GCTF, the UAE-based "International Center of Excellence for Countering Violent Extremism," known as Hedayah ("guidance"), was inaugurated. The government partners with the U.S. government to run the Sawab Center, an online counter-Islamic State messaging hub. The center, which has an annual budget of about $6 million and a staff of 14, is an institution for training, dialogue, collaboration, and research to counter violent extremism. Its priority is to work to prevent educational institutions from becoming breeding grounds for violent extremism. It also promotes information sharing so that police organizations around the world can receive information from family members who report on relatives who have become radicalized. Several UAE-based think tanks, including the Emirates Center for Strategic Studies and Research (ECSSR), the Emirates Policy Center, the TRENDS Institute, the Tabah Foundation, and the Future Institute for Advanced Research and Statuies, also conducted seminars on confronting terrorism and violent extremism. Transfers from Guantanamo . The UAE has cooperated with U.S. efforts to reduce the detainee population at the U.S. prison facility in Guantanamo Bay, Cuba. In November 2015, the Department of Defense transferred five Yemeni detainees from the facility to the UAE. In August 2016, another 15 Guantanamo detainees (12 Yemenis and 3 Afghans) were transferred to the UAE, the biggest single Guantanamo transfer to date. The day before it left office in January 2017, the Obama Administration transferred another three to the UAE. The UAE has signed on to several U.S. efforts to prevent proliferation and terrorism. These include the Container Security Initiative, aimed at screening U.S.-bound containerized cargo transiting Dubai ports, and the UAE has cooperated with all U.S. measures designed to protect aircraft bound for the United States. Several U.S. Customs and Border Protection officers, colocated with the Dubai Customs Intelligence Unit at Port Rashid in Dubai, inspect U.S.-bound containers, many of them apparently originating in Iran. The UAE is also a party to the Proliferation Security Initiative, the Megaports Initiative designed to prevent terrorists from using major ports to ship illicit material, and the Customs-Trade Partnership against Terrorism. In 2013, a "preclearance facility" was established at the Abu Dhabi International Airport for travelers boarding direct flights to the United States. The UAE government supports the Department of Homeland Security's programs to secure any UAE-to-U.S. flights, including collecting passenger information and employing retina-screening systems. The UAE effort to prevent the reexport of advanced technology, particularly to Iran, has improved considerably since 2010. As a GCC member, the UAE participates in the U.S.-GCC Counter-proliferation Workshop. Taking advantage of geographic proximity and the presence of many Iranian firms in Dubai emirate, numerous Iranian entities involved in Iran's weapons and technology programs maintained offices in Dubai. In connection with revelations of illicit sales of nuclear technology to Iran, Libya, and North Korea by Pakistan's nuclear scientist A.Q. Khan, Dubai was named as a key transfer point for Khan's shipments of nuclear components. Two Dubai-based companies, SMB Computers and Gulf Technical Industries, were apparently involved in transshipping components. In 2004, the United States sanctioned a UAE firm, Elmstone Service and Trading FZE, for selling weapons-related technology to Iran, under the Iran-Syria Non-Proliferation Act ( P.L. 106-178 ). In 2006, the Commerce Department's Bureau of Industry and Security (BIS) imposed a licensing requirement on U.S. exports to Mayrow General Trading Company and related UAE-based companies after Mayrow allegedly transshipped devices used to make improvised explosive devices (IED) in Iraq and Afghanistan. In February 2007 the Bush Administration threatened to characterize the UAE as a "Destination of Diversion Control" and to restrict the export of certain technologies to it. A June 2010 Iran sanctions law, the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA, P.L. 111-195 ), formally authorizes countries to be designated as Destinations of Diversion Control and subject to U.S. sanctions. The UAE avoided any such designation by strengthening its export control regime, including a September 2007 law, enacted with FNC concurrence, that tightened export controls. UAE authorities used that law to shut down 40 foreign and UAE firms allegedly involved in dual use exports to Iran and other countries. In September 2012 the UAE (and Bahrain) impounded shipments to Iran of items that Iran could use for its nuclear program. The issue of leakage of technology has sometimes caused U.S. criticism or questioning of UAE investment deals. In December 2008, some Members of Congress called for a review by the interagency Committee on Foreign Investment in the United States (CFIUS) of a proposed joint venture between Advanced Micro Devices and Advanced Technology Investment Co. of Abu Dhabi for the potential for technology transfers. In February 2006, CFIUS approved the takeover by the Dubai-owned Dubai Ports World company of a British firm that manages six U.S. port facilities. Congress, concerned that the takeover might weaken U.S. port security, opposed it in P.L. 109-234 , causing the company to divest assets involved in U.S. port operations. The UAE announced in 2008 that it would acquire its first nuclear power reactors to satisfy projected increases in domestic electricity demand. As a condition of receiving U.S. nuclear technology, the United States and the UAE reached an agreement that commits the UAE officials to strict standards that ensure that its nuclear program can only be used for peaceful purposes. Among those commitments is to refrain from domestic uranium enrichment or reprocessing spent nuclear reactor fuel—both processes could produce fissile material for nuclear weapons. The Obama Administration signed an agreement for the United States to assist the program, subject to conditions specified in Section 123 of the Atomic Energy Act of 1954 [42 U.S.C. 2153(b)], on May 21, 2009 (and submitted to Congress that day). Some in Congress expressed concerns about the potential for leakage of technology to Iran as well as the potential for regional proliferation of nuclear technology, but several congressional resolutions approving the agreement ( S.J.Res. 18 and H.J.Res. 60 ) were introduced, as was one disapproving ( H.J.Res. 55 ). No measure blocking the agreement was enacted within 90 days of the submission of the agreement to Congress, and the "1-2-3 Agreement" entered into force on December 17, 2009. The International Atomic Energy Agency announced in December 2011 that a group of experts that reviewed the UAE's regulatory framework for the program found "noted good practices" and provided suggestions to the Federal Authority for Nuclear Regulation, the UAE's nuclear regulatory authority. Still, reflecting the fact that a Saudi nuclear program might not be bound by the same restrictions that the UAE committed to, UAE officials reportedly told U.S. officials in October 2015 that they no longer consider themselves bound by the pledge that the country would not enrich uranium. A number of U.S. and European firms have secured administrative and financial advisory contracts with the program. In January 2010, the Emirates Nuclear Energy Corporation (ENEC), the institution that is administering the program, announced that it had chosen the Korea Electric Power Corporation (KEPCO of South Korea) to construct the first of four APR1400 nuclear reactors that would sell electricity to the Abu Dhabi Water and Electricity Authority. The first plant is undergoing preoperational testing. The other three are to be operational by 2020. The United States gives the UAE small amounts of assistance to help safeguard its nuclear program and prevent illicit exports of technology from it. For FY2015, the Department of Energy provided the country with about $370,000 for such purposes, and for FY2016, about $220,000 was provided for those programs. On other technology issues, in July 2014 the UAE announced it will form a "UAE Space Agency" that, by 2021, is to launch an unmanned spaceship that will probe Mars. The government plans to send its first astronaut to the International Space Station in April 2019. The UAE, a member of the World Trade Organization (WTO), has developed a free market economy, but its financial institutions are weakly regulated. As have the other GCC states that have long depended on exports of hydrocarbons, the UAE has announced plans and policies ("Vision 2021") to try to further diversify its economy to a "post-oil" era. Dubai emirate, in particular, has long pursued an economic strategy based on attracting investors to construct luxurious and sometimes futuristic projects that provide jobs and attract tourism and publicity. The country is also accepting investment by China under that country's "Belt and Road Initiative" (BRI) intended to better connect China economically to other parts of Asia, Central Asia, the Middle East, and Africa.in April 2019, the UAE and China signed deals worth $3.4 billion, most of which will be invested to store and ship Chinese products from the UAE port of Jebel Ali. To help it weather the effect of the sharp drop in oil prices since mid-2014, the government cut some subsidies and raised capital on international markets, including an April 2016 bond offering of $5 billion and an October 2017 bond offering of about $10 billion. The government budget was only slightly in deficit 2017 and 2018, and, coupled with the bond offerings, the UAE has been able to avoid drawing down its $600 billion in various sovereign wealth funds overseen by the Emirates Investment Authority (EIA). The key factor in the UAE's wealth is that it exports large amounts of crude oil while having a small population that receives benefits and services. The UAE exports nearly as much oil as Iraq, while its citizen population is a small fraction of that of Iraq. Abu Dhabi has 80% of the federation's proven oil reserves of about 100 billion barrels, enough for over 100 years of exports at the current production rate of about 2.9 million barrels per day (mbd). Of that, over 2.2 mbd are exported, and the UAE has as much as 500,000 bpd of spare capacity. UAE representatives indicated in late October 2018 that they might increase production to over 3 mbd, but the subsequent sharp drop in world oil prices and OPEC agreement in November 2018 to cut production has likely forestalled any UAE production increase. The United States imports negligible amounts of UAE crude oil; the largest share of UAE oil goes to Japan and China. The UAE has vast quantities of natural gas but consumes more than it produces. It has entered into an arrangement (Dolphin Energy) with neighboring countries under which a pipeline carries natural gas from the large gas exporter, Qatar, to the UAE and on to Oman. However, the political differences with Qatar have contributed to UAE evaluation of renewable and other alternatives to relying on Qatar-supplied natural gas. The UAE is trying to secure its oil export routes against any threat by Iran to close the strategic Strait of Hormuz, through which the UAE and other major oil exporters transport their oil exports. In July 2012, the UAE loaded its first tanker of oil following completion of the Abu Dhabi Crude Oil Pipeline (ADCOP) which terminates in the emirate of Fujairah, on the Gulf of Oman. The line, which cost $3 billion, can transport 1.5 million barrels per day of crude oil—about half of UAE production. The UAE is planning a large refinery near that terminal, and possibly a second oil pipeline, to secure its oil exports and value-added petroleum products. The UAE government is also attempting to plan for a time when the developed world is no longer reliant on oil imports. The government has set a target of using 21% renewable energy sources by 2021. It has funded "Masdar City"—a planned city, the first phase of which was completed in 2015, that relies only on renewable energy sources and features driverless taxis. U.S. trade with the UAE is a significant issue because the UAE is the largest market for U.S. exports to the Middle East. Over 1,000 U.S. companies have offices there and there are over 60,000 Americans working in UAE. U.S. exports to the UAE in 2017 totaled about $20 billion, about 10% less than in 2016. U.S. imports from UAE for 2017 totaled about $4.3 billion, about 20% higher than in 2016. U.S. exports to the UAE were roughly the same as for 2017 (about $20 billion), but imports were somewhat higher ($5 billion, as compared to $4.2 billion in 2017). Goods sold to UAE are mostly commercial aircraft, industrial machinery and materials, and other high-value items. On November 15, 2004, the Bush Administration notified Congress it had begun negotiating a free trade agreement (FTA) with the UAE. Several rounds of talks were held prior to the June 2007 expiration of Administration "trade promotion authority." The FTA talks were later replaced by a U.S.-UAE "Economic Policy Dialogue," between major U.S. and UAE economic agencies. The dialogue, consisting of two meetings per year, began in late 2011 and also included discussion of reform of UAE export controls. In addition, as part of the GCC, the UAE negotiated with the United States a September 2012 "GCC-U.S. Framework Agreement on Trade, Economic, Investment, and Technical Cooperation"—a GCC-wide trade and investment framework agreement (TIFA). The agreement was negotiated by the U.S. Trade Representative (USTR). As noted, because of the UAE's relative wealth, it receives only very small amounts of U.S. foreign assistance. Amounts provided for counternarcotics, counterterrorism financing, and nuclear security are broken down in the sections above. For FY2016, total U.S. aid to the UAE was about $1.15 million. For FY2015, U.S. assistance to the UAE totaled about $840,000. In 2015, several U.S. airlines asserted that two UAE airlines, Emirates Air (Dubai-based) and Etihad Air (Abu Dhabi-based), as well as Qatar Airways, had an unfair competitive advantage because of alleged receipt of subsidies from their respective governments. The U.S. airlines asserted that the "Open Skies Agreement" that the UAE and Qatar have with the United States should be renegotiated so as to limit the access of the three Gulf-based airlines to U.S. routes. The airlines assert they are not subsidized and instead create substantial numbers of jobs for American workers building and serving their aircraft and operations in the United States. UAE officials assert that the country will not agree to renegotiate the Open Skies Agreement. The Obama Administration declined to renegotiate the agreement and President Trump, following a February 2017 meeting with U.S. airline executives, did not indicate any change to that stance.
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The United Arab Emirates (UAE) is a significant U.S. partner in Gulf security, helping to address multiple regional threats by hosting about 5,000 U.S. military personnel at UAE military facilities under a bilateral defense cooperation agreement (DCA). The UAE is a significant buyer of U.S. military equipment, including sophisticated missile defenses, and it reportedly wants to buy the F-35 combat aircraft. The alliance is expected to continue after UAE President Shaykh Khalifa bin Zayid Al Nuhayyan, who suffered an incapacitating stroke in January 2014, is succeeded by his younger brother and de-facto UAE leader Shaykh Muhammad bin Zayid Al Nuhayyan. Advised and armed by the United States, the UAE military has become sufficiently capable that the country is able to, and is, asserting itself in the region, including militarily. The UAE is part of a Saudi-led military effort to pressure the Iran-backed Zaidi Shia Houthi rebels in Yemen, an effort to which the United States provides logistical support but which has produced criticism over the effects of the war on Yemen's civilians. UAE forces, alongside U.S. special operations forces, also are combatting Al Qaeda's affiliate in that country. UAE forces have built up several bases in East African countries to train allied forces and facilitate UAE operations in Yemen. The UAE is supporting an anti-Islamist commander based in eastern Libya, Khalifa Hafter, who in April 2019 launched an assault to capture Tripoli from a U.N.-backed government based there. The UAE has sought to counteract criticism by expanding its long-standing donations of assistance to regional and international organizations and economically strapped countries. The UAE's opposition to Muslim Brotherhood-linked regional organizations as regional and domestic threats has driven UAE policy toward Egypt, Syria, the Palestinian territories, and other countries. The UAE's stance has contributed to a major rift with Qatar, another member of the Gulf Cooperation Council alliance (GCC: Saudi Arabia, Kuwait, UAE, Bahrain, Qatar, and Oman), but which supports Brotherhood-related groups as Islamists willing to work within established political processes. In June 2017, the UAE joined Saudi Arabia in isolating Qatar until it adopts policies closer to those of the three GCC states on the Brotherhood and other issues, including on Iran, where the UAE and the Trump Administration share a policy of strongly pressuring Iran economically and politically. U.S. mediation efforts have failed to resolve the intra-GCC rift, to date. The October 2018 killing by Saudi agents of a U.S.-based Saudi journalist at the Saudi consulate in Istanbul has added to criticism of UAE leaders for their close strategic alliance with Saudi Arabia's Crown Prince Mohammad bin Salman Al Saud. The UAE's relatively open borders and economy have won praise from advocates of expanded freedoms in the Middle East. The UAE is considered among the wealthiest countries in the world, in part because of the small population that requires services, and the wealth has helped the government maintain popular support. In 2006, the government established a limited voting process for half of the 40 seats in its quasi-legislative body, the Federal National Council (FNC). The most recent such vote was held in October 2015, and resulted in the selection of a woman as speaker of the FNC. However, the country remains under the control of a small circle of leaders. And, since the Arab Spring uprisings, the government has become more wary of the potential for regional conflicts to affect domestic stability and has suppressed domestic opponents. The country sought to showcase its continued commitment to pluralism by hosting a visit by Pope Francis in February 2019. In part to cope with the effects of reduced prices for crude oil during 2014-2018, the government has created new ministries tasked with formulating economic and social strategies that, among other objectives, can attract the support of the country's youth. Any U.S. assistance to the UAE has been very small in dollar amounts and intended mainly to qualify the UAE for inclusion in training and other programs that benefit UAE security.
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A growing number of Americans report that they use marijuana. As more states decriminalize the use of marijuana, the question of what impact marijuana usage has on the risk of a driver being involved in a motor vehicle crash has become more pertinent. In a survey, the majority of state highway safety offices rated drugged driving an issue at least as important as driving while impaired by alcohol. When faced with the issue of driver impairment due to marijuana, some stakeholders tend to approach the issue using the analogy of driver impairment due to alcohol. However, there are important differences between the two substances. The fact that alcohol reduces a user's ability to think clearly and to perform physical tasks has been known for decades. Extensive research has established correlations between the extent of alcohol consumption and impairment, including drivers' reaction times. Much less research has been done on marijuana. Marijuana is a more complex substance than alcohol. It is absorbed in the body differently from alcohol; it affects the body in different ways from alcohol; tests for its presence in the body produce more complicated results than tests for the presence of alcohol; and correlating its effects with its levels in the body is much more complicated than for alcohol. That marijuana usage increases a driver's risk of crashing is not clearly established. Studies of marijuana's impact on a driver's performance have thus far found that, while marijuana usage can measurably affect a driver's performance in a laboratory setting, that effect may not translate into an increased likelihood of the driver being involved in a motor vehicle crash in a real-world setting, where many other variables affect the risk of a crash. Some studies of actual crashes have estimated a small increase in the risk of crash involvement as a result of marijuana usage, while others have estimated little or no increase in the likelihood of a crash from using marijuana. This CRS report addresses various aspects of the issue of marijuana-impaired driving, including patterns of marijuana use, the relationship and detection of marijuana use and driver impairment, and related state law and law enforcement challenges. The report also references the congressionally required July 2017 report by the Department of Transportation's National Highway Traffic Safety Administration (NHTSA), Marijuana-Impaired Driving: A Report to Congress (hereinafter referred to as NHTSA's 2017 Marijuana-Impaired Driving Report to Congress), as well as other studies and research. Marijuana is a variety of the Cannabis sativa plant, and contains hundreds of chemical compounds. Two significant compounds found in marijuana are tetrahydrocannabinol (THC), the primary psychoactive compound, and cannabidiol (CBD); CBD is being tested for medicinal purposes, and is not itself psychoactive. Marijuana use has been recorded for millennia. In the 20 th century, the sale, possession, and use of marijuana were made illegal in most countries, including the United States. In recent years, however, the trend appears to be moving toward acceptance of marijuana usage. In public opinion polls, the percentage of Americans favoring legalization of marijuana has increased significantly. As of May 2019 33 states and the District of Columbia have enacted laws legalizing marijuana use under certain conditions, generally for medicinal purposes. Since Colorado and Washington State legalized recreational marijuana in 2012, the number of states in which recreational use of marijuana is permitted has grown to 10, plus the District of Columbia. These jurisdictions are home to one-quarter of the U.S. population. In addition to states that have legalized recreational marijuana use, another 23 states and Puerto Rico allow marijuana to be used for treating medical conditions ("medical marijuana"). Several other states are considering legalizing recreational use of marijuana. Since 2002, the Substance Abuse and Mental Health Services Administration in the U.S. Department of Health and Human Services has conducted an annual, nationally representative survey of substance use among individuals ages 12 and older. The percentage of individuals age 18 and older who self-report marijuana use in the previous month has grown slowly but steadily since 2008. Self-reported use is highest among young adults (ages 18-25) compared to all other age groups; it rose from 16.6% to 22.1% between 2008 and 2017. Self-reported use among adults age 26 and older rose from 4.2% to 7.9% over the same period. This study does not break out usage patterns by state, but other studies have found that reported usage has increased in virtually all states, both in those that have loosened restrictions on marijuana usage and those that have not. Thus, the impact of a state's treatment of marijuana on the extent of marijuana usage is not clear. Some observers have speculated that states' loosening of restrictions on marijuana usage might lead to increased usage. But the fact that usage by adults appears to be increasing in both states that have and those that have not loosened restrictions suggests that other factors may also be involved. NHTSA has sponsored a periodic roadside survey of alcohol use among drivers for decades. The last two surveys (2007 and 2013-2014) also looked at drug use. In the 2013-2014 survey, 12.7% of drivers in the nighttime sample tested positive for THC, up from 8.7% in the 2007 survey. NHTSA did not report concentrations of THC and did not attempt to evaluate impairment. The data do not permit state-level comparisons. Driving is among the most dangerous activities the average person engages in. It involves piloting a multiton vehicle at relatively high speeds, usually surrounded by many other such vehicles, and often bicyclists and pedestrians as well. A moment's inattention can, but usually does not, result in a crash. Crashes are usually not serious: the vast majority of crashes result only in damage to the vehicles involved. But in a significant percentage of crashes, one or more people are injured (29.3%), and in a fraction of crashes, people die (0.5%). Because of the potential danger to the public posed by drivers, all 50 states, the District of Columbia, and Puerto Rico have laws barring driving while impaired. Impairment involves driving performance that is degraded from its "normal" level by some cause. Many things can impair a driver's performance including alcohol, other drugs, fatigue, distraction, and emotional states such as fear or anger. Some state laws against impaired driving require that the state prove that a driver's impairment was caused by the substance or behavior at issue. Other state laws, known as per se laws, provide that a driver is automatically guilty of driving while impaired if specified levels of a potentially impairing substance are found in his or her body (e.g., blood alcohol content (BAC) of .08% or higher, or, in some states, THC in the blood; see Table 1 ). Currently, detecting marijuana impairment through a standardized test is more complicated than detecting alcohol impairment. Evaluating impairment due to alcohol is relatively straightforward. Alcohol is a central nervous system depressant, the effects of which have been extensively observed and studied for a century. It is a liquid that enters the bloodstream quickly and is metabolized (converted into other substances) by the body fairly quickly. Alcohol in the body can be measured in a person's breath, blood, or urine. A person's BAC peaks within an hour after drinking, and declines gradually and linearly after that. The degree of impairment at various BAC levels is fairly well-established, and many studies have established that a driver's risk of being involved in a crash increases as the driver's BAC level increases. In the United States, congressional encouragement has led every state to legislate that a driver whose BAC is .08% or higher is too impaired to drive legally. However, studies indicate there is some degree of impairment at far lower levels of BAC. In several European countries, driving with a BAC of .05% or higher is prohibited, and the State of Utah recently lowered its per se impaired BAC level to .05%. In the United States, commercial truck drivers are barred from performing safety-sensitive functions (such as driving) at a BAC of .04%. Relatively simple tests, such as breath analysis conducted by a police officer at the roadside or analysis of blood or urine samples taken in a clinic, can determine whether an individual's BAC exceeds the legal threshold. Since every state has a law prohibiting driving with a specific BAC level, such tests can be presented as evidence of impairment in court. Detecting impairment due to use of marijuana is more difficult. The body metabolizes marijuana differently from alcohol. The level of THC (the psychoactive ingredient of marijuana) in the body drops quickly within an hour after usage, yet traces of THC (nonpsychoactive metabolites) can still be found in the body weeks after usage of marijuana. There is as yet no scientifically demonstrated correlation between levels of THC and degrees of impairment of driver performance, and epidemiological studies disagree as to whether marijuana use by a driver results in increased crash risk. Relatively few studies have been done of the effect of marijuana use on driver performance. This is due, in part, to the requirements that must be met to use marijuana in studies due to its status as a controlled substance under federal law and many state laws. Another factor complicating studies of marijuana's effects on drivers is that the potency of THC in marijuana (i.e., the concentration of THC) can vary from one plant to another. The marijuana produced by the only approved source of marijuana for federally funded research is considered by some researchers to be low quality (potency). Also, the way in which marijuana is processed can affect the potency of the product, and the way the user chooses to ingest marijuana may affect the level of THC in the body. The lack of correlation between both marijuana consumption and the level of THC in a person's system and THC levels and driver impairment reduces the usefulness of rule-of-thumb guides of impairment. In contrast, many drivers use rules-of-thumb to guide their alcohol consumption. While emphasizing that even low levels of alcohol consumption can cause drivers to be impaired, tables published on the internet suggest that two drinks may place a 120-pound female in breach of the 0.08% BAC threshold and leave a 160-pound male with "driving skills significantly affected." The National Transportation Safety Board has advised that "about 2 alcoholic drinks" within an hour will cause a 160-pound male to experience decline in visual functions and in the ability to perform two tasks at the same time. Based on current knowledge and enforcement capabilities, it is not possible to articulate a similarly simple level or rate of marijuana consumption and a corresponding effect on driving ability. To date, results from studies that have examined the association between marijuana use and crash risk have been inconsistent. As described in the 2017 NHTSA report to Congress, one study estimated the increased crash risk from marijuana usage at 1.83 times that of an unimpaired driver, while another study found no association between risk of being involved in a crash and marijuana use. Other studies have estimated the increased crash risk for drivers testing positive for marijuana at between zero and three times that for unimpaired drivers, roughly comparable to the increased crash risk of having a blood alcohol content of between .01% and .05%, well below the legal per se impaired level of .08 BAC. For purposes of comparison, a driver with a BAC of .08% is considered to be five to 20 times more likely to be involved in a crash than an unimpaired driver. In NHTSA's 2017 Marijuana-Impaired Driving Report to Congress, NHTSA's survey of the research literature found differences between driving by subjects dosed with alcohol and subjects dosed with marijuana. Marijuana-dosed subjects driving in a simulator or in an instrumented vehicle on a closed course tended to drive below the speed limit, to allow a greater distance between themselves and vehicles ahead of them, and to take fewer risks than when they were not under the influence of marijuana. The study authors hypothesized that the subjects felt effects of the marijuana and were consciously altering their driving behavior to compensate. By contrast, subjects who were dosed with alcohol tended to drive faster than the speed limit, to follow leading cars more closely, and to generally drive in a riskier fashion than when they were not under the influence of alcohol. The NHTSA report includes the caveat that impacts on driving performance that can be measured under controlled conditions may or may not be significant under real-world conditions. NHTSA states that while laboratory studies are useful in identifying how substances affect the performance of driving tasks, only epidemiological studies (i.e., studies that look at actual crashes and the factors involved) are useful in predicting their impact on real-world crash risk. Relatively few epidemiological studies of marijuana usage and crash risk have been conducted, and the few that have been conducted have generally found low or no increased risk of crashes from marijuana use. In reports examining many aspects of marijuana use and its effects, the National Academy of Sciences (NAS) in a 2017 report and the National Institutes of Health in a 2018 report reference various studies on the impact of marijuana consumption on driver performance to state that cannabis use prior to driving increases the risk of being involved in a motor vehicle accident. For example, the NAS committee that produced the 2017 report looked at systematic reviews of driving under the influence of marijuana and at recently published primary literature. The NAS committee's report concluded, "There is substantial evidence of a statistical association between cannabis use and increased risk of motor vehicle crashes." Several factors complicate the effort to determine what, if any, impact marijuana usage has on the likelihood of being involved in a crash. Chief among these factors is the distinction between correlation (things that occur together) and causation (one thing that causes another thing). A driver who has been involved in a crash may have used marijuana shortly before the crash; that correlation (marijuana usage and crash involvement) does not alone prove causation (that the marijuana usage was the cause of the driver being involved in a crash). For example, in the United States the population group with the highest rate of motor vehicle crashes, by far, is young male drivers (generally defined as those between the ages of 16 and 19). Young males are also the population group with the highest prevalence of marijuana use. When a young male driver is involved in a motor vehicle crash, and has recently used marijuana, it is difficult to separate the role, if any, of the effects of marijuana usage from the other factors that may contribute to the exceptionally high rate of crash involvement of young male drivers. An impaired driving arrest typically begins with a law enforcement officer stopping a driver for a traffic violation or observing a driver at a crash scene or a checkpoint. If the officer suspects that the driver is impaired by alcohol, based on the driver's behavior and signs such as the odor of alcohol or other evidence of its presence, the officer may administer a field sobriety test or preliminary breath test to check for alcohol impairment. Training for the Standard Field Sobriety Test for alcohol impairment is usually included in basic police academy courses. The test includes 1) a driver heel-to-toe walk and turn test, and 2) a driver one-leg standing test. Law enforcement officers often are not trained in recognizing impairment from marijuana or other drugs. NHTSA, with input from law enforcement organizations, has developed two training programs for law enforcement officers to recognize drug impairment in drivers during roadside stops. Advanced Roadside Impaired Driving Enforcement (ARIDE) is a 16-hour course providing basic information on drug impairment, including indications of impairment from both marijuana and other opioids. From 2009 through 2015, around 8% of the nation's patrol officers received ARIDE training. Drug Recognition Experts (DRE) are trained not only to identify impairment by drugs but also to differentiate between categories of drugs. DRE training consists of 72 hours of classroom training and 40 to 60 hours of fieldwork. This represents a considerable investment of resources on the part of the trainee's organization, since it takes the officer away from regular duties for three to four weeks. As of 2016, around 1% of the nation's patrol officers were active DREs. In evaluating drivers suspected of impairment, DREs administer a 12-step evaluation lasting around 90 minutes. This is not a roadside test; the DRE testing protocol calls for the testing to be done in a controlled environment. Adherence to the protocol is important for the validity of the results. Urine, hair follicles, blood, and saliva can be tested for evidence of THC and its metabolites. At present THC cannot be measured accurately in a person's breath. Blood tests are considered the gold standard in establishing the presence of marijuana for impaired driving cases. To conduct a blood test of a driver suspected of driving under the influence of marijuana, police typically must obtain a search warrant and have the blood drawn by a nurse or person licensed to draw blood (phlebotomist). Testing of oral fluid can readily detect the presence of marijuana or its metabolites, and such testing is less complicated than blood testing. It may require a search warrant. Devices that can not only collect but also test oral fluids at the point of arrest (i.e., in the field) are available, but their accuracy and reliability have been questioned. Marijuana can be found in oral fluids as a result of environmental exposure. Hair testing is of little reliability for drug-impaired driving enforcement, as THC can be found in hair months after usage, so a positive result cannot be used to establish usage around the time of driving. THC in hair follicles can result from environmental exposure to second-hand smoke rather than direct consumption of marijuana. Also, the use of hair products can affect test results. Urine testing cannot be reliably used to establish drug use around the time of driving, as THC and its metabolites can be detected in urine for days, or even weeks, after usage. The decision as to whether a driver who tests positive for marijuana should be arrested or charged with driving while impaired is not straightforward, because tests for the presence of marijuana in a driver's body are inadequate to determine impairment. The value of testing a person for the presence of alcohol lies largely in the well-established link between levels of alcohol in a person's blood and impairing effects associated with that blood alcohol content. Similar links between levels of THC in a person's body and levels of impairment have not been established. The concentration of THC in a person's blood rises rapidly after consumption, then drops rapidly, within an hour or two. Impairing effects appear rapidly, but may remain for some time. Consequently, tests that show the amount of THC in the subject's body are poor indicators of impairment, how recently a person has used marijuana, or whether the person used marijuana or was simply exposed to second-hand smoke. Moreover, tests can show the presence of metabolites of THC, which themselves are not impairing, for weeks after consumption. Also, studies indicate that individuals can adapt to the impairing effects of marijuana, such that a level of THC that could indicate impairment in an occasional marijuana user may not have the same impairment effect on an experienced user. Some states have " per se " ("in itself") laws that make it illegal for a driver to have more than a certain concentration of THC in his or her system. In some other states, it is illegal for a person to drive with any trace of marijuana ("zero tolerance") in his or her system (see Table 1 ). Drivers have challenged convictions under per se marijuana impairment laws, with differing results. Some courts, acknowledging the testimony of experts that there is, at present, no reliable test to indicate impairment from marijuana, have nevertheless supported a state's per se standard as a reasonable effort to combat impaired driving in the absence of effective measurements of impairment. Other courts have overturned per se convictions on various grounds (e.g., that while the state legislation included all metabolites of marijuana, it was not reasonable to convict a driver of impairment when the driver tested positive for a metabolite that does not have an impairing effect). Marijuana possession and usage remain illegal under federal law. In addition, people holding certain jobs, including federal employees and transportation workers in safety-sensitive positions (such as airline pilots, aircraft maintenance personnel, railroad engineers, ship captains, commercial truck drivers, and bus drivers), are prohibited from consuming any amount of marijuana, regardless of state laws. Federal regulations require that transportation workers in safety-sensitive positions be tested for alcohol and certain drugs before beginning work for a new employer, if they are involved in a serious crash, and also at random. Safety-sensitive workers who appear to be under the influence of drugs or alcohol while at work can be tested immediately. Those who test positive must be evaluated by a substance abuse professional, complete counseling or treatment as prescribed by the evaluator, undergo a follow-up evaluation, and be tested again before returning to their safety-sensitive work. Those who return to safety-sensitive work after a positive test must be tested at least six times with no advance notice in the following 12 months. The follow-up period of intensive testing can be extended an additional four years. Approximately 12 million transportation workers are subject to these rules. In 2009, the U.S. Department of Transportation stated that it is "unacceptable for any safety-sensitive employee subject to drug testing under the Department of Transportation's drug testing regulations to use marijuana." Regardless of many states having legalized more uses of marijuana, safety-sensitive employees remain subject to drug testing and may lose their jobs for marijuana use that is legal under state law. There are several subjects on which better information may aid policymaking around the issue of marijuana and impairment. These include continued research into whether a quantitative standard can be established that correlates the level of THC in a person's body and the level of impairment, and better data on the prevalence of marijuana use by drivers, especially among drivers involved in crashes and drivers arrested for impaired driving. Currently, most states do not distinguish in their records whether drivers arrested for impaired driving are impaired by alcohol or other substances. Substance-specific impaired driving data could be of particular use in analyzing prelegalization and post-legalization data within a state and differences across states with different legal treatment of marijuana use. Given that currently the most reliable means of detecting impairment among drivers who have used marijuana is by observation of physiological, cognitive, and psychomotor indicators by law enforcement officers, another policy option is additional support for training of law enforcement officers in detecting impairment. To improve the handling of drug-impaired driving cases, the Governors Highway Safety Association has recommended that prosecutors and judges assigned to drug-impaired driving cases receive training in the issue. Among the roughly 12 million transportation workers whose safety-sensitive status subjects them to federally mandated drug testing, federal regulations provide no opportunity for legal use of marijuana, regardless of the status of marijuana under state law. As previously discussed, regulations that apply to safety-sensitive employees do provide an avenue for an employee who has tested positive to regain a safety-sensitive position. CRS could not identify any data on how many safety-sensitive transportation employees have lost their jobs as a result of positive tests for marijuana use. Considering the length of time that marijuana is detectable in the body after usage, and the uncertainty about the impairing effect of marijuana on driving performance, Congress and other federal policymakers may elect to reexamine the rationale for testing all safety-sensitive transportation workers for marijuana usage. Alternatively, Congress and federal policymakers may opt to maintain the status quo until more research results become available.
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A growing number of Americans report that they use marijuana. Most states now allow the use of marijuana for treatment of medical conditions. Ten states and the District of Columbia, representing a quarter of the U.S. population, have decriminalized the recreational use of marijuana, and other states are considering following suit. As the opportunity for legal use of marijuana grows, there is concern about the impact of marijuana usage on highway safety. In a 2018 survey, the majority of state highway safety officers considered drugged driving an issue at least as important as driving while impaired by alcohol (which is associated with over 10,000 highway deaths each year). As of May 2019, 18 states have enacted laws declaring that a specified concentration of THC in a driver's body constitutes evidence of impairment and is inherently illegal (referred to as per se laws), similar to the .08% blood alcohol content (BAC) standard of alcohol impairment. Advocates of loosening restrictions on marijuana often compare marijuana usage to drinking alcohol, which may contribute to some stakeholders viewing marijuana use and driving as similar to alcohol's impairment of driving. Research studies indicate that marijuana's effects on drivers' performance may vary from the effects of alcohol, in ways that challenge dealing with marijuana impairment and driving similarly to alcohol-impaired driving. Alcohol is a nervous system depressant that is absorbed into the blood and metabolized by the body fairly quickly, such that there is little trace of alcohol after 24 hours. Its impairing effects have been extensively studied over many decades, and the association between levels of alcohol consumption and degrees of impairment is well-established. By contrast, marijuana is a nervous system stimulant. It contains over 500 chemical compounds, only one of which, tetrahydrocannabinol (THC), is significantly psychoactive. Its effects are felt quickly after smoking, but more slowly when consumed in other forms (e.g., in food). It is metabolized quickly, but the body can store THC in fat cells, so that traces of THC can be found up to several weeks after consumption. Its impairing effects have been the subject of limited study, due in part to its status as a controlled substance under federal law. Although laboratory studies have shown that marijuana consumption can affect a person's response times and motor performance, studies of the impact of marijuana consumption on a driver's risk of being involved in a crash have produced conflicting results, with some studies finding little or no increased risk of a crash from marijuana usage. Levels of impairment that can be identified in laboratory settings may not have a significant impact in real world settings, where many variables affect the likelihood of a crash occurring. Research studies have been unable to consistently correlate levels of marijuana consumption, or THC in a person's body, and levels of impairment. Thus some researchers, and the National Highway Traffic Safety Administration, have observed that using a measure of THC as evidence of a driver's impairment is not supported by scientific evidence to date. Congress, state legislatures, and other decisionmakers may address the topic of marijuana use and driver impairment through various policy options, including whether or not to support additional research on the impact of marijuana on driver performance and on measurement techniques for marijuana impairment, as well as training for law enforcement on identifying marijuana impairment. Other deliberations may address federal regulations on marijuana use and testing for transportation safety-sensitive employees.
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Firefighting activities are traditionally the responsibility of states and local communities. As such, funding for firefighters is provided mostly by state and local governments. During the 1990s, shortfalls in state and local budgets, coupled with increased responsibilities of local fire departments, led many in the fire community to call for additional financial support from the federal government. Although federally funded training programs existed (and continue to exist) through the National Fire Academy, and although federal money was available to first responders for counterterrorism tra ining and equipment through the Department of Justice, there did not exist a dedicated program, exclusively for firefighters, which provided federal money directly to local fire departments to help address a wide variety of equipment, training, and other firefighter-related needs. During the 106 th Congress, many in the fire community asserted that local fire departments require and deserve greater support from the federal government. The Assistance to Firefighters Grant Program (AFG), also known as fire grants or the FIRE Act grant program, was established by Title XVII of the FY2001 Floyd D. Spence National Defense Authorization Act ( P.L. 106-398 ). Currently administered by the Federal Emergency Management Agency (FEMA) in the Department of Homeland Security (DHS), the program provides federal grants directly to local fire departments and unaffiliated Emergency Medical Services (EMS) organizations to help address a variety of equipment, training, and other firefighter-related and EMS needs. AFG also supports fire prevention projects and firefighter health and safety research and development through the Firefighter Prevention and Safety (FP&S) grant program, which is funded at not less than 10% of the annual appropriation for AFG. Since its establishment, the Assistance to Firefighters Grant program has been reauthorized three times. The first reauthorization was Title XXXVI of the FY2005 Ronald W. Reagan National Defense Authorization Act ( P.L. 108-375 ), which authorized the program through FY2009. The second reauthorization was Title XVIII, Subtitle A of the FY2013 National Defense Authorization Act ( P.L. 112-239 ), which authorized the program through FY2017 and modified program rules for disbursing grant money. The third and current reauthorization is the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 ( P.L. 115-98 ), which authorizes the program through FY2023. On January 2, 2013, President Obama signed P.L. 112-239 , the FY2013 National Defense Authorization Act. Title XVIII, Subtitle A is the Fire Grants Reauthorization Act of 2012, which authorized the fire grant program through FY2017 and made significant changes in how grant money would be disbursed. Table 1 provides a summary of key provisions of the 2012 reauthorization, and provides a comparison with the previously existing statute. With the authorizations of both the AFG and SAFER programs expiring on September 30, 2017, and with sunset dates for both programs of January 2, 2018, the 115 th Congress considered reauthorization legislation. On April 5, 2017, S. 829 , the AFG and SAFER Program Reauthorization Act of 2017 was introduced by Senator McCain and referred to the Committee on Homeland Security and Governmental Affairs. On May 17, 2017, the committee ordered S. 829 to be reported ( S.Rept. 115-128 ) with an amendment in the nature of a substitute. On August 2, 2017, the Senate passed S. 829 by unanimous consent. On July 12, 2017, the House Subcommittee on Research and Technology, Committee on Science, Space and Technology, held a hearing entitled U.S. Fire Administration and Fire Grant Programs Reauthorization: Examining Effectiveness and Priorities . Testimony was heard from the USFA acting administrator and from fire service organizations. On December 15, 2017, H.R. 4661 , the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017, was introduced by Representative Comstock. H.R. 4661 was identical to the Senate-passed S. 829 , except that while S. 829 repealed the sunset provisions for AFG and SAFER, H.R. 4661 extended the sunset dates to September 30, 2024. Additionally, H.R. 4661 reauthorized the USFA through FY2023. On December 18, 2017, the House passed H.R. 4661 by voice vote under suspension of the rules. On December 21, 2017, the Senate passed H.R. 4661 without amendment by unanimous consent. Other legislation related to the fire act reauthorization included H.R. 3881 , the AFG and SAFER Program Reauthorization Act of 2017, introduced by Representative Pascrell, which was identical to S. 829 as passed by the Senate; and H.R. 1571 , the Fire Department Proper Response and Equipment Prioritization Act, which was introduced by Representative Herrera-Beutler and would amend the FIRE Act statute to direct FEMA to give high-priority consideration to grants providing for planning, training, and equipment to firefighters for crude oil-by-rail and ethanol-by-rail derailment and incident response. On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 ( P.L. 115-98 ). P.L. 115-98 extends the AFG and SAFER authorizations through FY2023; extends the sunset provisions for AFG and SAFER through September 30, 2024; extends the USFA authorization through FY2023; provides that the U.S. Fire Administration in FEMA may develop and make widely available an online training course on AFG and SAFER grant administration; expands SAFER hiring grant eligibility to cover the conversion of part-time or paid-on-call firefighters to full-time firefighters; directs FEMA, acting through the Administrator of USFA, to develop and implement a grant monitoring and oversight framework to mitigate and minimize risks of fraud, waste, abuse, and mismanagement related to the AFG and SAFER grant programs; and makes various technical corrections to the AFG and SAFER statute. From FY2001 through FY2003, the Assistance to Firefighters Grant (AFG) Program (as part of USFA/FEMA) received its primary appropriation through the VA-HUD-Independent Agencies Appropriation Act. In FY2004, the Assistance to Firefighters Program began to receive its annual appropriation through the House and Senate Appropriations Subcommittees on Homeland Security. The fire grant program is in its 19 th year. Table 2 shows the appropriations history for firefighter assistance, including AFG, SAFER, and the Fire Station Construction Grants (SCG) provided in the American Recovery and Reinvestment Act of 2009 (ARRA). Table 3 shows recent and proposed appropriated funding for the AFG and SAFER grant programs. For FY2017, the Obama Administration requested $335 million for AFG and $335 million for SAFER, a reduction of $10 million for each program from the FY2016 enacted level. The budget justification stated that the proposed reduction in AFG and SAFER "reflects FEMA's successful investments in prior year grants awarded." Under the proposed budget, the AFG and SAFER grant accounts would be transferred to the Preparedness and Protection activity under FEMA's broader "Federal Assistance" account. According to the budget request, Federal Assistance programs will "assist Federal agencies, States, Local, Tribal, and Territorial jurisdictions to mitigate, prepare for and recover from terrorism and natural disasters." On May 26, 2016, the Senate Appropriations Committee approved S. 3001 , the Department of Homeland Security Act, 2017. The Senate bill would provide $680 million for firefighter assistance, including $340 million for AFG and $340 million for SAFER. The committee maintained a separate budget account for Firefighter Assistance and did not transfer that budget account to the Federal Assistance account as proposed in the Administration budget request. In the accompanying report ( S.Rept. 114-68 ), the committee directed DHS to continue the present practice of funding applications according to local priorities and those established by the USFA, and to continue direct funding to fire departments and the peer review process. The committee stated its expectation that funding for rural fire departments remain consistent with their previous five-year history, and directed FEMA to brief the committee if there is a fluctuation. On June 22, 2016, the House Appropriations Committee approved its version of the Department of Homeland Security Appropriations Act, 2017. Unlike the Senate, the House Committee did transfer the Firefighter Assistance budget account into a broader Federal Assistance account in FEMA. The bill provided $690 million for firefighter assistance, including $345 million for AFG and $345 million for SAFER. In the committee report, the committee directed FEMA to continue administering the fire grants programs as directed in prior year committee reports, and encouraged FEMA to ensure that the formulas used for equipment accurately reflect current costs. The Consolidated Appropriations Act, 2017 ( P.L. 115-31 ) provided $690 million for firefighter assistance in FY2017, including $345 million for AFG and $345 million for SAFER. Money is to remain available through September 30, FY2018. The firefighter assistance account was transferred to FEMA's broader Federal Assistance account. For FY2018, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for AFG and $344.344 million for SAFER, slightly below the FY2017 level. AFG and SAFER are under Grants in the Federal Assistance budget account. On July 18, 2017, the House Appropriations Committee approved the Department of Homeland Security Appropriations Act, 2018 ( H.R. 3355 ; H.Rept. 115-239 ). The bill provided $690 million for firefighter assistance under the Federal Assistance budget account, including $345 million for AFG and $345 million for SAFER. In the bill report, the committee encouraged FEMA to give high-priority consideration to grants providing for planning, training, and equipment to firefighters for crude oil-by-rail and ethanol-by-rail derailment and incident response. On September 14, 2017, the House passed H.R. 3354 , a FY2018 omnibus appropriations bill that includes funding for AFG and SAFER. During floor consideration, the House adopted an amendment offered by Representative Kildee that added $20 million to SAFER; thus H.R. 3354 would provide $345 million for AFG and $365 million for SAFER. The Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) provided $700 million for firefighter assistance in FY2018, including $350 million for AFG and $350 million for SAFER. Money is to remain available through September 30, 2019. For FY2019, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for AFG and $344.344 million for SAFER. On June 21, 2018, the Senate Appropriations Committee approved S. 3109 , the Department of Homeland Security Act, 2019 ( S.Rept. 115-283 ). The Senate bill would have provided $700 million for firefighter assistance, including $350 million for AFG and $350 million for SAFER. On July 25, 2018, the House Appropriations Committee approved its version of the FY2019 Homeland Security appropriations bill ( H.R. 6776 ; H.Rept. 115-948 ). The House bill would also have provided $700 million for firefighter assistance, including $350 million for AFG and $350 million for SAFER. In the bill report, the committee encouraged FEMA to give high priority consideration to grants providing for planning, training, and equipment to firefighters for crude oil-by-rail and ethanol-by-rail derailment and incident response. The committee also encouraged FEMA to "provide technical assistance, and work more closely with those communities that are underserved or underrepresented," and to rate Source Capture Exhaust Extraction Systems as "high priority" under the AFG program. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $700 million for firefighter assistance in FY2019, including $350 million for AFG and $350 million for SAFER, with funds to remain available through September 30, 2020. For FY2020, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for AFG and $344.344 million for SAFER. This is the same amount the Administration requested in its FY2019 budget proposal and a 1.6% reduction from the FY2019 appropriation. Since its inception, the traditional fire grant program has provided money specifically for health- and safety-related modifications of fire stations, but has not funded major upgrades, renovations, or construction. The American Recovery and Reinvestment Act (ARRA) of 2009 ( P.L. 111-5 ) provided an additional $210 million in firefighter assistance grants for modifying, upgrading, or constructing state and local nonfederal fire stations, provided that 5% be set aside for program administration, and provided that no grant shall exceed $15 million. The conference report ( H.Rept. 111-16 ) cited DHS estimates that this spending would create 2,000 jobs. The ARRA also included a provision (§603) that waived the matching requirement for SAFER grants funded by appropriations in FY2009 and FY2010. The application period for ARRA Assistance to Firefighters Fire Station Construction Grants (SCG) opened on June 11 and closed on July 10, 2009. There is no cost share requirement for SCG grants. Eligible applicants are nonfederal fire departments that provide fire protection services to local communities. Ineligible applicants include federal fire departments, EMS or rescue organizations, airport fire departments, for-profit fire departments, fire training centers, emergency communications centers, auxiliaries and fire service organizations or associations, and search and rescue teams or similar organizations without fire suppression responsibilities. DHS/FEMA received 6,025 SCG applications for $9.9 billion in federal funds. As of October 1, 2010, 119 SCG grants were awarded, totaling $207.461 million to fire departments within the United States. A complete list of SCG awards is available at http://www.fema.gov/rules-tools/assistance-firefighters-station-construction-grants . In response to concerns over the adequacy of firefighter staffing, the 108 th Congress enacted the Staffing for Adequate Fire and Emergency Response (SAFER) Act as Section 1057 of the FY2004 National Defense Authorization Act ( P.L. 108-136 ; signed into law November 24, 2003). The SAFER grant program is codified as Section 34 of the Federal Fire Prevention and Control Act of 1974 (15 U.S.C. 2229a). The SAFER Act authorizes grants to career, volunteer, and combination fire departments for the purpose of increasing the number of firefighters to help communities meet industry minimum standards and attain 24-hour staffing to provide adequate protection from fire and fire-related hazards. Also authorized are grants to volunteer fire departments for activities related to the recruitment and retention of volunteers. For more information on the SAFER program, see CRS Report RL33375, Staffing for Adequate Fire and Emergency Response: The SAFER Grant Program , by Lennard G. Kruger. On May 13, 2003, the U.S. Fire Administration (USFA) released the first independent evaluation of the Assistance to Firefighters Program. Conducted by the U.S. Department of Agriculture's Leadership Development Academy Executive Potential Program, the survey study presented a number of recommendations and concluded overall that the program was "highly effective in improving the readiness and capabilities of firefighters across the nation." Another evaluation of the fire grant program was released by the DHS Office of Inspector General in September 2003. The report concluded that the program "succeeded in achieving a balanced distribution of funding through a competitive grant process," and made a number of specific recommendations for improving the program. At the request of DHS, the National Academy of Public Administration conducted a study to help identify potential new strategic directions for the Assistance to Firefighters Grant program and to provide advice on how to effectively plan, manage, and measure program accomplishments. Released in April 2007, the report recommended consideration of new strategic directions related to national preparedness, prevention vs. response, social equity, regional cooperation, and emergency medical response. According to the report, the "challenge for the AFG program will be to support a gradual shift in direction without losing major strengths of its current management approach—including industry driven priority setting and its well-respected peer review process." The Consolidated Appropriations Act of 2008 ( P.L. 110-161 ), in the accompanying Joint Explanatory Statement, directed the Government Accountability Office (GAO) to review the application and award process for fire and SAFER grants. Additionally, FEMA was directed to peer review grant applications that best address the program's priorities and criteria as established by FEMA and the fire service. Those criteria necessary for peer-review must be included in the grant application package. Applicants whose grant applications are not reviewed must receive an official notification detailing why the application did not meet the criteria for review. Applications must be rank-ordered, and funded following the rank order. In October 2009, GAO sent a report to Congress finding that FEMA has met most statutory requirements for awarding fire grants. GAO recommended that FEMA establish a procedure to track EMS awards, ensure that grant priorities are better aligned with application questions and scoring values, and provide specific feedback to rejected applicants. During 2014 and 2015, the DHS Office of the Inspector General (OIG) conducted an audit of AFG grants for fiscal years 2010 through 2012. On June 9, 2016, the DHS OIG released its report finding that 64% of AFG grant recipients over that period did not comply with grant guidance and requirements to prevent waste, fraud, and abuse of grant funds. The report recommended that FEMA's Grant Programs Directorate develop and implement an organizational framework to manage the risk of fraud, waste, abuse, and mismanagement. According to the report, FEMA has concurred with the OIG findings and has taken corrective actions to resolve the recommendations. Meanwhile, the Fire Grants Reauthorization Act of 2012 ( P.L. 112-239 ) directed GAO to prepare a report to Congress that includes an assessment of the effect of the changes made by P.L. 112-239 on the effectiveness, relative allocation, accountability, and administration of the fire grants. GAO was also directed to evaluate the extent to which those changes have enabled grant recipients to mitigate fire and fire-related and other hazards more effectively. In September 2016, GAO released its report, entitled Fire Grants: FEMA Could Enhance Program Administration and Performance Assessment. The report concluded that FEMA's fire grant policies and the awards made in FY2013 and FY2014 generally reflected the changes to the fire grant statute made by P.L. 112-239 , and that FEMA enhanced its assessment of program performance by establishing and reporting on measures of effectiveness of the grants. However, GAO also concluded that those performance measures do not include measurable performance targets linked to AFG and SAFER program goals, and that "aligning the fire grants programs' use of data on, and definitions of, critical infrastructure to award fire grants and assess program performance with the more objective, quantitative approach used by DHS and GPD [the Grants Program Directorate] for other programs and nonfire preparedness grants could enhance GPD's efforts to integrate the fire grants program into larger national preparedness efforts and more objectively assess the impact of fire grants." In November 2016, the National Fire Protection Association (NFPA) released its Fourth Needs Assessment of the U.S. Fire Service , which seeks to identify gaps and needs in the fire service, and assesses the extent to which fire grants target those gaps and needs. According to the study: For respondent departments, fire service needs are extensive across the board, and in nearly every area of need, the smaller the community protected, the greater the need. While some needs have declined, many others have been constant or have shown an increase. Gaps remain across the board in staffing, training, facilities, apparatus, personal protective equipment, and health and wellness. Evidence of the need for staffing engines; training for structural firefighting, Hazmat and wildland firefighting; and updated SCBA and personal protective clothing is concerning. Roles and responsibilities of the fire service are expanding apparently at the same time appears that resources are being cut. EMS and Hazmat are now common responsibilities while active shooter response, enhanced technical rescue and wildland-urban interface firefighting are up and coming challenges for many departments. AFG and SAFER grant funds are targeted towards areas of need. As other resources are cut back, more departments turn towards these grants for support. If anything, these grant programs should grow in order to address the considerable multifaceted need that continues in the fire service. The AFG statute prescribes different purposes for which fire grant money may be used. These are training firefighting personnel; creating rapid intervention teams; certifying fire inspectors and building inspectors whose responsibilities include fire safety inspections and who are associated with a fire department; establishing wellness and fitness programs, including mental health programs; funding emergency medical services (EMS) provided by fire departments and nonaffiliated EMS organizations; acquiring firefighting vehicles; acquiring firefighting equipment; acquiring personal protective equipment; modifying fire stations, fire training facilities, and other facilities for health and safety; educating the public about arson prevention and detection; providing incentives for the recruitment and retention of volunteer firefighters; and supporting other activities as FEMA determines appropriate. FEMA has the discretion to decide which of those purposes will be funded for a given grant year. This decision is based on a Criteria Development Panel, composed of fire service and EMS representatives, which annually recommends criteria for awarding grants. Since the program commenced in FY2001, the majority of fire grant funding has been used by fire departments to purchase firefighting equipment, personal protective equipment, and firefighting vehicles. Eligible applicants are limited primarily to fire departments (defined as an agency or organization that has a formally recognized arrangement with a state, local, or tribal authority to provide fire suppression, fire prevention, and rescue services to a population within a fixed geographical area). Emergency Medical Services (EMS) activities (at least 3.5% of annual AFG funding) are eligible for fire grants, including a limited number (no more than 2%) to nonfire department EMS organizations not affiliated with hospitals. Additionally, a separate competition is held for fire prevention and firefighter safety research and development grants, which are available to fire departments; national, state, local, tribal, or nonprofit organizations recognized for their fire safety or prevention expertise; and to institutions of higher education, national fire service organizations, or national fire safety organizations to establish and operate fire safety research centers. For official program and application guidelines, frequently asked questions, the latest awards announcements, and other information, see the Assistance to Firefighters Grant program web page at http://www.fema.gov/welcome-assistance-firefighters-grant-program . The FIRE Act statute provides overall guidelines on how fire grant money will be distributed. Previously, the law directed that volunteer and combination departments receive a proportion of the total grant funding that is not less than the proportion of the U.S. population that those departments protect (34% for combination, 21% for all-volunteer). Reflecting concerns that career fire departments (which are primarily in urban and suburban areas) were not receiving adequate levels of funding, the Fire Grants Authorization Act of 2012 altered the distribution formula, directing that not less than 25% of annual AFG funding go to career fire departments, not less than 25% to volunteer fire departments, not less than 25% to combination and paid-on-call fire departments, and not less than 10% for open competition among career, volunteer, combination, and paid-on-call fire departments. Additionally, P.L. 112-239 raised award caps (up to $9 million) and lowered matching requirements for fire departments serving higher population areas. There is no set geographical formula for the distribution of fire grants—fire departments throughout the nation apply, and award decisions are made by a peer panel based on the merits of the application and the needs of the community. However, in evaluating applications, FEMA may take into consideration the type of department (paid, volunteer, or combination), geographic location, and type of community served (e.g., urban, suburban, or rural). In an effort to maximize the diversity of awardees, the geographic location of an applicant (using states as the basic geographic unit) is used as a deciding factor in cases where applicants have similar qualifications. Table 4 shows a state-by-state breakdown of fire grant funding for FY2001 through FY2017, while Table 5 shows a state-by-state breakdown of SAFER grant funding for FY2005 through FY2017. Table 6 shows the percentage distribution of AFG grant funds by type of department (career, combination, volunteer, paid-on-call) for FY2009 through FY2014, while Table 7 shows the percentage distribution of AFG grant funds by community service area (urban, suburban, rural) for FY2009 through FY2014. Firefighter assistance grants were impacted by the partial government shutdown. FEMA personnel who administer the grants were furloughed. For all three grant programs (AFG, SAFER, and FP&S) the application and awards process was delayed. For the 2018 awards round, the application windows for AFG and FP&S closed in October and December 2018, respectively, but the processing of those applications could not move forward. The opening of the 2018 round application window for SAFER grants was also delayed. For grants already awarded (in the 2017 and previous rounds), grant recipients periodically draw down funds, either to reimburse expenditures already incurred, or in immediate advance of those expenditures. Grant recipients were unable to draw down funds during the shutdown, which may have disrupted the ability of the grantees to continue grant-funded activities, including personnel costs covered by SAFER grant awards, which extend for three years. This disruption may continue after the government shutdown has resolved due to a backlog of payment requests that need to be processed once furloughed FEMA grant personnel return to work. AFG assistance is distributed to career, volunteer, combination, and paid-on-call fire departments serving urban, suburban, and rural areas. A continuing issue is how equitably and effectively grants are being distributed and used to protect the health and safety of the public and firefighting personnel against fire and fire-related hazards. Another issue for Congress is whether AFG should be expanded to allow additional eligible uses of AFG grants. For example, H.R. 1823 , the Help Ensure Responders Overdosing Emerge Safely Act of 2019, would amend the Federal Fire Prevention and Control Act of 1974 to include as an eligible use of AFG grants, "to provide opioid receptor antagonists, including naloxone, to firefighters, paramedics, emergency medical service workers, and other first responders for personal use." Finally, a continuing issue is budget appropriations for AFG and SAFER. As is the case with many federal programs, concerns over the federal budget deficit could impact budget levels for AFG and SAFER. At the same time, firefighter assistance budgets will likely receive heightened scrutiny from the fire service community, given the local budgetary shortfalls that many fire departments may face.
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The Assistance to Firefighters Grant (AFG) Program, also known as fire grants or the FIRE Act grant program, was established by Title XVII of the FY2001 National Defense Authorization Act (P.L. 106-398). Currently administered by the Federal Emergency Management Agency (FEMA), Department of Homeland Security (DHS), the program provides federal grants directly to local fire departments and unaffiliated Emergency Medical Services (EMS) organizations to help address a variety of equipment, training, and other firefighter-related and EMS needs. AFG also supports fire prevention projects and firefighter health and safety research and development through the Firefighter Prevention and Safety (FP&S) grant program. A related program is the Staffing for Adequate Fire and Emergency Response Firefighters (SAFER) program, which provides grants for hiring, recruiting, and retaining firefighters. The fire grant program is now in its 19th year. AFG assistance is distributed to career, volunteer, combination, and paid-on-call fire departments serving urban, suburban, and rural areas. There is no set geographical formula for the distribution of fire grants—fire departments throughout the nation apply, and award decisions are made by a peer panel based on the merits of the application and the needs of the community. On January 3, 2018, the President signed the United States Fire Administration, AFG, and SAFER Program Reauthorization Act of 2017 (P.L. 115-98). P.L. 115-98 extends the AFG and SAFER authorizations through FY2023; extends the sunset provisions for AFG and SAFER through September 30, 2024; provides that the U.S. Fire Administration (USFA) may develop and make widely available an online training course on AFG and SAFER grant administration; expands SAFER hiring grant eligibility to cover the conversion of part-time or paid-on-call firefighters to full-time firefighters; directs FEMA, acting through the Administrator of USFA, to develop and implement a grant monitoring and oversight framework to mitigate and minimize risks of fraud, waste, abuse, and mismanagement related to the AFG and SAFER grant programs; and makes various technical corrections to the AFG and SAFER statute. The Consolidated Appropriations Act, 2019 (P.L. 116-6) provided $700 million for firefighter assistance in FY2019, including $350 million for AFG and $350 million for SAFER. For FY2020, the Administration requested $688.688 million for firefighter assistance, including $344.344 million for AFG and $344.344 million for SAFER. This is the same amount the Administration requested in its FY2019 budget proposal and a 1.6% reduction from the FY2019 appropriation. A continuing issue for the 116th Congress is how equitably and effectively grants are being distributed and used to protect the health and safety of the public and firefighting personnel against fire and fire-related hazards. Another continuing issue is budget appropriations for AFG and SAFER. As is the case with many federal programs, concerns over the federal budget deficit could impact budget levels for AFG and SAFER. At the same time, firefighter assistance budgets will likely receive heightened scrutiny from the fire service community, given the local budgetary shortfalls that many fire departments may face.
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R ecent high-profile data breaches and privacy violations have raised national concerns over the legal protections that apply to Americans' electronic data. While some concern over data protection stems from how the government might utilize such data, mounting worries have centered on how the private sector controls digital information, the focus of this report. Inadequate corporate privacy practices and intentional intrusions into private computer networks have exposed the personal information of millions of Americans. At the same time, internet connectivity has increased and varied in form in recent years, expanding from personal computers and mobile phones to everyday objects such as home appliances, "smart" speakers, vehicles, and other internet-connected devices. Americans now transmit their personal data on the internet at an exponentially higher rate than the past. Along with the increased connectivity, a growing number of "consumer facing" actors (such as websites) and "behind the scenes" actors (such as data brokers and advertising companies) collect, maintain, and use consumers' information. While this data collection can benefit consumers—for instance, by allowing companies to offer them more tailored products—it also raises privacy concerns, as consumers often cannot control how these entities use their data. As a consequence, the protection of personal data has emerged as a major issue for congressional consideration. Despite the increased interest in data protection, the legal paradigms governing the security and privacy of personal data are complex and technical, and lack uniformity at the federal level. The Supreme Court has recognized that the Constitution provides various rights protecting individual privacy, but these rights generally guard only against government intrusions and do little to prevent private actors from abusing personal data online. At the federal statutory level, while there are a number of data protection statutes, they primarily regulate certain industries and subcategories of data. The Federal Trade Commission (FTC) fills in some of the statutory gaps by enforcing the federal prohibition against unfair and deceptive data protection practices. But no single federal law comprehensively regulates the collection and use of personal data. In contrast to the "patchwork" nature of federal law, some state and foreign governments have enacted more comprehensive data protection legislation. Some analysts suggest these laws, which include the European Union's (EU's) General Data Protection Regulation (GDPR) and state laws such as the California Consumer Privacy Act (CCPA), will create increasingly overlapping and uneven data protection regimes. This fragmented legal landscape coupled with concerns that existing federal laws are inadequate has led many stakeholders to argue that the federal government should assume a larger role in data protection policy. However, at present, there is no consensus as to what, if any, role the federal government should play, and any legislative efforts at data protection are likely to implicate unique legal concerns such as preemption, standing, and First Amendment rights, among other issues. This report examines the current U.S. legal landscape governing data protection, contrasting the current patchwork of federal data protection laws with the more comprehensive regulatory models in the CCPA and GDPR. The report also examines potential legal considerations for the 116th Congress should it consider crafting more comprehensive federal data protection legislation. The report lastly contains an Appendix , which contains a table summarizing the federal data protection laws discussed in the report. Historically, the common law in the United States had little need to protect privacy—as one commentator has observed, "[s]olitude was readily available in colonial America." Although common law had long protected against eavesdropping and trespass, these protections said little to nothing about individual rights to privacy, per se. Over time, gradual changes in the technological and social environment caused a shift in the law. In 1890, Louis Brandeis and Samuel Warren published a groundbreaking article in the Harvard Law Review entitled The Right to Privacy . Reacting to the proliferation of the press and advancements in technology such as more advanced cameras, the article argued that the law should protect individuals' "right to privacy" and shield them from intrusion from other individuals. The authors defined this emergent right as the "right to be let alone." Scholars have argued that this article created a "revolution" in the development of the common law. In the century that followed Brandeis's and Warren's seminal article, most states recognized the so-called "privacy torts"—intrusion upon seclusion, public disclosure of private facts, false light or "publicity," and appropriation. These torts revolve around the central idea that individuals should be able to lead, "to some reasonable extent, a secluded and private life." The Supreme Court described this evolution of privacy tort law as part of a "strong tide" in the twentieth century toward the "so-called right of privacy" in the states. Despite this "strong tide," some scholars have argued that these torts, which were developed largely in the mid-twentieth century, are inadequate to face the privacy and data protection problems of today. Furthermore, some states do not accept all four of these torts or have narrowed and limited the applicability of the torts so as to reduce their effectiveness. As discussed in greater detail below, state common law provides some other remedies and protections relevant to data protection, via tort and contract law. However, while all of this state common law may have some influence on data protection, the impact of this judge-made doctrine is unlikely to be uniform, as courts' application of these laws will likely vary based on the particular facts of the cases in which they are applied and the precedents established in the various states. As reflected in the common law's limited remedies, at the time of the founding, concerns about privacy focused mainly on protecting private individuals from government intrusion rather than on protecting private individuals from intrusion by others. Accordingly, the Constitution's Bill of Rights protects individual privacy from government intrusion in a handful of ways and does little to protect from non-governmental actors. Some provisions protect privacy in a relatively narrow sphere, such as the Third Amendment's protection against the quartering of soldiers in private homes or the Fifth Amendment's protection against self-incrimination. The most general and direct protection of individual privacy is contained in the Fourth Amendment, which states that "[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated . . ." For more than 100 years, the Fourth Amendment was generally read to prohibit only entry into private places rather than to provide general right to privacy. However, alongside the developments in the common law, constitutional law evolved over time to place a greater emphasis on protecting an individual's personal privacy. In particular, in 1967, the Supreme Court in Katz v. United States explained that the Fourth Amendment, while not creating a general "right to privacy," nonetheless protected "people, not places," and guarded individual privacy against certain types of governmental intrusion. This principle has continued to evolve over time, and has come to protect, to some extent, individuals' interest in their digital privacy. For example, in the 2018 case of Carpenter v. United States , the Supreme Court concluded that the Fourth Amendment's protection of privacy extended to protecting some information from government intrusion even where that information was shared with a third party. In Carpenter , the Court concluded that individuals maintain an expectation of privacy, protected by the Fourth Amendment, in the record of their movements as recorded by their cellular provider. Carpenter distinguished earlier cases which had relied upon the principle that information shared with third parties was generally not subject to Fourth Amendment scrutiny, concluding that "an individual maintains a legitimate expectation of privacy in the record of his physical movements as captured through [his cellular phone]." The Court's holding means that, in the future, the government must obtain a warrant supported by probable cause to obtain this information. The Fourth Amendment thus provides a limited bulwark against government intrusion into digital privacy. In addition to the protection provided by the Fourth Amendment, in the 1960s and 1970s, the Court concluded that the Fourteenth Amendment's guarantee of "liberty" implied the existence of a more general right of privacy, protecting individuals from government intrusion even outside the "search and seizure" context. In the 1977 case Whalen v. Roe , the Supreme Court explained that this constitutional right of privacy "in fact involve[s] at least two different kinds of interests. One is the individual interest in avoiding disclosure of personal matters, and another is the interest in independence in making certain kinds of important decisions." The second of these interests relates primarily to individual rights concerning the "intimacies of [persons'] physical relationship," as well as the right to abortion, and has little connection to data protection. However, the first of the interests listed in Whalen could potentially relate to data protection. This interest, the right to avoid certain disclosures, has come to be known as the right to "informational privacy." Despite its broad expression in Whalen , every Supreme Court case to consider the informational privacy right has rejected the constitutional claim and upheld the government program alleged to have infringed on the right. In Whalen itself, physicians and patients challenged a New York law that required the recording of the names and addresses of all persons who had obtained certain drugs for which there was both a lawful and unlawful market. Although the Court acknowledged that the statute "threaten[ed] to impair . . . [the plaintiffs'] interest in the nondisclosure of private information," the Court observed that the disclosures were an "essential part of modern medical practice" and the New York law had protections in place against unwarranted disclosure that showed a "proper concern" for the protection of privacy. Together, the Court found these factors sufficient to uphold the law. In the wake of Whalen and Nixon v. Administrator of General Services —a case decided the same year as Whalen that also considered the right to informational privacy—courts have struggled to articulate the precise contours of the right. The most recent Supreme Court case to consider the right to informational privacy, NASA v. Nelson , went so far as to suggest that the right might not exist, "assuming without deciding" that the right existed in the course of rejecting the constitutional claim challenge to a government background check program for hiring. Despite the Supreme Court's lack of clarity about the right to informational privacy, "most federal circuit courts" recognize the right to various extents. All of the constitutional rights involving privacy, like the common law privacy torts, focus on public disclosure of private facts. This focus limits their potential influence on modern data privacy debates, which extends beyond the disclosure issue to more broadly concern how data is collected, protected, and used. Perhaps more importantly, whatever the reach of the constitutional right to privacy, the "state action doctrine" prevents it from being influential outside the realm of government action. Under this doctrine, only government action is subject to scrutiny under the Constitution, but purely private conduct is not proscribed, "no matter how unfair that conduct may be." As a result, neither the common nor constitutional law provides a complete framework for considering many of the potential threats to digital privacy and consumer data. Rather, the most important data protection standards come from statutory law. Given the inherent limitations in common law and constitutional protections, Congress has enacted a number of federal laws designed to provide statutory protections of individuals' personal information. In contrast with the scheme prevalent in Europe and some other countries, rather than a single comprehensive law, the United States has a "patchwork" of federal laws that govern companies' data protection practices. These laws vary considerably in their purpose and scope. Most impose data protection obligations on specific industry participants—such as financial institutions, health care entities, and communications common carriers—or specific types of data, such as children's data. Other laws, however, supplement the Constitution's limited privacy protections and apply similar principles to private entities. The Stored Communications Act (SCA), for instance, generally prohibits the unauthorized access or disclosure of certain electronic communications stored by internet service providers. Lastly, some laws prohibit broad categories of conduct that, while not confined to data protection, limit how companies may handle personal data. Most notably, the Federal Trade Commission Act (FTC Act) prohibits "unfair or deceptive acts or practices." As some scholars have pointed out, the FTC has used its authority under the FTC Act to develop norms and principles that effectively fill in the gaps left by other privacy statutes. These laws are organized below, beginning with those most narrowly focused on discrete industries and moving toward more generally applicable laws. In light of its gap-filling function, this section lastly discusses the FTC Act—along with the Consumer Financial Protection Act (CFPA), which covers similar types of conduct. The Appendix to this report contains a table summarizing the federal data protection laws discussed. The Gramm-Leach-Bliley Act (GLBA) imposes several data protection obligations on financial institutions. These obligations are centered on a category of data called "consumer" "nonpublic personal information" (NPI), and generally relate to: (1) sharing NPI with third parties, (2) providing privacy notices to consumers, and (3) securing NPI from unauthorized access. First, unless an exception applies, GLBA and its implementing regulations prohibit financial institutions from sharing NPI with non-affiliated third parties unless they first provide the consumers with notice and an opportunity to "opt-out." Furthermore, financial institutions are prohibited altogether from sharing account numbers or credit card numbers to third parties for use in direct marketing. Second, financial institutions must provide "clear and conspicuous" initial and annual notices to customers describing their privacy "policies and practices." These notices must include, among other things, the categories of NPI collected and disclosed, the categories of third parties with which the financial institution shares NPI, and policies and practices with respect to protecting the confidentiality and security of NPI. Third, GLBA and its implementing regulations (often referred to as the "Safeguards Rule" ) require financial institutions to maintain "administrative, technical, and physical safeguards" to "insure the security and confidentiality" of "customer" (as opposed to "consumer") NPI, and to protect against "any anticipated threats or hazards" or "unauthorized access" to such information. Financial institutions regulated by federal banking agencies are further required to implement a program for responding to the unauthorized access of customer NPI. The Consumer Financial Protection Bureau (CFPB), FTC, and federal banking agencies share civil enforcement authority for GLBA's privacy provisions. However, the CFPB has no enforcement authority over GLBA's data security provisions. Under the data security provisions, federal banking regulators have exclusive enforcement authority for depository institutions, and the FTC has exclusive enforcement authority for all non-depository institutions. GLBA does not specify any civil remedies for violations of the Act, but agencies can seek remedies based on the authorities provided in their enabling statutes, as discussed below. GLBA also imposes criminal liability on those who "knowingly and intentionally" obtain or disclose "customer information" through false or fraudulent statements or representations. Criminal liability can result in fines and up to five years' imprisonment. GLBA does not contain a private right of action that would allow affected individuals to sue violators. Under the Health Insurance Portability and Accountability Act (HIPAA), the Department of Health and Human Services (HHS) has enacted regulations protecting a category of medical information called "protected health information" (PHI). These regulations apply to health care providers, health plans, and health care clearinghouses (covered entities), as well as certain "business associates" of such entities. The HIPAA regulations generally speak to covered entities': (1) use or sharing of PHI, (2) disclosure of information to consumers, (3) safeguards for securing PHI, and (4) notification of consumers following a breach of PHI. First, with respect to sharing, HIPAA's privacy regulations generally prohibit covered entities from using PHI or sharing it with third parties without patient consent, unless such information is being used or shared for treatment, payment, or "health care operations" purposes, or unless another exception applies. Covered entities generally may not make treatment or services conditional on an individual providing consent. Second, with respect to consumer disclosures, covered entities must provide individuals with "adequate notice of the uses and disclosures of [PHI] that may be made by the covered entity, and of the individual's rights and the covered entity's legal duties with respect to [PHI]." These notices must be provided upon consumer request, and covered entities maintaining websites discussing their services or benefits must "prominently post" the notices on their websites. Furthermore, an individual has the right to request that a covered entity provide him with a copy of his PHI that is maintained by the covered entity. In some cases, an individual may also request that the covered entity provide information regarding specific disclosures of the individual's PHI, including the dates, recipients, and purposes of the disclosures. Third, with respect to data security, covered entities must maintain safeguards to prevent threats or hazards to the security of electronic PHI. Lastly, HIPAA regulations contain a data breach notification requirement, requiring covered entities to, among other things, notify the affected individuals within 60 calendar days after discovering a breach of "unsecured" PHI. Violations of HIPAA's privacy requirements can result in criminal or civil enforcement. HHS possesses civil enforcement authority and may impose civil penalties, with the amount varying based on the level of culpability. The Department of Justice has criminal enforcement authority and may seek fines or imprisonment against a person who, in violation of HIPAA's privacy requirements, "knowingly" obtains or discloses "individually identifiable health information" or "uses or causes to be used a unique health identifier." HIPAA does not, however, contain a private right of action that would allow aggrieved individuals to sue alleged violators. The Fair Credit Reporting Act (FCRA) covers the collection and use of information bearing on a consumer's creditworthiness. FCRA and its implementing regulations govern the activities of three categories of entities: (1) credit reporting agencies (CRAs), (2) entities furnishing information to CRAs (furnishers), and (3) individuals who use credit reports issued by CRAs (users). In contrast to HIPAA or GLBA, there are no privacy provisions in FCRA requiring entities to provide notice to a consumer or to obtain his opt-in or opt-out consent before collecting or disclosing the consumer's data to third parties. FCRA further has no data security provisions requiring entities to maintain safeguards to protect consumer information from unauthorized access. Rather, FCRA's requirements generally focus on ensuring that the consumer information reported by CRAs and furnishers is accurate and that it is used only for certain permissible purposes. With respect to accuracy, CRAs must maintain reasonable procedures to ensure the accuracy of information used in "consumer reports." CRAs must further exclude adverse information, such as "accounts placed in collection" or civil judgements, from consumer reports after a certain amount of time has elapsed. Furnishers must similarly establish reasonable policies and procedures to ensure the accuracy of the information reported to CRAs and may not furnish to a CRA any consumer information if they have reasonable cause to believe that information is inaccurate. Consumers also have the right to review the information CRAs have collected on them to ensure such information is accurate. CRAs must disclose information contained in a consumer's file upon the consumer's request, as well as the sources of the information and the identity of those who have recently procured consumer reports on the consumer. Should a consumer dispute the accuracy of any information in his file, CRAs and furnishers must reinvestigate the accuracy of the contested information. In addition to the accuracy requirements, under FCRA consumer reports may be used only for certain permissible purposes such as credit transactions. Accordingly, a CRA may generally furnish consumer reports to a user only if it "has a reason to believe" the user intends to use it for a permissible purpose. Likewise, users may "use or obtain a consumer report" only for a permissible purpose. Along with the permissible purpose requirement, users must further notify consumers of any "adverse action" taken against the consumer based on the report. Adverse actions include refusing to grant credit on substantially the terms requested, reducing insurance coverage, and denying employment. The FTC and the CFPB share civil enforcement authority over FCRA, with each agency possessing enforcement authority over entities subject to their respective jurisdictions. In addition to government enforcement, FCRA provides a private right of action for consumers injured by willful or negligent violations of the Act. Consumers bringing such actions for negligent violations of the Act may recover actual damages, attorney's fees, and other litigation costs. For willful violations, consumers may recover either actual damages or statutory damages ranging from $100 to $1,000, attorney's fees, other litigation costs, and "such amount of punitive damages as the court may allow." FCRA also imposes criminal liability on any individual who knowingly and willfully obtains consumer information from a CRA under false pretenses and on any officer or employee of a CRA who knowingly and willfully provides consumer information to a person not authorized to receive that information. The Communications Act of 1934 (Communications Act or Act), as amended, established the Federal Communications Commission (FCC) and provides a "comprehensive scheme" for the regulation of interstate communication. Most relevant to this report, the Communications Act includes data protection provisions applicable to common carriers, cable operators, and satellite carriers. The Telecommunications Act of 1996 amended the Communications Act to impose data privacy and data security requirements on entities acting as common carriers. Generally, common carrier activities include telephone and telegraph services but exclude radio broadcasting, television broadcasting, provision of cable television, and provision of broadband internet. The privacy and security requirements imposed on entities acting as common carriers are primarily centered on a category of information referred to as "customer proprietary network information (CPNI)." CPNI is defined as information relating to the "quantity, technical configuration, type, destination, location, and amount of use of a telecommunications service subscribed to by any customer of a telecommunications carrier," and is "made available to the carrier by the customer solely by virtue of the carrier-customer relationship." Section 222(c) of the Communications Act and the FCC's implementing regulations set forth carriers' obligations regarding CPNI. These provisions cover three main issues. First, carriers must comply with certain use and disclosure rules. Section 222(c) imposes a general rule that carriers may not "use, disclose, or permit access to" "individually identifiable" CPNI without customer approval, unless a particular exception applies. Before a carrier may solicit a customer for approval to use or disclose their CPNI, it must notify customers of their legal rights regarding CPNI and provide information regarding the carrier's use and disclosure of CPNI. Second, carriers must implement certain safeguards to ensure the proper use and disclosure of CPNI. These safeguards must include, among other things, a system by which the "status of a customer's CPNI approval can be clearly established" prior to its use, employee training on the authorized use of CPNI, and "reasonable measures" to discover and protect against attempts to gain unauthorized access to CPNI." Lastly, carriers must comply with data breach requirements. Following a "breach" of customers' CPNI, a carrier must disclose such a breach to law enforcement authorities no later than seven days following a "reasonable determination of the breach." After it has "completed the process of notifying law enforcement," it must notify customers whose CPNI has been breached. In addition to the CPNI requirements, the Communications Act contains three other potentially relevant data privacy and security provisions pertaining to common carriers. First, Section 222(a) of the Act states that carriers must "protect the confidentiality of proprietary information" of "customers." Second, Section 201(b) of the Act declares unlawful "any charge, practice, classification, and regulation" in connection with a carrier's communication service that is "unjust or unreasonable." Lastly, Section 202(a) provides that it shall "be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classification, regulations, facilities, or services . . . ." In a 2016 rule, which was subsequently overturned pursuant to the Congressional Review Act, the FCC attempted to rely on these three provisions to regulate a broad category of data called "customer proprietary information" (customer PI). While customer PI is not defined in the statute, the FCC's 2016 rule defined it broadly to include CPNI, as well as other "personally identifiable information" and the "content of communications." The FCC reasoned that Section 222(a) imposes a general duty, independent from Section 222(c), on carriers to protect the confidentiality of customer PI. It further maintained that Sections 201(b) and 202(a) provide independent "backstop authority" to ensure that no gaps are formed in commercial data privacy and security practices, similar to the FTC's authority under the FTC Act. However, given that Congress overturned the 2016 rule, the FCC may be prohibited under the CRA from relying on these three provisions to regulate data privacy and security. Under the CRA, the FCC may not reissue the rule in "substantially the same form" or issue a "new rule that is substantially the same" as the overturned rule "unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule." The FCC is empowered to enforce civil violations of the Communications Act's provisions, including its common carrier provisions. The FCC may impose a "forfeiture penalty" against any person who "willfully or repeatedly" violates the Act or the FCC's implementing regulations. The Communications Act further imposes criminal penalties on those who "willfully and knowingly" violate the statute or the FCC's implementing regulations. Along with its general civil and criminal provisions, the Communications Act provides a private right of action for those aggrieved by violations of its common carrier provisions; in such actions, plaintiffs may seek actual damages and reasonable attorney's fees. In addition to common carriers, the Communications Act imposes a number of data privacy and security requirements on how "cable operators" and "satellite carriers" (i.e., covered entities) treat their subscribers' "personally identifiable information" (PII). These requirements relate to: (1) data collection and disclosure; (2) subscribers' access to, and correction of, their data; (3) data destruction; (4) privacy policy notification; and (5) data security. First, covered entities must obtain the "prior written or electronic consent" of a subscriber before collecting the subscriber's PII or disclosing it to third parties. There are several exceptions to this consent requirement. Among other things, covered entities may collect a subscriber's PII in order to obtain information necessary to render service to the subscriber, and they may disclose a subscriber's PII if the disclosure is necessary to "render or conduct a legitimate business activity" related to the service they provide. Second, covered entities must provide subscribers, at "reasonable times and a convenient place," with access to all of their PII "collected and maintained," and they must further provide subscribers a reasonable opportunity to correct any error in such information. Third, covered entities are obligated to destroy PII if it is "no longer necessary for the purpose for which it is was collected" and there are "no pending requests or orders for access to such information." Fourth, covered entities must provide subscribers with a privacy policy notice at the "time of entering into an agreement" for services and "at least once a year thereafter." These notices must describe, among other things: (1) the nature of the subscriber's PII that has been, or will be, collected, (2) the nature, frequency, and purpose of any disclosure of such information and the types of persons to whom the disclosure is made, and (3) the times and place at which the subscriber may have access to such information. Lastly, the Communications Act imposes a general data security requirement on covered entities; they must "take such actions as are necessary to prevent unauthorized access to [PII] by a person other than the subscriber" or the covered entity. The Communications Act provides a private right of action for "[a]ny person aggrieved by any act" of a covered entity in violation of these requirements. In such actions, a court may award actual damages, punitive damages, and reasonable attorneys' fees and other litigation costs. Additionally, covered entities violating these provisions may be subject to FCC civil enforcement and criminal penalties that, as previously noted, are generally applicable to violations of the Communications Act. The Video Privacy Protection Act (VPPA) was enacted in 1988 in order to "preserve personal privacy with respect to the rental, purchase, or delivery of video tapes or similar audio visual materials." The VPPA does not have any data security provisions requiring entities to maintain safeguards to protect consumer information from unauthorized access. However, it does have privacy provisions restricting when covered entities can share certain consumer information. Specifically, the VPPA prohibits "video tape service providers" —a term that includes both digital video streaming services and brick-and-mortar video rental stores —from knowingly disclosing PII concerning any "consumer" without that consumer's opt-in consent. The VPPA provides several exceptions to this general rule. In particular, video tape service providers may disclose PII to "any person if the disclosure is incident to the ordinary course of business." Providers may also disclose PII if the disclosure solely includes a consumer's name and address and does not identify the "title, description, or subject matter of any video tapes or other audio visual material," and the consumer has been provided with an opportunity to opt out of such disclosure. The VPPA does not empower any federal agency to enforce violations of the Act and there are no criminal penalties for violations, but it does provide for a private right of action for persons aggrieved by the Act. In such actions, courts may award actual damages, punitive damages, preliminary and equitable relief, and reasonable attorneys' fees and other litigation costs. The Family Educational Rights and Privacy Act of 1974 (FERPA) creates privacy protections for student education records. "Education records" are defined broadly to generally include any "materials which contain information directly related to a student" and are "maintained by an educational agency or institution." FERPA defines an "educational agency or institution" to include "any public or private agency or institution which is the recipient of funds under any applicable program." FERPA generally requires that any "educational agency or institution" (i.e., covered entities) give parents or, depending on their age, the student (1) control over the disclosure of the student's educational records, (2) an opportunity to review those records, and (3) an opportunity to challenge them as inaccurate. First, with respect to disclosure, covered entities must not have a "policy or practice" of permitting the release of education records or "personally identifiable information contained therein" without the consent of the parent or the adult student. This consent requirement is subject to certain exceptions. Among other things, covered entities may disclose educational records to (1) certain "authorized representatives," (2) school officials with a "legitimate educational interest," or (3) "organizations conducting studies" for covered entities "for the purpose of developing, validating, or administering predictive tests, administering student aid programs, and improving instructions." Covered entities may also disclose the information without consent if it constitutes "directory information" and the entity has given notice and a "reasonable period of time" to opt out of the disclosure. Second, in addition to the disclosure obligations, covered entities must not have a "policy of denying" or "effectively prevent[ing]" parents or an adult student from inspecting and reviewing the underlying educational records. Covered entities must further "establish appropriate procedures" to grant parents' review requests "within a reasonable period of time, but in no case more than forty-five days after the request has been made." Lastly, covered entities must provide an "opportunity for a hearing" to challenge the contents of the student's education records as "inaccurate, misleading, or otherwise in violation of the privacy rights of students." Covered entities must further "provide an opportunity for the correction or deletion of any such inaccurate, misleading or otherwise inappropriate data contained therein and to insert into such records a written explanation of the parents respecting the content of such records." Parents or adult students who believe that their rights under FERPA have been violated may file a complaint with the Department of Education. FERPA authorizes the Secretary of Education to "take appropriate actions," which may include withholding federal education funds, issuing a "cease and desist order," or terminating eligibility to receive any federal education funding. FERPA does not, however, contain any criminal provisions or a private right of action. While federal securities statutes and regulations do not explicitly address data protection, two requirements under these laws have implications for how companies prevent and respond to data breaches. First, federal securities laws may require companies to adopt controls designed to protect against data breaches. Under Section 13(b)(2)(B) of the Securities and Exchange Act of 1934 (Exchange Act), public companies and certain other companies are required to "devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances" that "transactions are executed in accordance with management's general or specific authorization," and that "access to assets is permitted only in accordance with management's general or specific authorization." In a recent report, the Securities and Exchange Commission (SEC) suggested that, in order to comply with this requirement, companies should consider "cyber-related threats" when formulating accounting controls. The report discussed the SEC's investigation of companies that wrongly transferred millions of dollars in response to fraudulent emails, generally noting that "companies should pay particular attention to the obligations imposed by Section 13(b)(2)(B)" in light of the "risks associated with today's ever expanding digital interconnectedness." Second, federal securities laws may require companies to discuss data breaches when making required disclosures under securities laws. The Exchange Act, Securities Act of 1933 (Securities Act), and their implementing regulations require certain companies to file a number of disclosures with the SEC. Specifically, the Securities Act requires companies issuing securities in a public offering to file detailed statements registering the offering (registration statements), and the Exchange Act requires public companies to file periodic reports on an annual, quarterly, and ongoing basis. These filings must contain certain categories of information, such as a description of the most significant factors that make investing in the company speculative or risky (known as "risk factors") and a description of any "events, trends, or uncertainties that are reasonably likely to have a material effect on its results of operations, liquidity, or financial condition . . . ." Further, when making these filings, or any other statements in connection with the purchase or sale of a security, companies are required to include any "material" information necessary to make the statements made therein "not misleading." In interpretive guidance issued in February 2018, the SEC indicated that, pursuant to these obligations, companies may be required to disclose in their filings cyber incidents such as data breaches. The SEC can enforce violations of the Securities Act and the Exchange Act, including the accounting controls requirement and the disclosure requirements, through civil actions filed in court or administrative "cease and desist" proceedings. The SEC may seek civil penalties, disgorgement, and injunctive relief (in civil actions) or a cease and desist order (in administrative proceedings). Furthermore, under both the Exchange Act and the Securities Act, individuals aggrieved by a company's misrepresentation or omission of a material fact in connection with the purchase or sale of a security may sue the company for actual damages incurred by the individual. There is not, however, a private right of action for violations of the Exchange Act's accounting controls requirement. Lastly, in addition to civil enforcement, both the Securities Act and the Exchange Act impose criminal liability; any person who "willfully" violates the acts or their implementing regulations may be subject to fines and imprisonment. The Children's Online Privacy Protection Act (COPPA) and the FTC's implementing regulations regulate the online collection and use of children's information. Specifically, COPPA's requirements apply to: (1) any "operator" of a website or online service that is "directed to children," or (2) any operator that has any "actual knowledge that it is collecting personal information from a child" (i.e., covered operators). Covered operators must comply with various requirements regarding data collection and use, privacy policy notifications, and data security. First, COPPA and the FTC's implementing regulations prohibit covered operators from collecting or using "personal information" from children under the age of thirteen without first obtaining parental consent. Such consent must be "verifiable" and must occur before the information is collected. Second, covered operators must provide parents with direct notice of their privacy policies, describing their data collection and sharing policies. Covered operators must further post a "prominent and clearly labeled link" to an online notice of its privacy policies at the home page of its website and at each area of the website in which it collects personal information from children. Lastly, covered operators that have collected information from children must establish and maintain "reasonable procedures" to protect the "confidentiality, security, and integrity" of the information, including ensuring that the information is provided only to third parties that will similarly protect the information. They must also comply with certain data retention and deletion requirements. Under COPPA's safe harbor provisions, covered operators will be deemed to have satisfied these requirements if they follow self-regulatory guidelines the FTC has approved. COPPA provides that violations of the FTC's implementing regulations will be treated as "a violation of a rule defining an unfair or deceptive act or practice" under the FTC Act. Under the FTC Act, as discussed in more detail below, the FTC has authority to enforce violations of such rules by seeking penalties or equitable relief. COPPA also authorizes state attorneys general to enforce violations affecting residents of their states. COPPA does not contain any criminal penalties or any provision expressly providing a private right of action. The Electronic Communications Privacy Act (ECPA) was enacted in 1986, and is composed of three acts: the Wiretap Act, the Stored Communications Act (SCA), and the Pen Register Act. Much of ECPA is directed at law enforcement, providing "Fourth Amendment like privacy protections" to electronic communications. However, ECPA's three acts also contain privacy obligations relevant to non-governmental actors. ECPA is perhaps the most comprehensive federal law on electronic privacy, as it is not sector-specific, and many of its provisions apply to a wide range of private and public actors. Nevertheless, its impact on online privacy practices has been limited. As some commentators have observed, ECPA "was designed to regulate wiretapping and electronic snooping rather than commercial data gathering," and litigants attempting to apply ECPA to online data collection have generally been unsuccessful. The Wiretap Act applies to the interception of a communication in transit. A person violates the Act if, among other acts, he "intentionally intercepts . . . any wire, oral, or electronic communication." The Wiretap Act defines an "electronic communication" broadly, and courts have held that the term includes information conveyed over the internet. Several thresholds must be met for an act to qualify as an unlawful "interception." Of particular relevance are three threshold issues. First, the communication must be acquired contemporaneously with the transmission of the communication. Consequently, there is no "interception" where the communication in question is in storage. Furthermore, the acquired information must relate to the "contents" of the communication, defined as information concerning the "substance, purport, or meaning of that communication." As a result, while the Act applies to information like the header or body of an email, the Act does not apply to non-substantive information automatically generated about the characteristics of the communication, such as IP addresses. Third, individuals do not violate the Wiretap Act if they are a "party to the communication" or received "prior consent" from one of the parties to the communication. The party-to-the-communication and consent exceptions have been subject to significant litigation; in particular, courts have often relied on the exceptions to dismiss suits alleging Wiretap Act violations due to online tracking, holding that websites or third-party advertisers who tracked users' online activity were either parties to the communication or received consent from a party to the communication. The SCA prohibits the improper access or disclosure of certain electronic communications in storage. With respect to improper access, a person violates the SCA if he obtains an "electronic communication" in "electronic storage" from "a facility through which an electronic communication service is provided" by either: (1) "intentionally access[ing] [the facility] without authorization" or (2) "intentionally exceed[ing] an authorization." Although the statute does not define the term "facility," most courts have held that the term is limited to a location where network service providers store communications. However, courts have differed over whether a personal computer is a "facility." Most courts have excluded personal computers from the reach of the SCA, but some have disagreed. With respect to improper disclosure, the SCA generally prohibits entities providing "electronic communication services" or "remote computing services" from knowingly divulging the contents of a communication while holding the communication in electronic storage. Similar to the Wiretap Act, the SCA's access and disclosure prohibitions are subject to certain exceptions. In particular, individuals do not violate the SCA if they are the sender or intended recipient of the communication or when a party to the communication consents to the access or disclosure. As with the Wiretap Act, courts have relied on these two exceptions to dismiss suits under the SCA related to online tracking. The Pen Register Act prohibits the installation of a "pen register" or "trap and trace device" without a court order. A pen register is a "device or process" that "records or decodes" outgoing "dialing, routing, addressing, or signaling information," and a trap and trace device is a "device or process" that "captures the incoming . . . dialing, routing, addressing, and signaling information." In contrast to the Wiretap Act, the Pen Register Act applies to the capture of non-content information, as the definitions of pen registers and trap and trace devices both exclude any device or process that captures the "contents of any communication." Furthermore, the Pen Register Act prohibits only the use of a pen register or trap and trace device and does not separately prohibit the disclosure of non-content information obtained through such use. The statute does, however, have several exceptions similar to those contained in the Wiretap Act and SCA. Among other things, providers of an electronic or wire communication service will not violate the Act when they use a pen register or trap and trace device in order to "protect their rights or property" or "where the consent of the user of that service has been obtained." The Wiretap Act and the SCA both provide for private rights of action. Persons aggrieved by violations of either act may bring a civil action for damages, equitable relief, and reasonable attorney's fees. For actions under the Wiretap Act, damages are the greater of: (1) actual damages suffered by the plaintiff, or (2) "statutory damages of whichever is the greater of $100 a day for each day of violation or $10,000." For actions under the SCA, damages are "the sum of the actual damages suffered by the plaintiff and the profits made by the violator," provided that all successful plaintiffs are entitled to receive at least $1,000. Violations of the Wiretap Act and SCA are also subject to criminal prosecution and can result in fines and imprisonment. In contrast, the Pen Register Act does not provide for a private right of action, but knowing violations can result in criminal fines and imprisonment. The Computer Fraud and Abuse Act (CFAA) was originally intended as a computer hacking statute and is centrally concerned with prohibiting unauthorized intrusions into computers, rather than addressing other data protection issues such as the collection or use of data. Specifically, the CFAA imposes liability when a person "intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains . . . information from any protected computer." A "protected computer" is broadly defined as any computer used in or affecting interstate commerce or communications, functionally allowing the statute to apply to any computer that is connected to the internet. Violations of the CFAA are subject to criminal prosecution and can result in fines and imprisonment. The CFAA also allows for a private right of action, allowing aggrieved individuals to seek actual damages and equitable relief, such as an injunction against the defendant. As with ECPA, internet users have attempted to use this private right of action to sue companies tracking their online activity, arguing that companies' use of tracking devices constitutes an unauthorized access of their computers. In this vein, CFAA is theoretically a more generous statute than ECPA for such claims because it requires authorization from the owner of the computer (i.e., the user), rather than allowing any party to a communication (i.e., either the user or the website visited by the user) to give consent to the access. In practice, however, such claims have typically been dismissed due to plaintiffs' failure to meet CFAA's damages threshold. Specifically, as a threshold to bring a private right of action, a plaintiff must show damages in excess of $5,000 or another specific type of damages such as physical injury or impairment to medical care. The FTC Act has emerged as a critical law relevant to data privacy and security. As some commentators have noted, the FTC has used its authority under the Act to become the "go-to agency for privacy," effectively filling in gaps left by the aforementioned federal statutes. While the FTC Act was originally enacted in 1914 to strengthen competition law, the 1938 Wheeler-Lea amendment revised Section 5 of the Act to prohibit a broad range of unscrupulous or misleading practices harmful to consumers. The Act gives the FTC jurisdiction over most individuals and entities, although there are several exemptions. For instance, the FTC Act exempts common carriers, nonprofits, and financial institutions such as banks, savings and loan institutions, and federal credit unions. The key provision of the FTC Act, Section 5, declares unlawful "unfair or deceptive acts or practices" (UDAP) "in or affecting commerce." The statute provides that an act or practice is "unfair" only if it "causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition." While the statute does not define "deceptive," the FTC has clarified in guidance that an act or practice is to be considered deceptive if it involves a material "representation, omission, or practice that is likely to mislead [a] consumer" who is "acting reasonably in the circumstances." Under the FTC Act, the agency may enact rules defining specific acts or practices as UDAPs, often referred to as "trade regulation rules" (TRRs) or "Magnuson-Moss" rulemaking. However, to enact TRRs the FTC must comply with several procedures that are not required under the notice-and-comment rulemaking procedures set forth in Section 553 of the Administrative Procedure Act (APA), which are the default rulemaking procedures for federal agencies. Among other things, these additional procedures require the FTC to publish an advance notice of proposed rulemaking (ANPRM), give interested persons an opportunity for an informal hearing, and issue a statement accompanying the rule regarding the "prevalence of the acts or practices treated by the rule." Consequently, the FTC rarely uses its TRR rulemaking authority and has not enacted any TRRs regarding data protection. Rather, as discussed further below, the agency largely uses enforcement actions to signal the types of acts and practices it considers to be impermissible UDAPs. The FTC has brought hundreds of enforcement actions against companies alleging deceptive or unfair data protection practices. Most of these actions result in companies entering into consent decrees requiring the companies to take certain measures to prevent any further violations. While these consent decrees are not legally binding on those who are not a party to them, they are significant because they reflect the type of practices that the FTC views as "unfair" or "deceptive." Indeed, some scholars view the principles arising from them as a type of "common law of privacy." Given the uniquely important role FTC enforcement plays in the U.S. data protection landscape, it is worth noting the types of data protection practices the FTC has viewed as "unfair" or "deceptive." Perhaps the most settled principle of the FTC's "common law of privacy" is that companies are bound by their data privacy and data security promises. The FTC has taken the position that companies act deceptively when they gather, use, or disclose personal information in a way that contradicts their posted privacy policy or other statements, or when they fail to adequately protect personal information from unauthorized access despite promises that that they would do so. In addition to broken promises, the FTC has alleged that companies act deceptively when they make false representations in order to induce disclosure of personal information. For example, in FTC v. Sun Spectrum Commc'ns Org., Inc. , the FTC alleged that several telemarketers acted "deceptively" by misrepresenting themselves as a credit card company and requesting personal information from individuals, ostensibly for the purpose of providing non-existent credit cards to the individuals. The FTC has further maintained that companies act deceptively when their privacy policies or other statements provide insufficient notice of their privacy practices. For instance, in In the Matter of Sears Holdings Management Co. , the FTC alleged that Sears acted deceptively by failing to disclose the extent to which downloadable software would monitor users' internet activity, merely telling users that it would track their "online browsing." Along with "deceptive claims," the FTC has also alleged that certain data privacy or data security practices may be "unfair." Specifically, the FTC has maintained that it is unfair for a company to retroactively apply a materially revised privacy policy to personal data that it collected under a previous policy. The FTC has also taken the position that certain default privacy settings are unfair. In the case FTC v. Frostwire , for example, the FTC alleged that a peer-to-peer file sharing application had unfair privacy settings because, immediately upon installation, the application would share the personal files stored on users' devices unless the users went through a burdensome process of unchecking many pre-checked boxes. With respect to data security, the FTC has more recently maintained that a company's failure to safeguard personal data may be "unfair," even if the company did not contradict its privacy policy or other statements. While at least one court has agreed that such conduct may be "unfair" under the FTC Act, a recent U.S. Court of Appeals for the Eleventh Circuit case, LabMD v. FTC , suggests that any FTC cease and desist order based on a company's "unfair" data security measures must allege specific data failures and specific remedies. In LabMD , the court noted that the FTC's order "contain[ed] no prohibitions" but "command[ed] [the company] to overhaul and replace its data-security program to meet an indeterminable standard of reasonableness." The court concluded that such an order was unenforceable, reasoning that the order "effectually charge[d] the district court [enforcing the order] with managing the overhaul." The court further suggested that penalizing a company for failing to comply with an imprecise standard "may constitute a denial of due process" because it would not give the company fair notice of the prohibited conduct. Ultimately, while LabMD did not decide whether inadequate data security measures may be "unfair" under the FTC Act, the decision is nevertheless a potentially significant limitation on the FTC's ability to remedy such violations of the statute. LabMD is also a notable case because it adds to the relatively sparse case law on the FTC Act's "unfair or deceptive" prohibition. As mentioned, the large majority of the FTC enforcement actions are settled, with parties entering into consent decrees. To the extent FTC allegations are contested, the FTC may either commence administrative enforcement proceedings or civil litigation against alleged violators. In an administrative enforcement proceeding, an Administrative Law Judge (ALJ) hears the FTC's complaint and may issue a cease and desist order prohibiting the respondent from engaging in wrongful conduct. In civil litigation, the FTC may seek equitable relief, such as injunctions or disgorgement, when a party "is violating, or is about to violate," the FTC Act. The FTC may only seek civil penalties, however, if the party has violated a cease and desist order, consent decree, or a TRR. The FTC Act does not provide a private right of action, and it does not impose any criminal penalties for violations of Section 5. Similar to the FTC Act, the CFPA prohibits covered entities from engaging in certain unfair, deceptive, or abusive acts. Enacted in 2010 as Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPA created the Consumer Financial Protection Bureau (CFPB) as an independent agency within the Federal Reserve System. The Act gives the CFPB certain "organic" authorities, including the authority to take any action to prevent any "covered person" from "committing or engaging in an unfair, deceptive, or abusive act or practice" (UDAAP) in connection with offering or providing a "consumer financial product or service." The CFPB's UDAAP authority under the CFPA is very similar to the FTC's UDAP authority under the FTC Act; indeed, the CFPA contains the same definition of "unfair" as in the FTC Act, and the CFPB has adopted the FTC's definition of "deceptive" acts or practices. However, there are several important differences. First, the CFPA's UDAAP prohibition includes "abusive" practices, as well as unfair or deceptive ones. An act or practice is abusive if it either (1) "materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service" or (2) "takes unreasonable advantage of" a consumer's (a) lack of understanding, (b) inability to protect her own interest in selecting or using a consumer financial product or service, or (c) reasonable reliance on a covered person to act in her interest. While abusive conduct may also be unfair or deceptive, abusiveness is a separate standard that may cover additional conduct. Second, the CFPA prohibits UDAAPs only in connection with offering or providing a "consumer financial product or service." A product or service meets this standard if it is one of the specific financial product or services listed in the CFPA and is offered or provided to consumers primarily for personal, family, or household purposes. Lastly, the CFPA applies only to "covered persons" or "service providers." The statute defines "covered persons" as persons who offer or provide a consumer financial product or service, and it defines "service providers" as those who provide a "material service" to a "covered person" in connection with offering or providing a consumer financial product or service. As some commentators have noted, the CFPB could follow in the FTC's footsteps and use its UDAAP authority to regulate data protection. However, the CFPB has generally been inactive in the data privacy and security space. Indeed, to date, it has brought only one such enforcement action, which involved allegations that an online payment platform, Dwolla, Inc., made deceptive statements regarding its data security practices and the safety of its online payments system. To the extent it does use its authority, the CFPB has some powerful procedural advantages in comparison with the FTC. In particular, the CFPB can enact rules identifying and prohibiting particular UDAAP violations through the standard APA rulemaking process, whereas the FTC must follow the more burdensome Magnuson-Moss rulemaking procedures. Regarding enforcement, the CFPA authorizes the CFPB to bring civil or administrative enforcement actions against entities engaging in UDAAPs. Unlike the FTC, the CFPB can seek civil penalties in all such enforcement actions, as well as equitable relief such as disgorgement or injunctions. However, as with the FTC Act, the CFPA does not provide a private right of action that would allow adversely affected individuals to sue companies violating the Act. The statute also does not impose any criminal penalties for UDAAP violations. Adding to the complex federal patchwork of data protection statutes are the laws of the fifty states. First and foremost, major regulators of privacy and data protection in the states include the courts, via tort and contract law. With respect to tort law, in addition to the "privacy" causes of action that developed at the state level during the early 20th century (discussed above), negligence and other state tort law claims serve as a means to regulate businesses that are injured from data security issues or otherwise fail to protect their customers from foreseeable harm. Contracts, implied contracts, and other commercial causes of action can also form important bulwarks for privacy. The common law, however, is not perfect: it is subject to variability from state to state, and within states, from judge to judge and jury to jury. In addition to the common law, most states have their own statutory framework which may affect data protection and the use of data by private entities. For example, many states have a consumer protection law, sometimes prohibiting unfair or deceptive practices, often referred to as "little FTC Acts." These laws, like the FTC Act, are increasingly being used to address privacy matters. In addition, each state has passed a data breach response law, requiring some form of response or imposing liability on companies in the event of a breach of their data security. While an examination of every state data security law is beyond the scope of this report, at least one state has undertaken a general and ambitious effort to regulate data security. Specifically, the California Consumer Privacy Act (CCPA), enacted in 2018, has captured significant attention. Unlike the federal patchwork provisions, neither the method of data collection nor the industry that the business operates in limits the potential application of the CCPA. Instead, the CCPA applies to any company that collects the personal information of Californians, is for-profit, does business in California, and satisfies a basic set of thresholds. Analysts have suggested that these thresholds are low enough that the law could reach a considerable number of even "relatively small" businesses with websites accessible in California. The CCPA also does not distinguish between the sources of the data that comes within its scope. Rather, the CCPA regulates all "personal information," which, by the CCPA's definition, covers nearly any information a business would collect from a consumer. The law does not require the presence of any individual identifier, such as a name or address, for data to fall within the meaning of personal information. Rather, the CCPA broadly defines personal information as "information that identifies, relates to, describes, or is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household." Following this definition, the CCPA provides some telling illustrations of what constitutes personal information, including any "electronic network activity [such as] browsing history, search history, and information regarding a consumer's interaction with an Internet Web site, application, or advertisement" and "inferences drawn from any of" this information. The CCPA provides consumers with three main "rights." The first of these is a " right to know " the information that businesses have collected or sold about them. This right requires that businesses must, in advance of any collection, "inform [by mail or electronically] consumers as to the categories of personal information to be collected and the purposes" to which the information will be put. Second, the CCPA provides consumers with the " right to opt out " of the sale of a consumer's information. Under the new law, businesses must inform consumers of this right, and if a consumer so affirmatively opts out, the business cannot again sell the consumer's information unless the consumer subsequently provides the business express authorization. Finally, the CCPA gives consumers the right, in certain circumstances, to request that a business delete any information collected about the consumer (i.e., " right to delete "). Under the law, a business that receives such a request must delete the information collected and direct its "service providers" to do the same. The primary means to enforce the CCPA are actions brought by the California Attorney General. According to the statute, businesses that fail to provide the protections required by the CCPA and fail to cure those violations within 30 days are liable for civil penalties of up to $7,500 per violation. Penalties or settlements collected under the CCPA are to be deposited with the newly created Consumer Privacy Fund, the funds for which are used only to offset costs incurred in connection with the administration of the CCPA. While the CCPA provides for a private cause of action, allowing for individual and class action lawsuits against businesses, this cause of action is only available in the case of a consumer whose "nonencrypted or nonredacted personal information" is subject to "unauthorized access and exfiltration, theft, or disclosure" as a result of a failure to "implement and maintain reasonable security procedures." Further, such actions can be brought only if a consumer provides a business with 30 days' written notice and provides the business with opportunity to cure the violation, unless the consumer suffered actual pecuniary damages. The statute does not specify how a business could "cure" a violation of this type. Consumers may obtain damages under this section of no less than $100 and no more than $750 "per incident," or actual damages, whichever is greater, as well as injunctive relief. Statements by some Members of Congress during Congressional hearings have already noted the CCPA's likely importance to future federal legislative efforts. Further, some outside commentators have argued explicitly that the CCPA should be preempted by a future federal law. These statements may be motivated by the likely fact that, if left intact, the California law could shape industry and consumer concerns both inside and outside California. First, the law is likely to be the "first in a long line of similar pieces of legislation," all of which may model themselves after the CCPA, or will have to respond to its impact. Second, even though the statute is the product of a single state, its broad jurisdictional reach would bring companies throughout the United States and from around the world into its sweep. These factors combined are likely to make the CCPA important to federal legislators. Furthermore, some of the provisions of the California law could form a model for future federal regulation—although along those lines, another potential model it has to compete with is Europe's GDPR. In addition to U.S. states like California, some foreign nations have enacted comprehensive data protection legislation. The EU, in particular, has long applied a more wide-ranging data protection regulatory scheme. Whereas privacy principles in the U.S. Constitution focus on government intrusions into private life and U.S. data privacy statutes generally are sector-specific, European privacy regulations have generally concerned any entity's accumulation of large amounts of data. As a result, foundational EU treaties provide individuals with a general right to "protection of personal data" from all potential interferences. The objective of the EU's most recent data privacy legislation—the GDPR—is to safeguard this right to personal data protection, while ensuring that data moves freely within the EU. Beginning in the 1970s, individual European countries began enacting broad, omnibus national statutes concerning data protection, privacy, and information practices. Although these domestic laws shared certain features, their differing data privacy and protection standards occasionally impeded the free flow of information between European countries. As a consequence, the EU attempted to harmonize its various national privacy laws by adopting an EU-wide data privacy and protection initiative—the 1995 Directive on the Protection of Individuals with Regard to the Processing of Personal Data and on the Free Movement of Such Data (Data Protection Directive). While the Data Protection Directive applied on an EU-wide basis, EU law authorized each member-nation to implement the directive's requirements into the country's national law. By 2012, the European Commission—the executive body of the EU —came to view differing implementations of the Data Protection Directive at the national level as problematic. The Commission concluded that a single regulation should be developed in order to eliminate the fragmentation and administrative burdens created by the directive-based system. The Commission also sought to bring EU law up to date with developments in technology and globalization that changed the way data is collected, accessed, and used. In pursuit of these goals, the EU developed and adopted the GDPR, which replaced the 1995 Data Protection Directive and went into effect on May 25, 2018. The GDPR regulates the processing of personal data that meet its territoriality requirements, discussed below. Processing includes collection, use, storage, organization, disclosure or any other operation or set of operations performed on personal data, unless an exception applies. Personal data is defined as any information relating to an identified or identifiable person, and it can include names, identification numbers, location data, IP addresses, cookies, and any other information through which an individual can be directly or indirectly identified. The GDPR applies different requirements for controllers and processors of personal data. In general, a controller determines the purposes and means of processing personal data, and a processor is responsible for processing data on behalf of a controller. From a territorial perspective, the GDPR applies to organizations that have an "establishment" in the EU and that process personal data in the context of the activities of that establishment. The GDPR does not define "establishment," but states that it "implies the effective and real exercise of activity through stable arrangements." In a pre-GDPR case, the Court of Justice of the European Union stated that the concept of establishment under the 1995 Data Protection Directive extended "to any real and effective activity—even a minimal one—exercised through stable arrangements." Entities that meet the establishment requirement are subject to the GDPR even if their data processing activities take place outside the EU. The GDPR also applies to non-EU-established entities that offer goods or services to individuals in the EU or monitor individuals' behavior in the EU. Because many businesses with an online presence offer goods and services to EU individuals, the GDPR applies to many businesses outside the EU. The GDPR lays out seven guiding principles for the processing of personal data. While these principles are not "hard and fast rules" themselves, they inform the interpretation of the GDPR and its more concrete requirements, discussed below. The GDPR requires data controllers and processors to have a lawful basis to process personal data. The regulation delineates six possible legal bases: (1) consent; (2) performance of contract; (3) compliance with a legal obligations; (4) protection of the "vital interests" (i.e., the life) of the data subject or another individual; (5) tasks carried out in the public interest (e.g., by a government entity); and (6) the "legitimate interests" of the controller or a third party, unless the fundamental rights and freedom of the data subject override those interests. Commentators describe the "legitimate interests" category as the most flexible and as the potential basis for a host of common activities, such as processing carried out in the normal course of business, provided that the processing is not unethical, unlawful, or otherwise illegitimate. When data processing is premised on consent, the consent must be freely given, specific, informed, and unambiguous, and it can be withdrawn at any time. Additional consent requirements and restrictions apply to especially sensitive data, such as children's information and data that reveals ethnic origins, political opinions, religious beliefs, union status, sexual orientation, health information, and criminal histories. The GDPR provides a series of rights to individuals and corresponding obligations for data controllers, unless an exception applies. The GDPR requires organizations to implement a range of measures designed to ensure and demonstrate that they are in compliance with the regulation. When proportionate in relation to the processing activities, such measures may include adopting and implementing data protection policies and taking a "data protection by design and default" approach whereby the organization implements compliance measures into all stages of data processing. Measures may also include the following: establishing GDPR-conforming contracts with data processors; maintaining records of processing activities; conducting impact assessments on personal data use that is likely to risk individual rights and freedoms; appointing a data protection officer; and adhering to relevant codes of conduct and compliance certification schemes. The GDPR also requires controllers and processors to implement technical and organizational measures to ensure a level of data security that is "appropriate to the risk" presented by the data processing. In implementing data security measures, organizations must consider the "state of the art, the costs of implementation," the nature, scope, and context, and purposes of processing, and the likelihood and potential severity of an infringement on individual rights if data security were to be violated. The GDPR does not impose a "one-size-fits-all" requirement for data security, and security measures that are "appropriate" (and therefore mandatory) will depend on the specific circumstances and risks. For example, a company with an extensive network system that holds a large amount of sensitive or confidential information presents greater risk, and therefore must install more rigorous data security protections than an entity that holds less data. When appropriate, organizations should consider encryption and pseudonymization —the processing of personal data such that the data can no longer be attributed to a specific individual. Security measures should ensure the confidentiality, integrity, and resilience of processing systems; be able to restore access to personal data in the event of an incident; and include a process for testing security effectiveness. In the event of a personal data breach, the GDPR requires controllers to notify the designated EU government authority "without undue delay" and no later than 72 hours after learning of the breach, unless the breach is "unlikely to result in a risk to the rights and freedoms of natural persons." For example, whereas a company must report the theft of a customer database that contains information that could be used for future identity fraud given the high level of risk to individuals, it may not need to report the loss of more innocuous data, such as a directory of staff office phone numbers. When notification to the government is required, the notification must describe the nature and likely consequences of the breach, identify measures to address the breach, and identify the employee responding to the incident. When data processors experience a breach, they must notify the controller without undue delay. In addition to governmental notification, controllers must notify the individuals whose data has been compromised if the breach is likely to result in a "high risk to the rights and freedoms" of individuals. The "high risk" threshold is higher than the threshold for notifying the government authority, but it could met in circumstances when individuals may need to take steps to protect themselves from the effects of a data breach. According to the United Kingdom's data protection regulatory authority, for example, a hospital that disclosed patient medical records as a result of a data breach may present a "high risk" to individuals, but a university that accidentally deleted, but was able to re-create, an alumni contact information database may not meet the mandatory individual reporting threshold. Notification to the individual must describe the breach in clear and plain language and contain at least the same information as provided in the governmental notifications. Notification to the individual is not required in the following cases: the controller implemented appropriate technical and organizational protection measures, such as encryption, that will render the data unintelligible; the controller took subsequent measures that will ensure that the high risk to individual rights and freedom are no longer likely to materialize; or individual notifications would involve disproportionate efforts, in which case the controller must provide public notice of the breach. Regardless of whether notification is required, controllers must document all data breaches so that government supervisory authorities can verify compliance at a later date. The EU has long regulated the transfer of data from EU member states to foreign countries, and the GDPR continues to restrict such international data transfers. Like the 1995 Data Protection Directive, the GDPR authorizes data transfer from within the EU to a non-EU country if the receiving country ensures an adequate level of protection for personal data. To meet this requirement, the non-EU country must offer a level of protection that is "essentially equivalent to that ensured" by the GDPR. If the European Commission previously made an adequacy decision under the Data Protection Directive's legal framework, that decision remains in force under the GDPR. U.S. and EU officials previously developed a legal framework—the U.S.-EU Privacy Shield—for protecting transatlantic data flow into the United States. Under the Privacy Shield framework, U.S.-based organizations self-certify to the International Trade Administration in the Department of Commerce that they will comply with the framework's requirements for protecting personal data by complying with, among other provisions, notice requirements, data retention limits, security requirements, and data processing purpose principles. In 2016, the European Commission concluded that the Privacy Shield framework provided adequate protections under the Data Protection Directive. That adequacy determination continues to apply under the GDPR, although the European Commission annually reviews whether the Privacy Shield framework continues to provide an adequate level of protection. In the absence of an adequacy decision from the European Commission, the GDPR permits data transfers outside the EU when (1) the recipient of the data has itself established appropriate safeguards , and (2) effective legal remedies exist for individuals to enforce their data privacy and protection rights. Appropriate safeguards include: a legally binding agreement between public authorities or bodies; binding corporate rules; standard contract clauses adopted by the European Commission; and approved codes of conduct and certification mechanisms. U.S. companies that do not participate in Privacy Shield often must rely on standard contract clauses to be able to receive data from the EU. The GDPR also identifies a list of circumstances in which data may be transferred outside the EU even without appropriate safeguards or an adequacy decision. These circumstances include, among other reasons, when: an individual has provided informed consent; transfer is necessary for the performance of certain contracts involving the data subject; or the transfer is necessary for important reasons of public interests. One of the most commented-upon aspects of the GDPR is its high ceiling for administrative fines. For the most serious infractions of the GDPR, regulatory bodies within individual EU countries may impose fines up to 20 million euro (approximately $22 million) or 4% of global revenue, whichever is higher, for certain violations of the GDPR. The GDPR also provides tools for individuals to enforce compliance with its terms. Individuals whose personal data is processed in a way that does not comport with the GDPR may lodge a complaint with regulatory authorities. Individuals also have the right to an "effective judicial remedy" (i.e., to pursue a lawsuit) against the responsible data processor or controller, and individuals may obtain compensation for their damages from data processors or controllers. The GDPR may be relevant to the 116th Congress' consideration of data protection initiatives in several ways. Because the GDPR applies to U.S. companies that offer goods and services to individuals in the EU, many U.S. companies have developed new data protection practices in an effort to comply with its requirements. Other businesses reported that they withdrew from the European market rather than attempt to obtain compliance GDPR. For those companies that remained in the European market, some have stated that they will apply their GDPR-compliant practices on a company-wide basis rather than changing their model only when doing business in the EU. Consequently, the GDPR already directly impacts the data protection practices of some U.S. companies. The GDPR also has served as a prototype for comprehensive data protection legislation in other governments. For example, commentators have described China's Personal Information Security Specification, which defines technical standards related to the collection, storage, use, transfer, and disclosure of personal information, as modeled on the GDPR. And the CCPA includes elements similar to the GDPR, such as an enumeration of individual rights related to data privacy. If this trend continues, GDPR-like data protection laws may become more commonplace internationally. Finally, some argue that Congress should consider enacting comprehensive federal data protection legislation similar to the GDPR. As discussed below, however, other observers and some officials in the Trump Administration have criticized the GDPR, describing the regulation as overly prescriptive and likely to result in negative unintended consequences. Regardless of the merits of these positions, the GDPR may remain a focal point of discussion in the debate over whether the United States should develop a more comprehensive data protection policy. Although some commentators argue that the federal government should supplement the current patchwork of federal data protection laws with more comprehensive legislation modeled on the CCPA or GDPR, some Trump Administration officials have criticized these legislative approaches and questioned whether they will improve data privacy outcomes. The Administration has argued that many comprehensive data privacy models have resulted in "long, legal, regulator-focused privacy policies and check boxes, which only help a very small number of users[.]" Rather than pursuing a prescriptive model in which the government defines (or prescribes) data protection rules, the Trump Administration advocates for what it describes as an outcome-based approach whereby the government focuses on the "outcomes of organizational practices, rather than on dictating what those practices should be." In September 2018, the National Telecommunications and Information Administration (NTIA) in the Department of Commerce issued a request for public comments on the Trump Administration's efforts to develop an outcome-based approach to advancing consumer privacy that also protects prosperity and innovation. According to NTIA, changes in technology have led consumers to conclude that they are losing control over their personal information, while at the same time that foreign and state privacy laws have led to a fragmented regulatory landscape that disincentives innovation. Accordingly, NTIA is attempting to develop a set of "user-centric" privacy outcomes and goals that would underpin the protections that should be produced by any federal actions related to consumer privacy. NTIA's proposed policy focuses on a set of outcomes that the Trump Administration seeks to achieve: In addition to identifying desired outcomes, NTIA's request for public comments states that the Trump Administration is in the process of developing "high-level goals for Federal action" related to data privacy. NTIA's proposed privacy framework shares certain elements of prescriptive legal regimes like the GDPR and CCPA. Common features include a right to withdraw consent to certain uses of personal data; accountability for third-party vendors and servicers; and a right to access, amend, complete, correct, or delete personal data. But NTIA's request for public comments does not specifically describe how the Trump Administration intends to accomplish its outcomes and goals. Instead, it states that NTIA "understand[s] that there is considerable work to be done to achieve" the identified objectives. The comment period closed on November 9, 2018, and NTIA received input from more than 200 individuals and entities. The debate over whether Congress should consider federal legislation regulating data protection implicates numerous legal variables and options. "Data protection" itself is an expansive concept that melds the fields of data privacy (i.e., how to control the collection, use, and dissemination of personal information) and data security (i.e., how to protect personal information from unauthorized access or use and respond to such unauthorized access or use). There is no single model for data protection legislation in existing federal, state, or foreign law. For example, some state laws focus solely on data security or address a particular security concern, such as data breach notifications. Other state laws isolate a single privacy-related issue, such as the transparency of data brokers—companies that aggregate and sell consumers' information, but that often do not have a direct commercial relationship with consumers. Recent data protection laws such as the CCPA and GDPR appear to indicate a trend toward combining data privacy and security into unified legislative initiatives. These unified data protection paradigms typically are structured on two related features: (1) an enumeration of statutory rights given to individuals related to their personal information and (2) the creation of legal duties imposed on the private entities that possess personal information. The specific list and nature of rights and duties differ depending on the legislation, and some have proposed to define new rights in federal legislation that do not have a clear analog in existing state or foreign law. Consequently, at present, there is no agreed-upon menu of data protection rights and obligations that could be included in federal legislation. Although data protection laws and proposals are constantly evolving, some frequently discussed legal rights include: the right to know what personal data is being collected, used, and disseminated, and how those activities are occurring; the right to control the use and dissemination of personal data, which may include the right to opt out or withhold consent to the collection or sharing of such data; the right to review personal data that has been collected and to delete or correct inaccurate information; the right to obtain a portable copy of personal data; the right to object to improper activities related to personal data; and the right to learn when a data breach occurs; Commonly discussed obligations for companies that collect, use, and disseminate personal data include rules defining: how data is collected from individuals; how companies use data internally; how data is disseminated or disclosed to third parties; what information companies must give individuals related to their data; how data is kept secure; when breaches of security must be reported; the accuracy of data; and reporting requirements to ensure accountability and compliance. Whether to enact federal data protection legislation that includes one or more of these rights and obligations has been the subject of a complex policy debate and multiple hearings in recent Congresses. Part of the legislative debate concerns how to enforce such rights and obligation and raises questions over the role of federal agencies, state attorneys general, and private citizen suits. In addition, some elements of the data protection proposals and models could implicate legal concerns and constitutional limitations. While the policy debate is outside the scope of this report, the following sections discuss legal considerations relevant to federal data protection proposals that the 116th Congress may choose to consider. These sections begin by analyzing legal issues related to the internal structure and definition of data protection-related rights and obligations and then move outward toward an examination of external legal constraints. A primary conceptual point of debate concerning data protection legislation is whether to utilize the so-called "prescriptive" method or an "outcome-based" approach to achieve a particular law's objectives. Under the prescriptive approach, the government defines data protection rules and requires regulated individuals and entities to comply with those rules. Both the GDPR and CCPA use a prescriptive approach, and some legislation proposed in the 116th Congress would use this method by delineating certain data protection requirements. The Trump Administration, however, has argued that a prescriptive approach can stymie innovation and result in compliance checklists without providing measurable privacy benefits. As an alternative methodology, the Administration advocated for what it described as an outcome-based approach whereby the government focuses on the outcomes of organizational practices, rather than defining the practices themselves. Some federal information technology laws, such as the Federal Information Security Management Act (FISMA), use an outcome-oriented approach to achieve federal objectives, although agency implementation of such laws may become prescriptive in nature. The Administration has not specified how it intends to achieve its desired data protection goals without prescribing data protection rules, but additional direction appears to be forthcoming, according to the NTIA's request for public comment. Another issue that may be considered in crafting federal data protection policy is how to define the contours of the data that the federal government proposes to protect or the specific entities or industries that it proposes to regulate. The patchwork of existing data protection statutes define protected information in a variety of ways, many of which depend on the context of the law. For example, HIPAA is limited to "protected health information" and GLBA governs "financial information" that is personally identifiable but not publicly available. By contrast, GDPR and CCPA regulate all "personal" information—a term defined in both laws as information that is associated with a particular individual or is capable of being associated with an individual. Some federal data proposals would apply a similar scope to those of the GDPR and CCPA. If enacted, such broad data protection laws have the potential to create multiple layers of federal data protection requirements: (1) general data protection requirements for "personal" information and (2) sector-specific requirements for data regulated by the existing "patchwork" of data protection laws. Other legislative proposals have sought to avoid dual layers of regulations by stating that the proposed data protection requirements would not apply to individuals or entities covered by certain existing federal privacy laws. Agency enforcement is another key issue to consider when crafting any future federal data protection legislation. As discussed, under the current patchwork of federal data protection laws, there are multiple federal agencies responsible for enforcing the myriad federal statutory protections, such as the FTC, CFPB, FCC, and HHS. Of these agencies, the FTC is often viewed—by industry representatives, privacy advocates, and FTC commissioners themselves —as the appropriate primary enforcer of any future national data protection legislation, given its significant privacy experience. There are, however, several relevant legal constraints on the FTC's enforcement authority. First, the FTC generally lacks the ability to issue fines for first-time offenses. In UDAP enforcement actions, the FTC may issue civil penalties only in certain limited circumstances, such as when a person violates a consent decree or a cease and desist order. Consequently, the FTC often enters into consent decrees addressing a broad range of conduct, such as a company's data security practices, seeking penalties for violations of those decrees. However, as the LabMD case discussed earlier in this report suggests, if the FTC imposes penalties based on imprecise legal standards provided in a rule or order, the Due Process Clause of the Fifth Amendment may constrain the agency's authority. Second, the plain text of the FTC Act deprives the FTC of jurisdiction over several categories of entities, including banks, common carriers, and nonprofits. Third, the FTC generally lacks authority to issue rules under the APA's notice-and-comment process that is typically used by agencies to issue regulations. Rather, the FTC must use a more burdensome—and, consequently, rarely used—process under the Magnuson-Moss Warranty Act. As some FTC Commissioners and commentators have noted, these legal limitations may be significant in determining the appropriate federal enforcement provisions in any national data security legislation. While Congress may not be able to legislate around constitutional constraints, future legislation could address some of these limitations—for instance, by allowing the FTC to seek penalties for first-time violations of rules, expanding its jurisdictions to include currently excluded entities, or providing the FTC notice-and-comment rulemaking authority under the APA. These current legal constraints on FTC authority may also be relevant in determining whether national legislation should allow private causes of action or enforcement authority for state attorneys general, as some commentators have suggested that private causes of action and enforcement by state attorneys general are essential supplements to FTC enforcement. Legislation involving privacy may propose to allow individuals to seek private remedy for violations in the courts. Congress may seek to establish a private right of action allowing a private plaintiff to bring an action against a third party based directly on that party's violation of a public statute. As it has done with many sector-specific privacy laws, Congress, in a data protection statute, could provide not only for this right, but also for specific remedies beyond compensatory damages, such as statutory damages or even treble damages for injured individuals. However, it may be very difficult to prove that someone has been harmed in a clear way by many of the violations that might occur under a hypothetical data protection and privacy regime. Victims of data breaches and other privacy violations, generally speaking, do not experience clear and immediate pecuniary or reputational harm. This obstacle might threaten not only a consumer's ability to obtain monetary relief, but also could run up against the limits of the federal courts' "judicial power" under Article III of the U.S. Constitution. Article III extends the judicial power of the federal courts to only "cases" and "controversies." As part of that limitation, the Supreme Court has stated that courts may adjudicate a case only where a litigant possesses Article III standing. A party seeking relief from a federal court must establish standing. Specifically, the party must show that he has a genuine stake in the relief sought because he has personally suffered (or will suffer): (1) a concrete, particularized and actual or imminent injury; (2) that is traceable to the allegedly unlawful actions of the opposing party; and (3) that is redressable by a favorable judicial decision. These requirements, particularly the requirement of "imminence," form significant barriers for lawsuits based on data protection. Imminence, according to the Supreme Court in Clapper v. Amnesty International , requires that alleged injury be " certainly impending " to constitute injury-in-fact. Speculation and assumptions cannot be the basis of standing. This reasoning has caused courts to dismiss data breach claims where plaintiffs cannot show actual misuse of data, but can only speculate that future thieves may someday cause them direct harm. These requirements are constitutional in nature and apply regardless of whether a statute purports to give a party a right to sue. This constitutional requirement limits Congress' ability to use private rights of action as an enforcement mechanism for federal rights, as the recent Supreme Court case Spokeo, Inc. v. Robins illustrates. Spokeo involved a Federal Credit Reporting Act (FCRA) lawsuit brought by Thomas Robins against a website operator that allowed users to search for particular individuals and obtain personal information harvested from a variety of databases. Robins alleged that Spokeo's information about him was incorrect, in violation of the FCRA requirement that consumer reporting agencies "follow reasonable procedures to assure maximum possible accuracy" of consumer reports. As discussed earlier in this report, FCRA provides for a private right of action making any person who willfully fails to comply with its requirements liable to individuals for, among other remedies, statutory damages. The lower court understood that Robins did not specifically allege any actual damages he had suffered, such as the loss of money resulting from Spokeo's actions. Nonetheless, the court concluded that the plaintiff had standing to seek statutory damages because his injury was sufficiently particular to him—FCRA had created a statutory right for Robins and his personal interest was sufficient for standing. The Supreme Court disagreed with the lower court, however, explaining that the lower court had erred by eliding the difference between Article III's "concreteness" and "particularization" requirements. Specifically, the Court concluded that a plaintiff must demonstrate a concrete injury separate from a particularized injury, meaning that plaintiffs must show that their injury "actually exist[s]." While tangible injuries, like monetary loss, are typically concrete, a plaintiff with an "intangible injury" must show that it is "real" and not "abstract" in order to demonstrate concreteness. For example, the Spokeo Court suggested that the mere publication of an incorrect zip code, although it could violate FCRA, would not be a sufficiently concrete injury for standing purposes. As a result, the Court remanded the case to the lower court to determine if the injury alleged in the case was both particularized and concrete. Spokeo does not eliminate Congress' role in creating standing where it might not otherwise exist. The Supreme Court explained that the concreteness requirement is "grounded in historical practice" and, as a result, Congress' judgment on whether an intangible harm is sufficiently concrete can be "instructive." However, as Spokeo explained, Congress cannot elevate every privacy violation to the status of a concrete injury. Both before and after Spokeo , the lower courts have resolved standing disputes in lawsuits involving privacy and data protection, where parties argue about whether particular injuries are sufficiently concrete for purpose of Article III. Congress can possibly resolve some of these disputes by elevating some otherwise intangible injuries to concrete status. But Spokeo illustrates that there may be a residuum of harmless privacy violations for which Congress cannot provide a judicial remedy. Another legal issue Congress may need to consider with respect to any federal program involving data protection and privacy is how to structure the federal-state regime—that is, how to balance whatever federal program is enacted with the programs and policies in the states. Federal law, under the Supremacy Clause, has the power to preempt or displace state law. As discussed above, there are a host of different state privacy laws, and some states have begun to legislate aggressively in this area. The CCPA in particular represents a state law that is likely to have a national effect. Ultimately, unless Congress chooses to occupy the entire field of data protection law, it is likely that the state laws will end up continuing to have a role in this area. Further, given that the states are likely to continue to experiment with legislation, the CCPA being a prime example, it is likely that preemption will be a highly significant issue in the debate over future federal privacy legislation. As the Supreme Court has recently explained, preemption can take three forms: "conflict," "express," and "field." Conflict preemption requires any state laws that conflict with a valid federal law to be without effect. Conflict preemption can occur when it is impossible for a private party to simultaneously comply with both federal and state requirements, or when state law amounts to an obstacle to the accomplishment of the full purposes of Congress. Express preemption occurs when Congress expresses its intent in the text of the statute as to which state laws are displaced under the federal scheme. Finally, field preemption occurs when federal law occupies a 'field' of regulation "so comprehensively that it has left no room for supplementary state legislation." Ultimately, the preemptive scope of any federal data protection legislation will turn on the "purpose" of Congress and the specific language used to effectuate that purpose. If Congress seeks to adopt a relatively comprehensive system for data protection, perhaps the most obvious means to preempt a broad swath of state regulation would be to do so "expressly" within the text of the statute by including a specific preemption provision in the law. For example, several existing federal statutes expressly preempt all state law that "relate to" a particular subject matter. The Supreme Court has held that this "related to" language encompasses any state law with a "connection with, or reference to" the subject matter referenced. Similar language can be used to displace all state laws in the digital data privacy sphere to promote a more uniform scheme. Congress could alternatively take a more modest approach to state law. For example, Congress could enact a data protection framework that expressly preserves state laws in some ways and preempts them in others. A number of federal statutes preempt state laws that impose standards "different from" or "in addition to" federal standards, or allow the regulator in charge of the federal scheme some authority to approve certain state regulations. These approaches would generally leave intact state schemes parallel to or narrower than the federal scheme. For example, a statute could permit a state to provide for additional liability or different remedies for violation of a federal standard. Congress could do the same with federal data protection legislation, using statutory language to try to ensure the protection of the provisions of state law that it sought to preserve. Although legislation on data protection could take many forms, several approaches that would seek to regulate the collection, use, and dissemination of personal information online may have to confront possible limitations imposed by the First Amendment of the U.S. Constitution. The First Amendment guarantees, among other rights, "freedom of speech." Scholars have split on how the First Amendment should be applied to proposed regulation in the data protection sphere. In one line of thinking, data constitutes speech, and regulation of this speech, even in the commercial context, should be viewed skeptically. Other scholars have argued that an expansive approach would limit the government's ability to regulate ordinary commercial activity, expanding the First Amendment beyond its proper role. This scholarly debate informs the discussion, but does not provide clear guidance on how to consider any particular proposed regulation. The Supreme Court has never interpreted the First Amendment as prohibiting all regulation of communication. Instead, when confronting a First Amendment challenge to a regulation, a court asks a series of questions in order to determine whether a particular law or rule runs afoul of the complicated thicket of case law that has developed in this area. The first question courts face when considering a First Amendment challenge is whether the challenged regulation involves speech or mere non-expressive conduct. As the Supreme Court has explained, simply because regulated activity involves "communication" does not mean that it comes within the ambit of the First Amendment. Where speech is merely a "component" of regulated activity, the government generally can regulate that activity without inviting First Amendment scrutiny. For example, "a law against treason…is violated by telling the enemy the Nation's defense secrets," but that does not bring the law within the ambit of First Amendment scrutiny. Assuming the regulation implicates speech rather than conduct, it typically must pass First Amendment scrutiny. However, not all regulations are subject to the same level of scrutiny. Rather, the Court has applied different tiers of scrutiny to different types of regulations. For example, the Court has long considered political and ideological speech at the "core" of the First Amendment—as a result, laws which implicate such speech generally are subject to strict scrutiny. Pursuant to this standard, the government must show that such laws are narrowly tailored to serve a compelling state interest. By contrast, the Court has historically applied less rigorous scrutiny to laws regulating "commercial speech." Commercial speech is subject to a lower level of scrutiny known as the Central Hudson test, which generally requires the government to show only that its interest is "substantial" and that the regulation "directly advances the governmental interest asserted" without being "more extensive than necessary to serve that interest." These principles have provided general guidance to lower courts in deciding cases that intersect with data protection, but implicit disagreements between these courts have repeatedly demonstrated the difficulty in striking the balance between First Amendment interests and data-protection regulation. For example, in 2001 in Trans Union Corp. v. FTC , the D.C. Circuit upheld an FTC order that prohibited Trans Union from selling marketing lists containing the names and addresses of individuals. The court assumed that disclosing or using the marketing lists was speech, not conduct, but concluded that the FTC's restrictions on the sale of the marketing lists generally concerned "no public issue," and, as such, was subject to "reduced constitutional protection." The court derived its "no public issue" rule from the Supreme Court's case law on defamation, which generally views speech that is solely in the private interest of the speaker as being subject to lower First Amendment protection from defamation suits than speech regarding matters of a public concern. Applying this "reduced constitutional protection" to the context of Trans Union's marketing lists, the court determined that the regulations were appropriately tailored. While the Trans Union court did not cite to Central Hudson , other courts have gone on to apply similar reasoning to uphold data protection laws from constitutional challenge under the ambit of Central Hudson 's commercial speech test. In contrast with the relatively lenient approach applied to a privacy regulation in Trans Union , in U.S. West v. FCC , the Tenth Circuit struck down FCC regulations on the use and disclosure of Consumer Proprietary Network Information (CPNI). The regulations stated that telecommunications carriers could use or disclose CPNI only for the purpose of marketing products to customers if the customer opted in to this use. The court determined that these provisions regulated commercial speech because they limited the ability of carriers to engage in consumer marketing. Applying Central Hudson , the court held that although the government alleged a general interest in protecting consumer privacy, this interest was insufficient to justify the regulations. The panel ruled that the regulations did not materially advance a substantial state interest because the government failed to tie the regulations to specific and real harm, supported by evidence. The court also concluded that a narrower regulation, such as a consumer opt-out, could have served the same general purpose. After the Tenth Circuit's decision in U.S. West , the FCC responded by making minor changes to its regulations, maintaining some elements of the opt-in procedure for the use of CPNI and reissuing them with a new record. After this reissuance, the D.C. Circuit considered these modified-but-similar regulations in a 2009 case. In that case, the D.C. Circuit upheld the regulations without attaching much significance to the FCC's changes, and apparently implicitly disagreeing with the Tenth Circuit about both the importance of the privacy interest at stake and whether the opt-in procedure was proportional to that interest. The Supreme Court's first major examination of the First Amendment in this context came in 2011. That year, the Court decided Sorrell v. IMS Health, Inc. , a case that is likely to be critical to understanding the limits of any future data protection legislation. In Sorrell , the Court considered the constitutionality of a Vermont law that restricted certain sales, disclosures, and uses of pharmacy records. Pharmaceutical manufacturers and data miners challenged this statute on the grounds that it prohibited them from using these records in marketing, thereby imposing what they viewed to be an unconstitutional restriction on their protected expression. Vermont first argued that its law should be upheld because the "sales, transfer, and use of prescriber-identifying information" was mere conduct and not speech. The Court explained that, as a general matter, "the creation and dissemination of information are speech within the meaning of the First Amendment," and thus there was "a strong argument that prescriber identifying information is speech for First Amendment purposes." Ultimately, however, the Court stopped short of fully embracing this conclusion, merely explaining that it did not matter whether the actual transfer of prescriber-identifying information was speech because the law nonetheless impermissibly sought to regulate the content of speech—the marketing that used that data, as well as the identities of speakers—by regulating an input to that speech. As the Court explained, the Vermont law was like "a law prohibiting trade magazines from purchasing or using ink." Second, Vermont argued that, even if it was regulating speech, its regulations passed the lower level of scrutiny applicable to commercial speech. The Court disagreed. The Court explained that the Vermont law enacted "content- and speaker-based restrictions on the sale, disclosure and use of prescriber identifying information" because it specifically targeted pharmaceutical manufacturers and prohibited certain types of pharmaceutical marketing. As the Court stated in a previous case, "[c]ontent-based regulations are presumptively invalid" because they "raise[] the specter that the Government may effectively drive certain ideas or viewpoints from the marketplace." Further, the Sorrell Court observed that the legislature's stated purpose was to diminish the effectiveness of marketing by certain drug manufacturers, in particular those that promoted brand-name drugs, suggesting to the Court that the Vermont law went "beyond mere content discrimination, to actual viewpoint discrimination." As a result, the Court concluded that some form of "heightened scrutiny" applied. Nevertheless, the Court reasoned that, even if Central Hudson 's less rigorous standard of scrutiny applied, the law failed to meet that standard because its justification in protecting physician privacy was not supported by the law's reach in allowing prescriber-identifying information's use "for any reason save" marketing purposes. Most of the lower courts outside the data protection and privacy context that have considered Sorrell have held that Sorrell 's reference to "heightened scrutiny" did not override the Central Hudson test in commercial speech cases, even where those cases include content- or speaker- based restrictions. Others, however, have held that content- and speaker-based restrictions must comport with something more rigorous than the traditional Central Hudson test, but it is not clear what this new standard requires or where it leads to a different outcome than Central Hudson . As a result, while Sorrell 's impact on privacy and data protection regulation has been considered by a few courts, no consensus exists on the impact it will have. However, a few commentators have observed that the case will likely have an important effect on the future of privacy regulation, if nothing else, by having all but concluded that First Amendment principles apply to the regulation of the collection, disclosure, and use of personally identifiable information as speech, not conduct. With respect to such future regulation, policymakers will likely want, at the minimum, to meet the Central Hudson requirement of ensuring that any restrictions on the creation, disclosure or use of information are justified by a substantial interest and that the regulations are no more extensive than necessary to further that interest. To illustrate, the Court in Sorrell identified HIPAA as a permissible "privacy" regulation because it allowed "the information's sale or disclosure in only a few narrow and well-justified circumstances." This dictum suggests that Congress is able to regulate in the data protection sphere as long as it avoids the pitfalls of the law in Sorrell . However, it may not always be easy to determine whether any given law involves speaker or content discrimination. In Sorrell itself, for instance, three dissenting Justices argued that the content and speaker discrimination that took place under the Vermont law was inevitable in any economic regulation. As a result, resolving these issues as data privacy legislation becomes more complex is likely to create new challenges for legislators. The current legal landscape governing data protection in the United States is complex and highly technical, but so too are the legal issues implicated by proposals to create unified federal data protection policy. Except in extreme incidents and cases of government access to personal data, the "right to privacy" that developed in the common law and constitutional doctrine provide few safeguards for the average internet user. Although Congress has enacted a number of laws designed to augment individual's data protection rights, the current patchwork of federal law generally is limited to specific industry participants, specific types of data, or data practices that are unfair or deceptive. This patchwork approach also extends to certain state laws. Seeking a more comprehensive data protection system, some governments—such as California and the EU—have enacted wide-ranging laws regulating many forms of personal data. Some argue that Congress should consider creating similar protections in federal law, but others have criticized the EU's and California's approach to data protection. Should the 116th Congress consider a comprehensive federal data protection program, its legislative proposals may involve numerous decision points and legal considerations. An initial decision point is the scope and nature of any legislative proposal. There are numerous data protection issues that could be addressed in any future legislation, and different possible approaches for addressing those issues (such as using a "prescriptive" or "outcome-based" approach). Other decision points may include defining the scope of any protected information and determining the extent to which any future legislation should be enforced by a federal agency. Further, to the extent Congress wants to allow individuals to enforce data protection laws and seek remedies for the violations of such laws in court, it must account for Article III's standing requirements. Under the Supreme Court's 2016 Spokeo Inc. v. Robins decision, plaintiffs must experience more than a "bare procedural violation" of a federal privacy law to satisfy Article III and to sue to rectify a violation of that law. Federal preemption also raises complex legal questions—not only of whether to preempt state law, but what form of preemption Congress should employ. Finally, from a First Amendment perspective, Supreme Court jurisprudence suggests that while some "privacy" regulations are permissible, any federal law that restricts protected speech, particularly if it targets specific speakers or content, may be subject to more stringent review by a reviewing court.
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Recent high-profile data breaches and other concerns about how third parties protect the privacy of individuals in the digital age have raised national concerns over legal protections of Americans' electronic data. Intentional intrusions into government and private computer networks and inadequate corporate privacy and cybersecurity practices have exposed the personal information of millions of Americans to unwanted recipients. At the same time, internet connectivity has increased and varied in form in recent years. Americans now transmit their personal data on the internet at an exponentially higher rate than in the past, and their data are collected, cultivated, and maintained by a growing number of both "consumer facing" and "behind the scenes" actors such as data brokers. As a consequence, the privacy, cybersecurity and protection of personal data have emerged as a major issue for congressional consideration. Despite the rise in interest in data protection, the legislative paradigms governing cybersecurity and data privacy are complex and technical, and lack uniformity at the federal level. The constitutional "right to privacy" developed over the course of the 20th century, but this right generally guards only against government intrusions and does little to shield the average internet user from private actors. At the federal statutory level, there are a number of statutes that protect individuals' personal data or concern cybersecurity, including the Gramm-Leach-Bliley Act, Health Insurance Portability and Accountability Act, Children's Online Privacy Protection Act, and others. And a number of different agencies, including the Federal Trade Commission (FTC), the Consumer Finance Protection Bureau (CFPB), and the Department of Health and Human Services (HHS), enforce these laws. But these statutes primarily regulate certain industries and subcategories of data. The FTC fills in some of the statutory gaps by enforcing a broad prohibition against unfair and deceptive data protection practices. But no single federal law comprehensively regulates the collection and use of consumers' personal data. Seeking a more fulsome data protection system, some governments—such as California and the European Union (EU)—have recently enacted privacy laws regulating nearly all forms of personal data within their jurisdictional reach. Some argue that Congress should consider creating similar protections in federal law, but others have criticized the EU and California approaches as being overly prescriptive and burdensome. Should the 116th Congress consider a comprehensive federal data protection law, its legislative proposals may involve numerous decision points and legal considerations. Points of consideration may include the conceptual framework of the law (i.e., whether it is prescriptive or outcome-based), the scope of the law and its definition of protected information, and the role of the FTC or other federal enforcement agency. Further, if Congress wants to allow individuals to enforce data protection laws and seek remedies for the violations of such laws in court, it must account for standing requirements in Article III, Section 2 of the Constitution. Federal preemption also raises complex legal questions—not only of whether to preempt state law, but what form of preemption Congress should employ. Finally, from a First Amendment perspective, Supreme Court jurisprudence suggests that while some privacy, cybersecurity, or data security regulations are permissible, any federal law that restricts protected speech, particularly if it targets specific speakers or content, may be subject to more stringent review by a reviewing court.
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Review of Clean Air Act regulations issued under the Obama Administration, with the possibility of their modification or repeal, has been a major focus of the Trump Administration since it took office in 2017. The U.S. Environmental Protection Agency (EPA) has conducted these reviews as part of the Trump Administration's "regulatory reform" initiative under which the Administration has directed federal agencies to evaluate existing regulations and identify those that should be considered for replacement, repeal, or modification. In addition, Executive Order (E.O.) 13783 has directed EPA and other federal agencies to review existing regulations and policies that "potentially burden the development or use of domestically produced energy resources" for consistency with policies that the E.O. enumerates, and as soon as practicable, to "suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules." EPA rules to regulate greenhouse gas (GHG) emissions from power plants, cars and trucks, and the oil and gas sector have been of particular interest. EPAs regulatory actions to limit GHG emissions have relied on authority that Congress granted the agency in the Clean Air Act (CAA) Amendments of 1970. Since 2007, the Supreme Court has ruled on two separate occasions that the CAA, as amended, authorizes EPA to set standards for GHG emissions. In the first case, Massachusetts v. EPA , the Court held that GHGs are air pollutants within the CAA's definition of that term and that EPA must regulate their emissions from motor vehicles if the agency finds that such emissions cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare. Following the Court's decision, in 2009, the agency made an endangerment finding. In the second case, American Electric Power, Inc. v. Connecticut , the Court held that corporations cannot be sued for GHG emissions under federal common law, because the CAA delegates the management of carbon dioxide and other GHG emissions to EPA: "... Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation is what displaces federal common law." EPA's GHG regulations have focused on six gases or groups of gases that multiple scientific studies have linked to climate change. Of the six gases, carbon dioxide (CO 2 ), which is produced by combustion of fossil fuels and is the most prevalent, accounts for about 80% of annual emissions of the combined group when measured as CO 2 equivalents. Of the GHG emission standards promulgated by EPA, four sets of standards, which have had the broadest impacts, are discussed below: those for power plants, the oil and gas industry, trucks, and light-duty vehicles (the latter two topics are combined under the heading " Standards for Motor Vehicles "). EPA finalized GHG standards for power plants in August 2015; set GHG emission standards for oil and gas industry sources in June 2016; finalized a second round of GHG standards for trucks in August 2016; and completed a Mid-Term Evaluation (MTE) of the already promulgated GHG standards for model years 2022-2025 light-duty vehicles (cars and light trucks) in January 2017. Most of these rules are under review at EPA; the agency has proposed repeal or modification in several cases. The electricity sector has historically accounted for the largest percentage of anthropogenic U.S. CO 2 emissions, though transportation activities have more recently accounted for a slightly larger share. In 2017, the electricity sector accounted for 27.5% of total U.S. GHG emissions and transportation activities accounted for 28.9%. EPA finalized GHG (CO 2 ) emission standards under CAA Section 111 for new, existing, and modified fossil-fueled power plants in August 2015. The standards would primarily affect coal-fired units, which emit twice the amount of CO 2 that would be emitted by an equivalent natural gas combined cycle (NGCC) electric generating unit. The final rules were controversial: EPA received more than 4 million public comments as it considered the proposed standards for existing units, by far the most comments on a rulemaking in the agency's 48-year history. The Clean Power Plan (CPP), which is the rule for existing units, would set state-specific goals for CO 2 emissions or emission rates from existing fossil-fueled power plants. EPA established different goals for each state based on three "building blocks": improved efficiency at coal-fired power plants; substitution of NGCC generation for coal-fired power; and zero-emission power generation from increased renewable energy, such as wind or solar. The goals would be phased in, beginning in 2022, with final average emission rates for each state to be reached by 2030. Independently of the CPP, the period since its proposal in 2014 has seen rapid changes in the electric power industry. Coal-fired power plants have been retired in record numbers and cleaner sources of electric power (both renewable and natural-gas-fired) have taken their place. Coal, which accounted for 39% of electric power generation in 2014, declined to 28% of the total in 2018; natural gas generation rose from 28% to 35% of the total, and wind and solar from 7% to 11% in the same period. As a result of this shift in power sources, emissions of CO 2 from the electric power sector have declined faster than would have been required by the CPP. Cheap and abundant natural gas, state and federal incentives to develop wind and solar power, and tighter EPA standards for non-CO 2 emissions from coal-fired power plants have all played a role in this transition. New Source Performance Standards (NSPS) for new and modified power plants, promulgated at the same time as the CPP, would affect fewer plants, but they too are controversial, because of the technology the rule assumed could be used to reduce emissions at new coal-fired units. As promulgated in 2015, the NSPS would have relied in part on carbon capture and sequestration (CCS) technology to reduce emissions by about 20% compared to the emissions of a state-of-the-art coal-fired plant without CCS. Critics stated that CCS is a costly and unproven technology, and because of this, the NSPS would effectively have prohibited the construction of new coal-fired plants. No operating commercial U.S. power plant was capturing and storing CO 2 as of the date the rule was promulgated. (The first commercial CCS facility in the United States, the Petra Nova project at the W.A. Parish Generating Station in Texas, came on line in 2016.) For additional information on the Clean Power Plan and the 2015 NSPS, see CRS Report R44744, Clean Air Act Issues in the 115th Congress: In Brief . Implementation of the CPP has been stayed by the Supreme Court since February 2016, pending the completion of judicial review. Prior to the stay, challenges to the rule were filed with the U.S. Court of Appeals for the D.C. Circuit by more than 100 parties, including 27 states. These challenges were consolidated into a single case, West Virginia v. EPA . The D.C. Circuit heard oral argument in the case in September 2016; as of this writing, the court has not issued a decision. (For a discussion of the legal issues, see CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA .) The NSPS have also been challenged ( North Dakota v. EPA ). EPA requested (and the court granted) a pause in that litigation to give EPA time to conduct a review. Under the Trump Administration, EPA has reviewed both the CPP and the NSPS. This review concluded, among other things, that the CPP exceeded EPA's statutory authority by using measures that applied to the power sector as a whole rather than measures carried out within an individual facility. The agency therefore proposed repeal of the CPP on October 16, 2017, and a rule to replace it (the Affordable Clean Energy (ACE) rule) on August 21, 2018. The ACE rule would apply a narrower interpretation than the CPP of the best system of emission reduction (BSER), defining it as on-site heat rate improvements for existing coal-fired units. The rule would not establish a numeric performance standard for existing coal-fired units. Instead, EPA proposed a list of candidate technologies that would constitute the BSER. The ACE rule does not establish BSER for other types of existing power plants, such as natural gas single cycle or combined cycle plants or petroleum-fired plants. EPA proposed two additional actions in ACE—one to revise regulations that implement CAA Section 111(d) and another to modify an applicability determination for a CAA preconstruction permitting program for new and modified stationary sources, known as New Source Review (NSR). The former seeks to codify EPA's current legal interpretation that states have broad discretion to establish emission standards consistent with BSER. The latter would revise the NSR applicability test for certain power plants and, according to EPA, prevent NSR from discouraging the installation of energy-efficiency measures. (For more information about the ACE proposal, see CRS Report R45393, EPA's Affordable Clean Energy Proposal .) The agency also proposed to revise the NSPS on December 6, 2018. In the December 2018 proposal, EPA determined that the BSER for newly constructed coal-fired units would be the most efficient demonstrated steam cycle in combination with the best operating practices. This proposed BSER would replace the determination from the 2015 rule, which identified the BSER as partial carbon capture and storage. According to the agency, "the primary reason for this proposed revision is the high costs and limited geographic availability of CCS." Another issue of interest to Congress relates to the agency's legal basis for the 2015 NSPS, including EPA's conclusion in 2015 that power plants emit a significant amount of CO 2 . Prior to the power sector GHG rules, EPA made two findings under CAA Section 202: (1) that GHGs currently in the atmosphere potentially endanger public health and welfare and (2) that new motor vehicle emissions cause or contribute to that pollution. These findings are collectively referred to as the endangerment finding. The endangerment finding triggered EPA's duty under CAA Section 202(a) to promulgate emission standards for new motor vehicles. In the 2015 NSPS rule, EPA concluded that it did not need to make a separate endangerment finding under Section 111, which directs EPA to list categories of stationary sources that cause or contribute significantly to "air pollution which may reasonably be anticipated to endanger public health or welfare." EPA reasoned that because power plants had been listed previously under Section 111, it was unnecessary to make an additional endangerment finding for a new pollutant emitted by a listed source category. The agency also argued that, even if it were required to make a finding, electric generating units (EGUs) would meet that endangerment requirement given the significant amount of CO 2 emitted from the source category. While neither ACE nor the 2018 NSPS rule proposes to reconsider the endangerment finding or the conclusions related to the endangerment finding in the 2015 NSPS, the 2018 NSPS requested comments on these issues, "either as a general matter or specifically applied to GHG emissions." For example, EPA noted that power sector GHG emissions are declining and requested comment on whether EPA has "a rational basis for regulating CO 2 emissions from new coal-fired" units. EPA also requested comment on whether the CAA requires the agency to make an endangerment finding once for a source category or if the act requires EPA to make a new endangerment finding each time it regulates an additional pollutant from a listed source category. The NSPS revision and repeal and replacement of the CPP are still at the proposal stage. Revising, repealing, or replacing a promulgated rule require the agency to follow the administrative steps involved in proposing and promulgating a new rule, including allowing public comment, and responding to significant comments upon promulgation of a final rule. Following promulgation, the repeal action, revisions, and replacement rules are subject to judicial review. A large group of stakeholders, including some states, are seen as likely to oppose the changes associated with repealing the CPP and replacing it with ACE. The EPA and judicial processes could be short-circuited by Congress, through legislation overturning, modifying, or affirming the CPP or NSPS. Congressional action is considered unlikely, however, as the threat of a filibuster, requiring 60 votes to proceed, could prevent Senate action. The new House majority has expressed a strong interest in addressing climate change. As a result, oversight hearings are considered likely as EPA finalizes actions on the ACE rule and NSPS. On June 3, 2016, EPA promulgated a suite of New Source Performance Standards (NSPS) under CAA Section 111 to set controls for the first time on methane emissions from sources in the crude oil and natural gas production sector and the natural gas transmission and storage sector. The rule builds on the agency's 2012 NSPS for volatile organic compound (VOC) emissions and would extend controls for methane and VOC emissions beyond the existing requirements to include new or modified hydraulically fractured oil wells, pneumatic pumps, compressor stations, and leak detection and repair at well sites, gathering and boosting stations, and processing plants. The Obama Administration stated that the rule was a key component under the "Climate Action Plan," and that the plan's Strategy to Reduce Methane Emissions was needed to set the United States on track to achieve the Administration's goal to cut methane emissions from the oil and gas sector by 40%-45% from 2012 levels by 2025, and to reduce all domestic GHG emissions by 26%-28% from 2005 levels by 2025. Methane—the key constituent of natural gas—is a potent greenhouse gas with a global warming potential (GWP) more than 25 times greater than that of carbon dioxide (CO 2 ). According to EPA's Inventory of U.S. Greenhouse Gas Emissions and Sinks , methane is the second most prevalent GHG emitted in the United States from human activities, and over 25% of those emissions come from oil production and the production, transmission, and distribution of natural gas. EPA projected that the standards for new, reconstructed, and modified sources would reduce methane emissions by 510,000 tons in 2025, the equivalent of reducing 11 million metric tons of CO 2 . In conjunction with the proposal, EPA conducted a Regulatory Impact Analysis (RIA) that looked at the illustrative benefits and costs of the proposed NSPS: in 2025, EPA estimated the rule will have costs of $530 million and climate benefits of $690 million (in constant 2012 dollars). The rule would also reduce emissions of VOCs and hazardous air pollutants (HAPs). EPA was not able to quantify the benefits of the VOC/HAP reductions. The methane rule is among the rules subject to review under E.O. 13783, signed by President Trump on March 28, 2017. Section 7 of the E.O. directed EPA to review the rule for consistency with policies that the E.O. enumerates, and, if appropriate, as soon as practicable, to "suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules." On March 12, 2018, EPA published a final rule to make two "narrow" revisions to the 2016 NSPS. The rule removes the requirement that leaking components be repaired during unplanned or emergency shutdowns and provides separate monitoring requirements for well sites located on the Alaskan North Slope. On October 15, 2018, EPA proposed a larger set of amendments to the 2016 NSPS. The proposed changes would decrease the frequency for monitoring fugitive emissions at well sites and compressor stations; decrease the schedule for making repairs; expand the technical infeasibility provision for pneumatic pumps to all well sites; and amend the professional engineer certification requirements to allow for in-house engineers. Upon the proposal's release, the agency stated that it "continues to consider broad policy issues in the 2016 rule, including the regulation of greenhouse gases in the oil and natural gas sector," and that "these issues will be addressed in a separate proposal at a later date." The comment period for the proposed amendments closed on December 17, 2018. (For more discussion, see CRS Report R42986, Methane and Other Air Pollution Issues in Natural Gas Systems , by Richard K. Lattanzio.) Controversy regarding GHG standards promulgated by the Obama EPA for new motor vehicles has surfaced under the Trump Administration. In May 2009, President Obama reached agreement with major U.S. and foreign auto manufacturers, the state of California (which has separate authority to set motor vehicle emission standards, if EPA grants a waiver), and other stakeholders regarding the substance of GHG emission and related fuel economy standards. A second round of standards for cars and light trucks, promulgated in October 2012, was also preceded by an agreement with the auto industry and key stakeholders. Under the agreements, EPA, the U.S. Department of Transportation (DOT, which has authority to set fuel economy standards), and California would establish "One National Program" for GHG emissions and fuel economy. The auto industry supported national standards, in part, to avoid having to meet standards on a state-by-state basis. The second round of GHG standards for cars and light trucks is being phased in over model years (MY) 2017-2025. It would reduce GHG emissions from new light-duty vehicles (i.e., cars, SUVs, crossovers, minivans, and most pickup trucks) by about 50% compared to 2010 levels, and average fuel economy will rise to nearly 50 miles per gallon (mpg) when fully phased in, in 2025. As part of the rulemaking, EPA made a commitment to conduct a Mid-Term Evaluation (MTE) for the MY2022-2025 standards by April 2018. The agency deemed an MTE appropriate given the long time frame at issue, with the final standards taking effect as long as 12 years after promulgation. Through the MTE, EPA was to determine whether the standards for MYs 2022-2025 were still appropriate given the latest available data and information, with the option of strengthening, weakening, or retaining the standards as promulgated. On November 30, 2016, EPA released a proposed determination under the MTE stating that the MY2022-2025 standards remained appropriate and that a rulemaking to change them was not warranted. EPA based its findings on a Technical Support Document, a previously released Draft Technical Assessment Report (which was issued jointly by EPA, DOT, and the California Air Resources Board [CARB]), and input from the auto industry and other stakeholders. The proposed determination opened a public comment period that ran through December 30, 2016. On January 12, 2017, the EPA Administrator made a final determination to retain the MY2022-2025 standards as originally promulgated. The final action arguably accelerated the timeline for the MTE (which called for a final determination by April 2018), and EPA announced it separately from any DOT or California announcement. EPA noted its "discretion" in issuing a final determination, saying that the agency "recognizes that long-term regulatory certainty and stability are important for the automotive industry and will contribute to the continued success of the national program." Some auto manufacturer associations and other industry groups criticized the results of EPA's review and reportedly vowed to work with the Trump Administration to revisit EPA's determination. These groups sought actions such as easing the MY2022-2025 requirements or better aligning DOT's and EPA's standards. The Trump Administration reopened the MTE in mid-March 2017. On April 2, 2018, EPA released a revised final determination, stating that the MY2022-2025 standards are "not appropriate in light of the record before EPA and, therefore, should be revised." The notice stated that the January 2017 final determination was based on "outdated information, and that more recent information suggests that the current standards may be too stringent." Following the revised final determination, on August 24, 2018, EPA and DOT proposed amendments to the existing fuel economy and GHG emission standards. The proposal offers eight alternatives. The agencies' preferred alternative, if finalized, is to retain the existing standards through MY2020 and then to freeze the standards at this level for both programs through MY2026. The preferred alternative also removes the current CO 2 equivalent air conditioning refrigerant leakage, nitrous oxide, and methane requirements after MY2020. The proposed standards would lead to an estimated average fuel economy of 37 mpg for MY2020-2026 vehicles, causing a projected increase in fuel consumption of about 0.5 million barrels per day (equivalent to about 186,000 metric tons of carbon dioxide per day), according to EPA and DOT. The agencies project a net benefit from revising the standards, relying on new estimates of compliance costs, fatalities, and injuries. The proposed standards were subject to public comment for 60 days following their publication in the Federal Register . Until the new rulemaking is completed, the standards promulgated in 2012 remain in effect. (For additional information, see CRS Report R45204, Vehicle Fuel Economy and Greenhouse Gas Standards: Frequently Asked Questions , by Richard K. Lattanzio, Linda Tsang, and Bill Canis.) Further, under the proposal, EPA aims to withdraw California's CAA preemption waiver for its vehicle GHG standards applicable to MYs 2021-2025. DOT contends that the Energy Policy and Conservation Act of 1975 (EPCA), which authorizes the department's fuel economy standards, preempts California's GHG emission standards. DOT argues that state laws regulating or prohibiting tailpipe CO 2 emissions are related to fuel economy and can therefore be preempted under EPCA. The agencies accepted comments on the proposal through October 26, 2018. EPA and DOT have also promulgated joint GHG emission and fuel economy standards for medium- and heavy-duty trucks, which have generally been supported by the trucking industry and truck and engine manufacturers. This rule was finalized on August 16, 2016. The new standards cover MYs 2018-2027 for certain trailers and MYs 2021-2027 for semi-trucks, large pickup trucks, vans, and all types and sizes of buses and work trucks. According to EPA, The Phase 2 standards are expected to lower CO 2 emissions by approximately 1.1 billion metric tons, save vehicle owners fuel costs of about $170 billion, and reduce oil consumption by up to 2 billion barrels over the lifetime of the vehicles sold under the program. In the Regulatory Impact Analysis accompanying the rule's promulgation, EPA projected the total cost of the Phase 2 standards at $29-$31 billion over the lifetime of MY2018-2029 trucks. The standards would increase the cost of a long haul tractor-trailer by as much as $13,500 in MY2027, according to the agency; but the buyer would recoup the investment in fuel-efficient technology in less than two years through fuel savings. In EPA's analysis, fuel consumption of 2027 model tractor-trailers will decline by 34% as a result of the rule. In general, the truck standards have been well received. The American Trucking Associations, for example, described themselves as "cautiously optimistic" that the rule would achieve its targets: "We are pleased that our concerns such as adequate lead-time for technology development, national harmonization of standards, and flexibility for manufacturers have been heard and included in the final rule." The Truck and Engine Manufacturers Association highlighted its work providing input to assure that EPA and DOT established a single national program, and concluded: "A vitally important outcome is that EPA and DOT have collaborated to issue a single final rule that includes a harmonized approach to greenhouse gas reductions and fuel efficiency improvements." Neither group filed a petition for judicial review of the rule. The only challengers were the Truck Trailer Manufacturers Association and the Racing Enthusiasts and Suppliers Coalition. In April 2017, EPA took steps to review the rule, asking the D.C. Circuit Court of Appeals to hold the legal challenge ( Truck Trailer Manufacturers Association v. EPA ) in abeyance while EPA conducts a review of the standards. The court granted EPA's request on May 8, 2017. On October 27, 2017, the D.C. Circuit Court granted the Truck Trailer Manufacturers Association's request to stay certain requirements for trailers pending the judicial review of the medium- and heavy-duty vehicles rule. The rest of the rule remains in effect. (For additional information, see CRS In Focus IF10927, Phase 2 Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles , by Richard K. Lattanzio.) The truck rule also established emission standards for vehicles manufactured from "glider kits" (truck bodies produced without a new engine, transmission, or rear axle). On November 16, 2017, EPA proposed a repeal of the emission standards and other requirements on heavy-duty glider vehicles, glider engines, and glider kits based on a proposed interpretation of the CAA. EPA's proposed repeal has not been finalized, and efforts to expedite the proposal or provide regulatory relief to the industry have been met with resistance from a number of states, environmental groups, and stakeholders in the trucking sector. EPA's fall 2018 regulatory agenda characterizes its glider rulemaking as a "long-term action," which is defined as a measure for which the agency "does not expect to have a regulatory action within" a year of publishing the agenda. (For additional information, see CRS Report R45286, Glider Kit, Engine, and Vehicle Regulations , by Richard K. Lattanzio and Sean Lowry.) Air quality has improved substantially since the passage of the CAA in 1970. Annual emissions of the six air pollutants for which EPA has set national ambient air quality standards (NAAQS)—ozone, particulate matter, sulfur dioxide, carbon monoxide, nitrogen dioxide, and lead—have declined by more than 70%, despite major increases in population, motor vehicle miles traveled, and economic activity. Nevertheless, the goal of clean air continues to elude many areas, in part because evolving scientific understanding of the health effects of air pollution has caused EPA to tighten standards for most of these pollutants. Congress anticipated that the understanding of air pollution's effects on public health and welfare would change with time, and it required, in Section 109(d) of the act, that EPA review the NAAQS at five-year intervals and revise them, as appropriate. The most widespread air quality problems involve ozone and fine particles (often referred to as "smog" and "soot," respectively). A 2013 study by researchers at the Massachusetts Institute of Technology concluded that emissions of particulate matter (PM) and ozone caused 210,000 premature deaths in the United States in 2005. Many other studies have found links between air pollution, illness, and premature mortality, as well. EPA summarizes these studies in what are called Integrated Science Assessments (ISAs) and Risk Analyses when it reviews a NAAQS. The most recent ISA for particulate matter—a draft version that EPA published as part of the PM NAAQS review currently underway—concludes that there is a "causal relationship" between total mortality and both short-term and long-term exposure to PM. The most recent ozone ISA states that there is "likely to be a causal relationship" between short-term exposures to ozone and total mortality. With input from the states, EPA identifies areas where concentrations of pollution exceed the NAAQS following its promulgation. As of March 31, 2019, 124 million people lived in areas classified as "nonattainment" for the current ozone NAAQS; 23 million lived in areas that were nonattainment for the current fine particulate matter (PM 2.5 ) NAAQS. Figure 1 identifies areas that had not attained one or more of the NAAQS as of March 31, 2019. EPA's statutorily mandated reviews of the ozone and particulate matter NAAQS are underway and may be more contentious than usual. The CAA has minimal requirements for how the agency is to conduct NAAQS reviews, leaving the details to the EPA Administrator. Congress may undertake oversight, as EPA moves forward with these reviews. EPA also intends to streamline NAAQS reviews and obtain Clean Air Scientific Advisory Committee (CASAC) advice regarding background pollution and potential adverse effects from NAAQS compliance strategies. In October 2018, EPA made an unprecedented change and eliminated the pollutant-specific scientific review panels, which have historically helped agency staff conduct the five-year reviews. Specifically, EPA disbanded the Particulate Matter Review Panel, which was appointed in 2015, and stated that it would not form an Ozone Review Panel. Instead, the seven-member CASAC is to lead "the review of science for any necessary changes" to the ozone or particulate matter NAAQS. Since then, however, some members of CASAC have raised concerns about this approach. In April 2019, the CASAC recommended that EPA either "reappoint the previous CASAC [particulate matter] panel or appoint a panel with similar expertise." Others, including former members of CASAC and previous ozone review panels, stated that the current CASAC lacks the depth and breadth of expertise required for the ozone review. Additional stakeholder views—in particular, those that may support this particular change—are not readily available. Since 2008, review of the NAAQS for ozone has sparked recurrent controversy. In 2008, EPA promulgated a more stringent ozone NAAQS, and for the first time ever, the Administrator chose a health-based standard outside the range recommended by the independent scientific review committee established by the CAA. In 2015, EPA strengthened the ozone NAAQS again. The final ozone standards were released on October 1, 2015, and appeared in the Federal Register , October 26, 2015. Areas of the United States exceeding the new NAAQS were identified on May 1 and July 17, 2018. The standards have been challenged in court; the D.C. Circuit Court of Appeals heard oral argument in the case on December 18, 2018. The 2015 revision sets more stringent standards than the 2008 ozone NAAQS, lowering both the primary (health-based) and secondary (welfare-based) standards from 75 parts per billion (ppb)—the level set in 2008—to 70 ppb. EPA has identified 52 nonattainment areas with a combined population of 124 million, where air quality exceeds the 2015 NAAQS: 201 counties or partial counties in 22 states, the District of Columbia, and 2 tribal areas. EPA's analysis of the rule's potential effects—undertaken when the rule was promulgated—showed all but 14 of the nonattainment counties could reach attainment with a 70 ppb ozone NAAQS by 2025 as a result of already promulgated standards for power plants, motor vehicles, gasoline, and other emission sources. EPA estimated the cost of meeting a 70 ppb ozone standard in all states except California at $1.4 billion annually in 2025. Because most areas in California would have until the 2030s to reach attainment, EPA provided separate cost estimates for California ($0.8 billion in 2038). These cost estimates are substantially less than widely circulated estimates from the National Association of Manufacturers (NAM) and other industry sources. (For a discussion of the differences, see CRS Report R43092, Implementing EPA's 2015 Ozone Air Quality Standards .) EPA faces a statutory deadline of October 2020 to complete a review of the ozone NAAQS and decide whether to modify or retain it. As previously noted, the agency announced plans to speed up the review process and declined to convene a scientific review panel specific to ozone. EPA is expected to grapple with issues raised during the 2015 ozone review, such as background ozone. In addition, EPA stated that it intends to seek CASAC advice regarding potential adverse effects from NAAQS compliance strategies. EPA completed its most recent review of the particulate matter NAAQS in late 2012 and promulgated revisions to strengthen the standards. During the 2012 particulate matter review, congressional deliberations focused on the regulatory costs associated with implementing more stringent standards as well as the potential impacts on economic growth, employment, and consumers. Some Members of Congress also raised concerns about potential impacts that more stringent particulate matter standards may have on industry and agricultural operations. For more information about the 2012 revision and related congressional deliberations, see CRS Report R42934, Air Quality: EPA's 2013 Changes to the Particulate Matter (PM) Standard . EPA initiated the current particulate matter review in 2014. In October 2018, EPA released a draft version of its ISA for Particulate Matter to CASAC for review and public comment. The ISA, which summarizes the scientific literature published since the last NAAQS review, serves as the scientific basis for reviewing the NAAQS. The CASAC's review of the particulate matter ISA is ongoing. In April 2019, CASAC found that EPA's Draft ISA did "not provide a sufficiently comprehensive, systematic assessment of the available science relevant to understanding the health impacts of exposure to particulate matter," and recommended "substantial revisions" to the Draft ISA. As previously noted, the CASAC also recommended that EPA reconvene a particulate matter review panel. EPA's response to these recommendations is not yet available. EPA stated that it intends to complete the particulate matter NAAQS review by December 2020. Other issues are likely to arise as EPA continues to review CAA regulations. The agency is reviewing additional regulations, among them air toxics rules applicable to power plants, brick and ceramic kilns, and industrial sources of ethylene oxide as well as NSPS rules applicable to particulate matter from wood heaters. In addition, the Renewable Fuel Standard program may be of interest to Congress, in particular Renewable Fuel Standard management, the potential impacts such management could have on the associated stakeholders, and related biofuel matters. The CAA directs EPA to promulgate emission standards for sources of the 187 hazardous air pollutants, informally referred as "air toxics," that are listed in Section 112(b). In general, these standards, known as National Emission Standards for Hazardous Air Pollutants (NESHAPs), require major sources to meet numeric emission limits that have been achieved in practice by the best performing similar sources. These standards are generally referred to as Maximum Achievable Control Technology (MACT) standards. EPA is to "review, and revise as necessary" the emission standards promulgated under Section 112(d) at least every eight years. The remainder of this section highlights some of the air toxic standards that have garnered interest in the 116 th Congress. EPA promulgated MACT standards for brick, structural clay, and ceramic clay kilns in 2015 that may garner interest in the 116 th Congress. The 2015 rulemaking established emission standards for mercury, particulate matter, acid gases, dioxins, and furans. EPA estimated the cost of the rule at $25 million annually, with monetized co-benefits three to eight times the cost. The Brick Industry Association called the proposal "a much more reasonable rule than the one EPA first envisioned several years ago," but they and others have continued to express concerns regarding the cost and achievability of the standards. Environmental groups and an association of state air pollution officials are concerned for different reasons: in their view, EPA improperly set standards under a section of the CAA that allows an alternative to the MACT requirement that generally applies to hazardous air pollutant standards. After reviewing petitions filed by industry groups and environmental groups, the D.C. Circuit in 2018 ordered EPA to revise the 2015 standards but did not vacate them. EPA's most recent National Air Toxics Assessment (NATA)—published in August 2018—concluded that ethylene oxide is carcinogenic to humans and that it "significantly contributes to potential elevated cancer risks" in some areas of the country. EPA subsequently announced it is "addressing ethylene oxide" based on the NATA results. EPA has begun to review the NESHAP for miscellaneous organic chemical manufacturing ("MON"), an industrial source category that includes facilities emitting ethylene oxide. EPA is under a court order to complete the MON NESHAP review by March 2020. Additional NESHAP regulations apply to sources of ethylene oxide. EPA has stated that it will "take a closer look" at these NEHSAPs, starting with the commercial sterilizers source category." EPA reported that it anticipates proposing any necessary revisions for the commercial sterilizer NESHAP in mid-2019 and that it will publish schedules for other rules as they are determined. Regardless of the NATA findings on ethylene oxide, the CAA requires EPA to "review, and revise as necessary" the NESHAPs promulgated under CAA 112(d) at least every eight years. EPA has not met the statutory deadline for periodic reviews of various NESHAPs, including the MON NESHAP and the commercial sterilization NESHAP, which were both due in 2014. Legislative proposals introduced in the 116 th Congress would require EPA to update NESHAPs applicable to ethylene oxide. For example, S. 458 would, among other things, direct EPA to update the MON and commercial sterilization NESHAPs within 180 days. Similarly, H.R. 1152 would, among other things, require EPA to revise the MON and commercial sterilization NESHAPs within 180 days, and to base the revision on an EPA report, "Evaluation of the Inhalation Carcinogenicity of Ethylene Oxide." EPA is reviewing the benefit-cost analysis it prepared in 2011 for the Mercury and Air Toxics (MATS) rule, raising questions about whether the agency will take additional action on the rulemaking in 2019. Promulgated in February 2012, the MATS rule established MACT standards under Section 112 of the CAA to reduce mercury and acid gases from most existing coal- and oil-fired power plants. EPA's 2011 analysis estimated that the annual benefits of the MATS rule, including the avoidance of up to 11,000 premature deaths annually, would be between $37 billion and $90 billion. Virtually all of the avoided deaths and monetized benefits come from the rule's effect on emissions of particulates, rather than from identified effects of reducing mercury and air toxics exposure. Numerous parties petitioned the courts for review of the rule, contending in part that EPA had failed to conduct a benefit-cost analysis in its initial determination that control of air toxics from electric power plants was "appropriate and necessary." In June 2015, the Supreme Court agreed with the petitioners, remanding the rule to the D.C. Circuit for further consideration. EPA prepared a supplemental "appropriate and necessary" finding based on the agency's review of the 2012 rule's estimated costs in 2016. The 2016 supplemental finding concluded that it is appropriate and necessary to regulate air toxics, including mercury, from power plants after including a consideration of the costs. As of this writing, the MATS rule remains in effect and litigation remains on hold, at the agency's request. In late 2018, however, EPA proposed to reverse the 2016 finding that it is appropriate and necessary to regulate air toxics under Section 112 ("2018 A&N proposal"). The proposal, even when finalized, would not revoke the mercury and acid gas emissions limits established in the 2012 MATS rule. That would require a separate regulatory action, which EPA has not proposed. Some Members of Congress and various stakeholder groups have raised concerns about the 2018 A&N proposal and advised against further actions that would revoke the MATS standards. For example, a bipartisan group of U.S. Senators wrote to EPA to "strongly oppose any action that could lead to the undoing" of the 2012 MATS rule and requested the agency withdraw the 2018 A&N proposal. A group of power sector trade organizations—representing all U.S. investor-owned electric companies, over 2,000 community-owned, not-for-profit electric utilities, over 900 not-for-profit electric utilities, and others—wrote to "urge that EPA leave the underlying MATS rule in place and effective" and "take no action that would jeopardize" the industry's estimated $18 billion investment in the MATS rule. Not all stakeholders have disagreed with the 2018 A&N proposal, however. Murray Energy Corporation, which describes itself as the largest privately owned U.S. coal company, testified that "MATS should never have been adopted" and "urge[d] EPA to take the only reasonable action flowing from its repudiation of the legal basis for MATS, and rescind the [2012 MATS] rule immediately." While it is unclear whether EPA will take additional action on the MATS standards, the 2018 A&N proposal reveals changes in EPA's interpretation of the CAA and use of benefit-cost analysis. EPA's analysis for the 2018 A&N proposal excludes co-benefits—the human health benefits from reductions in pollutants not targeted by MATS—from its consideration of whether MATS is "appropriate and necessary" under CAA Section 112(n). With this exclusion, the 2018 analysis finds that monetized costs outweigh monetized benefit estimates by several orders of magnitude. (For additional discussion, see CRS In Focus IF11078, EPA Reconsiders Basis for Mercury and Air Toxics Standards , by Kate C. Shouse.) In 2015, EPA published final emission standards for new residential wood heaters, including wood stoves, pellet stoves, hydronic heaters, and forced air furnaces. The 2015 wood heater regulations generated a substantial amount of interest, particularly in areas where wood is used as a heating fuel. House and Senate hearings in the 115 th Congress highlighted concerns about inadequate time to demonstrate compliance with emission standards by the 2020 deadline. Others have expressed concerns about the air quality impacts of delaying the 2020 deadline. On March 7, 2018, the House passed H.R. 1917 , which would have delayed implementation of the standards for three years. More recently, EPA proposed to add a two-year "sell-through" period for new hydronic heaters and forced-air furnaces. Specifically, EPA's proposal would allow all affected new hydronic heaters and forced-air furnaces that are manufactured or imported before the May 2020 deadline to be sold at retail through May 2022. In addition, EPA published an advance notice of proposed rulemaking (ANPR) in late 2018 on new residential wood heaters, new residential hydronic heaters, and new residential air furnaces. The 2018 ANPR does not propose specific changes to the standards, but it requests comments on various regulatory issues "in order to inform future rulemaking to improve these standards and related test methods." Citing stakeholder feedback about ways to improve implementation of the 2015 NSPS, EPA requested comment on 10 topics, including the cost and feasibility of meeting the emission limits that become effective in 2020, the timing of the 2020 compliance date, and test methods used for certification. (For additional information on the wood heater rule, see CRS Report R43489, EPA's Wood Stove / Wood Heater Regulations: Frequently Asked Questions , by James E. McCarthy and Kate C. Shouse.) The Renewable Fuel Standard (RFS) is a mandate that requires U.S. transportation fuel to contain a minimum volume of renewable fuel. The RFS is an amendment of the CAA, having been established by the Energy Policy Act of 2005 ( P.L. 109-58 ; EPAct05) and expanded in 2007 by the Energy Independence and Security Act ( P.L. 110-140 ; EISA). It is a volume mandate that increases annually, starting with 4 billion gallons in 2006 and ascending to 36 billion gallons in 2022, with the EPA determining the volume amounts post-2022. Renewable fuels that may be applied toward the mandate include transportation fuel, jet fuel, and heating oil. To be eligible as a renewable fuel under the RFS, fuels must meet certain environmental and biomass feedstock criteria. Thus far, the predominant fuel used to meet the mandate has been corn starch ethanol. At issue for Congress are RFS management, the potential impacts such management could have on the associated stakeholders, and related biofuel matters. The topics of interest include small refinery exemptions under the RFS, the year-round sale of E15, RFS compliance and compliance costs, the RFS "reset," and approval of advanced biofuel pathways for the RFS (e.g., renewable electricity). The associated stakeholders include renewable fuel producers, agricultural producers, the petroleum industry, and environmental organizations, among others. One legislative proposal specific to the RFS has been introduced in the 116 th Congress— H.R. 104 , the Leave Ethanol Volumes at Existing Levels Act or LEVEL Act—which would decrease the amount of biofuel that must be contained in gasoline and would eliminate the advanced biofuel portion of the mandate. Other legislation was introduced in the 115 th Congress and may be reintroduced in the 116 th Congress. (For further information, contact Kelsi Bracmort, Specialist in Natural Resources and Energy Policy, and see CRS Report R43325, The Renewable Fuel Standard (RFS): An Overview , by Kelsi Bracmort.)
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Review and rollback of Clean Air Act rules to regulate greenhouse gas (GHG) emissions from power plants, cars and trucks, and the oil and gas sector has been a major focus of the Trump Administration since it took office in 2017. On March 28, 2017, President Trump signed Executive Order 13783, to require the review of regulations and policies that "burden the development or use of domestically produced energy resources." The E.O. directed the U.S. Environmental Protection Agency (EPA) to review the Clean Power Plan (CPP), which set limits on GHG emissions from existing power plants, and several other regulations for consistency with policies that the E.O. enumerates, and as soon as practicable, to "suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules." GHG rules for new power plants, for cars and trucks, and for methane emissions from the oil and gas industry, in addition to the CPP, are subject to the executive order and are under review at EPA, as well as being challenged in the courts. The CPP, which was promulgated by the Obama Administration's EPA in 2015 and would limit GHG emissions from existing fossil-fueled power plants, has been one focus of debate. The Trump Administration's EPA has proposed to repeal the CPP and replace it with the Affordable Clean Energy rule (ACE), a rule that defines the "best system of emission reduction" for coal-fired power plant GHGs as efficiency improvement technologies. As proposed, the CPP repeal and ACE rules would remove federal numerical carbon dioxide (CO2) emission limits for existing coal- and natural gas-fired power plants, eliminating one backstop on power plant GHG emissions. Final agency action on ACE is expected later this year. Some Members of Congress have submitted comments to EPA on the ACE proposal. Congress may be interested in conducting oversight of the ACE rule. Clean Air Act GHG standards for cars and light trucks are the subject of another EPA review. An August 2018 proposal would freeze EPA's GHG standards for new cars and light trucks at the level required in model year (MY) 2020. Current regulations, promulgated in 2012 and reaffirmed in January 2017, set increasingly stringent emission standards through MY2025. The EPA proposal would cause a projected increase in vehicle fuel consumption of about a half million barrels of gasoline per day (equivalent to about 186,000 metric tons of carbon dioxide per day) when fully implemented, according to EPA and the Department of Transportation. The proposal would also withdraw California's Clean Air Act waiver for new vehicle GHG standards applicable to MY2021-MY2025. The California standards have been adopted by 12 other states and cover about 35% of the new vehicle market. Following promulgation of these or other Clean Air Act regulations, Congress could address the issues through legislation affirming, modifying, or overturning them. The threat of a filibuster, requiring 60 votes to proceed, however, has generally prevented Senate action. In the 116th Congress, the new majority in the House has indicated a greater interest in addressing climate change issues rather than rolling back regulations. One result may be a new focus on oversight of agency actions to address climate change and its impacts. The 116th Congress may also be interested in issues related to EPA air quality standards for what are called "conventional" or "criteria" pollutants. EPA faces statutory deadlines to complete reviews of the National Ambient Air Quality Standards (NAAQS) for the two most widespread of this group: ozone and particulate matter (PM). The agency has proposed to speed up the review process, while simultaneously eliminating the scientific review panels that have historically assisted agency staff in conducting the reviews. The Clean Air Act has minimal requirements for how the agency is to conduct NAAQS reviews, leaving the details to the EPA Administrator. Nevertheless, congressional oversight is considered possible as EPA moves forward with the ozone and PM reviews. Other issues Congress might consider include air toxics regulations (e.g., the Mercury and Air Toxics rule for power plants), standards for new residential wood heaters, and the Renewable Fuel Standard.
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The routine activities of most federal agencies are funded annually by one or more of the regular appropriations acts. When action on the regular appropriations acts is delayed, a continuing appropriations act, also sometimes referred to as a continuing resolution or CR, may be used to provide interim budget authority. Since the federal fiscal year was shifted to October 1-September 30 beginning with FY1977, all of the regular appropriations acts have been enacted by the beginning of the fiscal year in only four instances (FY1977, FY1989, FY1995, and FY1997), although CRs were not needed for interim funding in one of these fiscal years. CRs were enacted for FY1977 but only to fund certain unauthorized programs whose funding had been excluded from the regular appropriations acts. The Antideficiency Act (31 U.S.C. 1341-1342, 1511-1519) generally bars the obligation or expenditure of federal funds in the absence of appropriations. The interval during a fiscal year when appropriations for a particular project or activity are not enacted into law, either in the form of a regular appropriations act or a CR, is referred to as a funding gap or funding lapse . Although funding gaps may occur at the start of the fiscal year, they may also occur any time a CR expires and another CR (or the relevant regular appropriations bill) is not enacted immediately thereafter. Multiple funding gaps may occur within a fiscal year. In 1980 and early 1981, then-Attorney General Benjamin Civiletti issued opinions in two letters to the President that have been put into effect through guidance provided to federal agencies under various Office of Management and Budget (OMB) circulars clarifying the limits of federal government activities upon the occurrence of a funding gap. The Civiletti letters state that, in general, the Antideficiency Act requires that if Congress has enacted no appropriation beyond a specified period, the agency may make no contracts and obligate no further funds except as "authorized by law." In addition, because no statute generally permits federal agencies to incur obligations without appropriations for the pay of employees, the Antideficiency Act does not, in general, authorize agencies to employ the services of their employees upon a lapse in appropriations, but it does permit agencies to fulfill certain legal obligations connected with the orderly termination of agency operations. The second letter, from January 1981, discusses the more complex problem of interpretation presented with respect to obligational authorities that are "authorized by law" but not manifested in appropriations acts. In a few cases, Congress has expressly authorized agencies to incur obligations without regard to available appropriations. More often, it is necessary to inquire under what circumstances statutes that vest particular functions in government agencies imply authority to create obligations for the accomplishment of those functions despite a lack of current appropriations. It is under this guidance that exceptions may be made for activities involving "the safety of human life or the protection of property." As a consequence of these guidelines, when a funding gap occurs, executive agencies begin a shutdown of the affected projects and activities, including the furlough of non-excepted personnel. The general practice of the federal government after the shutdown has ended has been to retroactively pay furloughed employees for the time they missed, as well as employees who were required to come to work. Under current practice, although a shutdown may be the result of a funding gap, the two events should be distinguished. This is because a funding gap may result in a shutdown of all affected projects or activities in some instances but not in others. For example, when a funding gap is of a short duration, agencies may not have enough time to complete a shutdown of affected projects and activities before funding is restored. In addition, the Office of Management and Budget has previously indicated that a shutdown of agency operations within the first day of a funding gap may be postponed if it appears that an additional CR or regular appropriations act is likely to be enacted that same day. To avoid funding gaps, proposals have previously been offered to establish an "automatic continuing resolution" (ACR) that would provide a fallback source of funding authority for activities, at a specified formula or level, in the event that timely enactment of appropriations is disrupted. Funding would become available automatically and remain available as long as needed so that a funding gap would not occur. Although the House and Senate have considered ACR proposals in the past, none has been enacted into law on a permanent basis. As illustrated in Table 1 , there have been 20 funding gaps since FY1977. The enactment of a CR on the day after the budget authority in the previous CR expired, which has occurred in several instances, is not counted in this report as involving a funding gap because there was no full day for which there was no available budget authority. For example, between FY2000 and FY2018, "next-day" CRs were enacted on 21 occasions. A majority of the funding gaps occurred between FY1977 and FY1995. During this period of 19 fiscal years, 15 funding gaps occurred. Multiple funding gaps have occurred during a single fiscal year in four instances: (1) three gaps covering a total of 28 days in FY1978, (2) two gaps covering a total of four days in FY1983, (3) two gaps covering a total of three days in FY1985, and (4) two gaps covering a total of 26 days in FY1996. Seven of the funding gaps commenced with the beginning of the fiscal year on October 1. The remaining 13 funding gaps occurred at least more than one day after the fiscal year had begun. Ten of the funding gaps ended in October, four ended in November, three ended in December, and three ended in January. Funding gaps have ranged in duration from 1 to 34 full days. Six of the 8 lengthiest funding gaps, lasting between 8 days and 17 days, occurred between FY1977 and FY1980—before the Civiletti opinions were issued and for which there was no government shutdown. Between 1980 and 1990, the duration of funding gaps was generally shorter, typically ranging from one day to three days. In most cases these occurred over a weekend with only limited impact in the form of government shutdown activities. Notably, many of the funding gaps that have occurred since FY1977 do not appear to have resulted in a "shutdown." Prior to the issuance of the Civiletti opinions, the expectation was that agencies would not shut down during a funding gap. Continuing resolutions typically included language ratifying obligations incurred prior to the resolution's enactment. For example, the first CR for FY1980 provided All obligations incurred in anticipation of the appropriations and authority provided in this joint resolution are hereby ratified and confirmed if otherwise in accordance with the provisions of the joint resolution. Thus, while agencies tended to curtail some operations in response to a funding gap, they often "continued to operate during periods of expired funding." In addition, some of the funding gaps after the Civiletti opinions did not result in a completion of shutdown operations due to both a funding gap's short duration and an expectation that appropriations would soon be enacted. For example, during the three-day FY1984 funding gap, "no disruption to government services" reportedly occurred, due to both the three-day holiday weekend and the expectation that the President would soon sign into law appropriations passed by the House and Senate during that weekend. Some of the funding gaps during this period, however, did have a broader impact on affected government operations, even if only for a matter of hours. For example, in response to the one-day funding gap that occurred on October 4, 1984, a furlough of non-excepted personnel for part of that day was reportedly implemented. It should be noted that when most of these funding gaps occurred, one or more regular appropriations measures had been enacted, so any effects were not felt government-wide. For example, the three funding gaps in FY1978 were limited to activities funded in the Departments of Labor and Health, Education, and Welfare Appropriations Act. Similarly, 8 of 13 regular appropriations acts had been enacted prior to the three-day funding gap in FY1984. The most recent funding gaps—two in FY1996, one in FY2014, one in FY2018, and one in FY2019—all resulted in widespread cessation of non-excepted activities and furlough of associated personnel. The legislative history of these funding gaps are summarized below. The two FY1996 funding gaps occurred between November 13 and 19, 1995, and December 15, 1995, through January 6, 1996. The chronology of regular and continuing appropriations enacted during that fiscal year is illustrated in Figure 1 . In the lead-up to the first funding gap, only 3 out of the 13 regular appropriations acts had been signed into law, and budget authority, which had been provided by a CR since the start of the fiscal year, expired at the end of the day on November 13. On this same day, President Clinton vetoed a CR that would have extended budget authority through December 1, 1995, because of the Medicare premium increases contained within the measure. The ensuing funding gap reportedly resulted in the furlough of an estimated 800,000 federal workers. After five days, a deal was reached to end the shutdown and extend funding through December 15. Agencies that had been zeroed out in pending appropriations bills were funded at a rate of 75% of FY1995 budget authority. All other agencies were funded at the lower of the House- or Senate-passed level of funding contained in the FY1996 full-year appropriations bills. The CR also included an agreement between President Clinton and Congress regarding future negotiations to lower the budget deficit within seven years. During the first FY1996 funding gap and prior to the second one, an additional four regular appropriations measures were enacted, and three others were vetoed. The negotiations on the six remaining bills were unsuccessful before the budget authority provided in the CR expired at the end of the day on December 15, 1995. Reportedly, about 280,000 executive branch employees were furloughed during the funding gap between December 15, 1995, and January 6, 1996. A CR to provide benefits for veterans and welfare recipients and to keep the District of Columbia government operating was passed and signed into law on December 22, 1995. The shutdown officially ended on January 6, 1996, when the first of a series of CRs to reopen affected agencies and provide budget authority through January 26, 1996, was enacted. This funding gap commenced at the beginning of FY2014 on October 1, 2013. None of the 12 regular appropriations bills for FY2014 was enacted prior to the beginning of the funding gap. Nor had a CR to provide budget authority for the projects and activities covered by those 12 bills been enacted. On September 30, however, an ACR was enacted to cover FY2014 pay and allowances for (1) certain members of the Armed Forces, (2) certain Department of Defense (DOD) civilian personnel, and (3) other specified DOD and Department of Homeland Security contractors ( H.R. 3210 ; P.L. 113-39 , 113 th Congress). At the beginning of this 16-day funding gap, more than 800,000 executive branch employees were reportedly furloughed. This number was reduced during the course of the funding gap due to the implementation of P.L. 113-39 and other redeterminations of whether certain employees were excepted from furlough. Prior to the resolution of the funding gap, congressional action on appropriations was generally limited to a number of narrow CRs to provide funding for certain programs or classes of individuals. Of these, only the Department of Defense Survivor Benefits Continuing Appropriations Resolution of 2014 ( H.J.Res. 91 ; P.L. 113-44 ) was enacted into law. On October 16, 2013, the Senate passed H.R. 2775 , which had been previously passed by the House on September 12, with an amendment. This amendment, in part, provided interim continuing appropriations for the previous year's programs and activities through January 15, 2014. Later that same day, the House agreed to the Senate amendment to H.R. 2775 . The CR was signed into law on October 17, 2013 ( P.L. 113-46 ), thus ending the funding gap. At the beginning of FY2018, none of the 12 regular appropriations bills had been enacted, so the federal government operated under a series of CRs. The first, P.L. 115-56 , provided government-wide funding through December 8, 2017. The second, P.L. 115-90 , extended funding through December 22, and the third, P.L. 115-96 , extended it through January 19, 2018. In the absence of agreement on legislation that would further extend the period of these CRs, however, a funding gap began with the expiration of P.L. 115-96 at midnight on January 19. A furlough of federal personnel began over the weekend and continued through Monday of the next week, ending with enactment of a fourth CR, P.L. 115-120 , on January 22. At the beginning of FY2019, 5 of the 12 regular appropriations bills had been enacted in two consolidated appropriations bills. The remaining seven regular appropriations bills were funded under two CRs. The first CR, P.L. 115-245 , provided funding through December 7, 2018. The second CR, P.L. 115-298 , extended funding through December 21, 2018. When no agreement was reached on legislation to further extend the period of these CRs, a funding gap began with the expiration of P.L. 115-298 at midnight on December 21, 2018. Because of this funding gap, federal agencies and activities funded in these seven regular appropriations bills were required to shut down. The funding gap ended when a CR, P.L. 116-5 , was signed into law on January 25, 2019, which ended the partial government shutdown and allowed government departments and agencies to reopen. The funding gap lasted 34 full days.
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The Antideficiency Act (31 U.S.C. 1341-1342, 1511-1519) generally bars the obligation of funds in the absence of appropriations. Exceptions are made under the act, including for activities involving "the safety of human life or the protection of property." The interval during the fiscal year when appropriations for a particular project or activity are not enacted into law, either in the form of a regular appropriations act or a continuing resolution (CR), is referred to as a funding gap or funding lapse. Although funding gaps may occur at the start of the fiscal year, they may also occur any time a CR expires and another CR (or the regular appropriations bill) is not enacted immediately thereafter. Multiple funding gaps may occur within a fiscal year. When a funding gap occurs, federal agencies are generally required to begin a shutdown of the affected projects and activities, which includes the prompt furlough of non-excepted personnel. The general practice of the federal government after the shutdown has ended has been to retroactively pay furloughed employees for the time they missed, as well as employees who were required to come to work. Although a shutdown may be the result of a funding gap, the two events should be distinguished. This is because a funding gap may result in a total shutdown of all affected projects or activities in some instances but not others. For example, when funding gaps are of a short duration, agencies may not have enough time to complete a shutdown of affected projects and activities before funding is restored. In addition, the Office of Management and Budget has previously indicated that a shutdown of agency operations within the first day of the funding gap may be postponed if a resolution appears to be imminent. Since FY1977, 20 funding gaps occurred, ranging in duration from 1 day to 34 full days. These funding gaps are listed in Table 1. About half of these funding gaps were brief (i.e., three days or less in duration). Notably, many of the funding gaps do not appear to have resulted in a "shutdown." Prior to the issuance of the opinions in 1980 and early 1981 by then-Attorney General Benjamin Civiletti, while agencies tended to curtail some operations in response to a funding gap, they often "continued to operate during periods of expired funding." In addition, some of the funding gaps after the Civiletti opinions did not result in a completion of shutdown operations due to both the funding gap's short duration and an expectation that appropriations would soon be enacted. Some of the funding gaps during this period, however, did have a broader impact on affected government operations, even if only for a matter of hours. Two funding gaps occurred in FY1996, amounting to 5 days and 21 days. The chronology of regular and continuing appropriations enacted during FY1996 is illustrated in Figure 1. At the beginning of FY2014 (October 1, 2013), none of the regular appropriations bills had been enacted, so a government-wide funding gap occurred. It concluded on October 17, 2013, after lasting 16 full days. During FY2018, there was a funding gap when a CR covering all of the regular appropriations bills expired on January 19, 2018. It concluded on January 22, 2018, after lasting two full days. The most recent funding gap occurred during FY2019, when a CR covering federal agencies and activities funded in 7 of the 12 regular appropriations bills expired on December 21, 2018. It concluded on January 25, 2019, after lasting 34 full days. For a general discussion of federal government shutdowns, see CRS Report RL34680, Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by Clinton T. Brass.
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Since assuming the throne from his late father on February 7, 1999, Jordan's 57-year-old monarch King Abdullah II bin Al Hussein (hereinafter King Abdullah II) has maintained Jordan's stability and strong ties to the United States. Although commentators frequently caution that Jordan's stability is fragile, the monarchy has remained resilient owing to a number of factors. These include a strong sense of social cohesion, strong support for the government from both Western powers and the Gulf Arab monarchies, and an internal security apparatus that is highly capable and, according to human rights groups, uses vague and broad criminal provisions in the legal system to dissuade dissent. Despite this resilience, Jordanians are becoming increasingly restless over economic conditions, corruption, and lack of political reform. In 2018, real GDP growth was 2.8%, while unemployment stood at 18.5%, and was likely much higher among young workers. Publicized allegations of high-level corruption include cases against several private- and public-sector elites for conspiring to illegally manufacture cigarettes. Weekly protests have been recurring in Amman, though they have not been as large as summer 2018 protests over tax hikes. Additionally, many Jordanians have turned to social media to express their dissatisfaction with the status quo; the kingdom has one of the highest worldwide rates of social media usage among emerging economies. According to one former high-ranking Jordanian official, "Loyalty is overwhelming in Jordan but that doesn't mean there are no pockets here and there that are against even the monarchy. And they are negligible, yes, but through social media they will have a ... big voice." King Abdullah II and his government have developed a multifaceted approach for responding to public discontent. In recent months, the king has made several public appearances without a security detail, probably in an effort to increase his visibility and interaction with the population. After prominent people criticized the response to corruption concerns, Jordan decided to televise the trial of those accused in the cigarette scandal mentioned above—a rarity in Jordan's justice system. The government also has withdrawn controversial amendments to the 2015 cybercrime law. According to Jordanian activists and international nongovernmental organizations, the amendments would have seriously curtailed freedom of expression online. Jordan may be addressing public discontent and bolstering nationalist sentiment at home by stoking tensions with Israel in support of the Palestinian cause. In late 2018, the king announced (via Twitter) that his government would not renew a provision in its 1994 peace treaty with Israel that allowed Israel access to the Jordanian territories of Baqoura and Al Ghumar, which are agricultural areas in northern and southern Jordan, respectively. According to one Jordanian commentator, "Domestically, the King's decision is a much-needed shot in the arm for the government at a time when it is facing public pressure over its unpopular economic policies." Several months later, Jordan expanded the membership of the Islamic Waqf Council (Islamic custodial trust), which Jordan appoints to oversee the administration of Jerusalem's Temple Mount (known by Muslims as the Haram al Sharif or Noble Sanctuary) and its holy sites. The Islamic Waqf Council, which had been made up of 11 individuals with close ties to the monarchy, was expanded to 18, including several officials from the Palestinian Authority. The newly expanded council immediately defied a 16-year Israeli ban on Muslim worship at the Bab al Rahma building on the Temple Mount. Israel responded by arresting worshippers and activists while also temporarily banning several leaders of the council from accessing the Temple Mount. In March 2019, King Abdullah II spoke in the industrial city of Zarqa, where he stated, "To me, Jerusalem is a red line, and all my people are with me.... No one can pressure Jordan on this matter, and the answer will be no. All Jordanians stand with me on Jerusalem." These types of steps for appeasing an increasingly restive public arguably are vital for the government of Jordan, which has limited financial options for addressing discontent. Although the government has continued to work with the International Monetary Fund (IMF) on fiscal reforms, public debt has ballooned to 95% of Gross Domestic Product (GDP), and most of the government's budget is dedicated to salaries, pensions, and debt servicing, leaving few additional options to fund public sector job programs. King Abdullah II recently traveled to the United Kingdom, where UK officials pledged to partially guarantee a $1.9 billion World Bank loan to Jordan. In summer 2018, Gulf countries pledged $2.5 billion to Jordan in combined grants and loans. Although the United States and Jordan have never been linked by a formal treaty, they have cooperated on a number of regional and international issues for decades. Jordan's small size and lack of major economic resources have made it dependent on aid from Western and various Arab sources. U.S. support, in particular, has helped Jordan deal with serious vulnerabilities, both internal and external. Jordan's geographic position, wedged between Israel, Syria, Iraq, and Saudi Arabia, has made it vulnerable to the strategic designs of its powerful neighbors, but has also given Jordan an important role as a buffer between these countries in their largely adversarial relations with one another. Jordan, created by colonial powers after World War I, initially consisted of desert or semidesert territory east of the Jordan River, inhabited largely by people of Bedouin tribal background. The establishment of the state of Israel in 1948 brought large numbers of Palestinian refugees to Jordan, which subsequently unilaterally annexed a Palestinian enclave west of the Jordan River known as the West Bank. The original "East Bank" Jordanians, though probably no longer a majority in Jordan, remain predominant in the country's political and military establishments and form the bedrock of support for the Jordanian monarchy. Jordanians of Palestinian origin comprise an estimated 55% to 70% of the population and generally tend to gravitate toward the private sector due to their alleged general exclusion from certain public-sector and military positions. Jordan is a hereditary constitutional monarchy under the prestigious Hashemite family, which claims descent from the Prophet Muhammad. King Abdullah II (age 57) has ruled the country since 1999, when he succeeded to the throne upon the death of his father, the late King Hussein, after a 47-year reign. Educated largely in Britain and the United States, King Abdullah II had earlier pursued a military career, ultimately serving as commander of Jordan's Special Operations Forces with the rank of major general. The king's son, Prince Hussein bin Abdullah (born in 1994), is the designated crown prince. The king appoints a prime minister to head the government and the Council of Ministers (cabinet). On average, Jordanian governments last no more than 15 months before they are dissolved by royal decree. The king also appoints all judges and is commander of the armed forces. The Jordanian constitution, most recently amended in 2016, gives the king broad executive powers. The king appoints the prime minister and may dismiss him or accept his resignation. He also has the sole power to appoint the crown prince, senior military leaders, justices of the constitutional court, and all 75 members of the senate, as well as cabinet ministers. The constitution enables the king to dissolve both houses of parliament and postpone lower house elections for two years. The king can circumvent parliament through a constitutional mechanism that allows provisional legislation to be issued by the cabinet when parliament is not sitting or has been dissolved. The king also must approve laws before they can take effect, although a two-thirds majority of both houses of parliament can modify legislation. The king also can issue royal decrees, which are not subject to parliamentary scrutiny. The king commands the armed forces, declares war, and ratifies treaties. Finally, Article 195 of the Jordanian Penal Code prohibits insulting the dignity of the king (lèse-majesté), with criminal penalties of one to three years in prison. Jordan's constitution provides for an independent judiciary. According to Article 97, "Judges are independent, and in the exercise of their judicial functions they are subject to no authority other than that of the law." Jordan has three main types of courts: civil courts, special courts (some of which are military/state security courts), and religious courts. In Jordan, state security courts administered by military (and civilian) judges handle criminal cases involving espionage, bribery of public officials, trafficking in narcotics or weapons, black marketeering, and "security offenses." The king may appoint and dismiss judges by decree, though in practice a palace-appointed Higher Judicial Council manages court appointments, promotions, transfers, and retirements. Although King Abdullah II in 2013 laid out a vision of Jordan's gradual transition from a constitutional monarchy into a full-fledged parliamentary democracy, in reality, successive Jordanian parliaments have mostly complied with the policies laid out by the Royal Court. The legislative branch's independence has been curtailed not only by a legal system that rests authority largely in the hands of the monarch, but also by electoral laws designed to produce propalace majorities with each new election. Due to frequent gerrymandering in which electoral districts arguably are drawn to favor more rural progovernment constituencies over densely populated urban areas, parliamentary elections have produced large progovernment majorities dominated by representatives of prominent tribal families. In addition, voter turnout tends to be much higher in progovernment areas since many East Bank Jordanians depend on family/tribal connections as a means to access patronage jobs. With few natural resources and a small industrial base, Jordan has an economy that depends heavily on external aid, tourism, expatriate worker remittances, and the service sector. Among the long-standing problems Jordan faces are poverty, corruption, slow economic growth, and high levels of unemployment. The government is by far the largest employer, with between one-third and two-thirds of all workers on the state's payroll. These public sector jobs, along with government-subsidized food and fuel, have long been part of the Jordanian government's "social contract" with its citizens. In the past decade, this arrangement between state and citizen has become more strained. When oil prices skyrocketed between 2007 and 2008, the government had to increase its borrowing in order to continue fuel subsidies. The 2008 global financial crisis was another shock to Jordan's economic system, as it depressed worker remittances from expatriates. The unrest that spread across the region in 2011 further exacerbated Jordan's economic woes, as the influx of hundreds of thousands of Syrian refugees increased demand for state services and resources. Moreover, tourist activity, trade, and foreign investment decreased in Jordan after 2011 due to regional instability. Finally, Jordan, like many other countries, has experienced uneven economic growth, with higher growth in the urban core of the capital Amman and stagnation in the historically poorer and more rural areas of southern Jordan. According to the Economist Intelligence Unit , Amman is the most expensive Arab city and the 25 th -most expensive city to live in globally. Popular economic grievances have spurred the most vociferous protests in Jordan. Youth unemployment is high, as it is elsewhere in the Middle East, and providing better economic opportunities for young Jordanians outside of Amman is a major challenge. Large-scale agriculture is not sustainable because of water shortages, so government officials are generally left providing young workers with low-wage, relatively unproductive civil service jobs. How the Jordanian education system and economy can respond to the needs of its youth has been and will continue to be one of the defining domestic challenges for the kingdom in the years ahead. Over the past year, Jordan's efforts to cut spending and raise revenue have faced significant public resistance. In 2016, the IMF and Jordan reached a three-year, $723 million extended fund facility (EFF) agreement that commits Jordan to improving the business environment for the private sector, reducing budget expenditures, and reforming the tax code. As a result, in 2017 Jordan enacted a Value Added Tax (VAT) on common goods to raise revenue in line with IMF-mandated reforms. To comply further with IMF-mandated reforms, the Jordanian government drafted a new tax bill to increase personal income taxes and thus raise government revenue and ease the public debt burden. The draft tax bill would have lowered the minimum taxable income level in order to expand the tax base from 4.5% of workers to 10%. It also would have raised corporate taxes on banks and reclassified tax evasion as a felony rather than a misdemeanor. In late May 2018, as the bill drew closer to passage and after an IMF team visited Jordan to review its economic reform plan, demonstrations began across the country. On May 30, Jordanian unions and professional associations held a massive general strike against the tax bill and were joined by many younger protesters who denounced recent price hikes on fuel and electricity. Days later, King Abdullah II ordered the government to freeze a 5.5% increase in the price of fuel and a 19% increase in electricity prices. For days, protests continued throughout the country, with some protesters calling for parliament to be dissolved and the political system to be reformed. On June 4, Prime Minister Hani Mulki resigned, and King Abdullah II appointed Education Minister and former World Bank economist Omar Razzaz as prime minister. A change in prime minister is considered fairly routine in Jordanian politics, and protesters decried it as an insufficient response to their demands. Large-scale demonstrations continued for two more days, and on June 7 the government announced that it was withdrawing the bill from immediate consideration and sending it back to parliament for revision. On June 11, Kuwait, the United Arab Emirates, and Saudi Arabia held a summit in Mecca, Saudi Arabia, where they collectively pledged $2.5 billion for Jordan. The aid included a $1 billion deposit at the Central Bank of Jordan. The IMF supported the Jordanian government's decision to revise the tax bill, noting that fiscal reforms should not come at the expense of political stability. This was not the first time that the Jordanian monarchy backtracked on reforms in the face of public pressure. In 1989, 1996, and 2012, Jordanian monarchs responded to mass demonstrations with limited political reforms (new elections and electoral laws, constitutional amendments, anticorruption measures) that did not fundamentally alter the political system. In times of crisis, the government often appeals for Jordanian unity, while calling the opposition divisive or even disloyal. King Abdullah II's turn toward the Gulf for a financial bailout also has precedents. In 2012, at the height of unrest in the Middle East, the Gulf Cooperation Council countries pledged $5 billion to Jordan. In fall 2018, the Jordanian government proposed a new draft tax bill which raises personal and family exemptions for the poorest citizens. The Gulf monarchies also followed through with their $2.5 billion pledge to Jordan, providing (as mentioned above) $1 billion in central bank deposits, $600 million in loan guarantees, $750 million in direct budgetary support (spread over five years), and $150 million for school construction. In December 2018, parliament approved final modifications to the law, and personal income tax rates were adjusted to ensure that the poorest taxpayers were not adversely affected. Beyond the Gulf Arab monarchies, the international community also has increased efforts to boost economic growth in Jordan. In February 2019, the United Kingdom hosted an international donor's conference for Jordan, referred to as The London Initiative 2019. At the conference, donors (UK, France, Japan, and the European Investment Bank) pledged $2.6 billion to Jordan spread over several years. At the conference, the World Bank also announced that pending final approval, it intended to provide $1.9 billion in concessional loans to Jordan over the next two years. Since 2011, the influx of Syrian refugees has placed tremendous strain on Jordan's government and local economies, especially in the northern governorates of Mafraq, Irbid, Ar Ramtha, and Zarqa. Due to Jordan's low population, it has one of the highest per capita refugee rates in the world. As of March 2019, the United Nations High Commissioner for Refugees (UNHCR) estimates that there are 670,238 registered Syrian refugees in Jordan; 83% of all Syrian refugees live in urban areas, while the remaining 17% live in three camps—Azraq, Zaatari, and the Emirati Jordanian Camp (Mrajeeb al Fhood). Another 41,000 refugees are stranded in the desert along the northeastern Jordanian area bordering Syria and Iraq, known as Rukban. Though most of the refugees stranded at Rukban are women and children, a June 2016 IS terrorist attack near the border led Jordanian authorities to close the area, and access to Rukban is sporadic. In 2018, Syrian government forces reestablished control of southern Syria and often have prevented U.N. food shipments from reaching Rukban. Rukban is located within a 35-mile, U.S.-established "de-confliction zone" surrounding U.S. forces based at the At Tanf garrison near the Syrian-Iraqi-Jordanian triborder area. In recent months, Syrian and Russian reports have accused the United States of using refugees stranded at Rukban as "human shields" to protect the U.S. garrison at At Tanf from being attacked. In response, the U.S. Department of Defense issued a statement in March 2019, saying "Despite Syrian and Russian propaganda to the contrary, the United States is not restricting the movement of IDPs into or out of the camp at Rukban. The United States fully supports a process to allow IDPs freedom of movement that is free from coercion and allows for safe, voluntary, and dignified departures for those wishing to leave Rukban." According to the United Nations: Discussions are ongoing with the main parties involved, including the Government of Syria, the Russian Federation, the United States and the Government of Jordan to further clarify the process and to address the concerns that have been raised by people in Rukban. The United Nations continues to reiterate the importance of a carefully planned, principled approach that ensures respect for core protection standards and does not expose vulnerable, and in many cases traumatized, displaced people to additional harm. All movements must be voluntary, safe, well-informed and dignified, with humanitarian access assured throughout. In parallel, the United Nations also continues to strongly advocate for additional humanitarian assistance for those who remain in Rukban. Jordan is among the most water-poor nations in the world and ranks among the 10 countries with the lowest rate of renewable fresh water per capita. According to the Jordan Water Project at Stanford University, Jordan's increase in water scarcity over the last 60 years is attributable to an approximate 5.5-fold population increase since 1962, a decrease in the flow of the Yarmouk River due to the building of dams upstream in Syria, gradual declines in rainfall by an average of 0.4 mm/year since 1995, and depleting groundwater resources due to overuse. The illegal construction of thousands of private wells also has led to unsustainable groundwater extraction. The large influx of Syrian refugees has heightened water demand in the north and, according to USAID, "many communities in Jordan have long experienced tensions over water scarcity even before the arrival of 657,433 registered Syrian refugees in the last five years." To secure new sources of fresh water, Jordan has pursued water cooperative projects with its neighbors. On December 9, 2013, Israel, Jordan, and the Palestinian Authority signed a regional water agreement (officially known as the Memorandum of Understanding on the Red-Dead Sea Conveyance Project, see Figure 5 ) to pave the way for the Red-Dead Canal, a multibillion-dollar project to address declining water levels in the Dead Sea. The agreement was essentially a commitment to a water swap, whereby half of the water pumped from the Red Sea is to be desalinated in a plant to be constructed in Aqaba, Jordan. Some of this water is to then be used in southern Jordan. The rest is to be sold to Israel for use in the Negev Desert. In return, Israel is to sell fresh water from the Sea of Galilee to northern Jordan and sell the Palestinian Authority discounted fresh water produced by existing Israeli desalination plants on the Mediterranean. The other half of the water pumped from the Red Sea (or possibly the leftover brine from desalination) is to be channeled to the Dead Sea. The exact allocations of swapped water were not part of the 2013 MOU and were left to future negotiations. In 2017, with Trump Administration officials seemingly committed to reviving the moribund Israeli-Palestinian peace process, U.S. officials focused on finalizing the terms of the 2013 MOU. In July 2017, the White House announced that U.S. Special Representative for International Negotiations Jason Greenblatt had "successfully supported the Israeli and Palestinian efforts to bridge the gaps and reach an agreement," with the Israeli government agreeing to sell the Palestinian Authority (PA) 32 million cubic meters (MCM) of fresh water. However, one 2018 report indicated that some Israeli officials may have had misgivings about the project and were seeking to pull out of the deal. According to one unnamed U.S. official cited by the report, "The United States told Israel that the U.S. supports the project and expects Israel to live up to its obligations under the Red-Dead agreement or find a suitable alternative that is acceptable to Israel and Jordan." In January 2019, Israel's Minister for Regional Cooperation Tzachi Hanegbi told Bloomberg News that he expects the Israeli cabinet to approve the Red Sea-Dead Sea project and that Israel and Jordan will each pledge $40 million per year to the project for 25 years. Congress has supported the Red-Dead Sea Conveyance Project. P.L. 114-113 , the FY2016 Omnibus Appropriations Act, specifies that $100 million in Economic Support Funds (ESF) be set aside for water sector support for Jordan, to support the Red Sea-Dead Sea water project. In September 2016, USAID notified Congress that it intended to spend $100 million in FY2016 ESF-Overseas Contingency Operations (OCO) assistance on Phase One of the project. U.S. officials frequently express their support for Jordan. President Trump has acknowledged Jordan's role as a key U.S. partner in countering the Islamic State, as many U.S. policymakers advocate for continued robust U.S. assistance to the kingdom. Annual aid to Jordan has nearly quadrupled in historical terms over the last 15 years. Jordan also hosts U.S. troops. According to President Trump's December 2018 War Powers Resolution Report to Congress, "At the request of the Government of Jordan, approximately 2,795 United States military personnel are deployed to Jordan to support Defeat-ISIS operations, enhance Jordan's security, and promote regional stability." The Trump Administration has enacted changes to long-standing U.S. policies on Israel and the Palestinians, which Palestinians have criticized as unfairly punitive and biased toward Israel, and Jordan has found itself in a difficult political position. While King Abdullah II seeks to maintain strong relations with the United States, the issue of Palestinian rights resonates with much of the Jordanian population; more than half of all Jordanian citizens originate from either the West Bank or the area now comprising the state of Israel. In trying to balance U.S.-Jordanian relations with concern for Palestinian rights, King Abdullah II has refrained from directly criticizing the Trump Administration, while urging the international community to return to the goal of a two-state solution that would ultimately lead to an independent Palestinian state with East Jerusalem as its capital. The United States has provided economic and military aid to Jordan since 1951 and 1957, respectively. Total bilateral U.S. aid (overseen by the Departments of State and Defense) to Jordan through FY2017 amounted to approximately $20.4 billion. Jordan also has received hundreds of millions in additional military aid since FY2014 channeled through the Defense Department's various security assistance accounts. Currently, Jordan is the third-largest recipient of annual U.S. foreign aid globally, after Afghanistan and Israel. On February 14, 2018, the United States and Jordan signed a new Memorandum of Understanding (or MOU) on U.S. foreign assistance to Jordan. The MOU, the third such agreement between the United and Jordan, commits the United States to provide $1.275 billion per year in bilateral foreign assistance over a five-year period for a total of $6.375 billion (FY2018-FY2022). This latest MOU represents a 27% increase in the U.S. commitment to Jordan above the previous iteration and is the first five-year MOU with the kingdom. The previous two MOU agreements had been in effect for three years. The United States provides economic aid to Jordan for (1) budgetary support (cash transfer), (2) USAID programs in Jordan, and (3) loan guarantees. The cash transfer portion of U.S. economic assistance to Jordan is the largest amount of budget support given to any U.S. foreign aid recipient worldwide. In November 2018, USAID notified Congress that it intended to obligate a record $745 million in FY2018 ESF (base and OCO) for a cash transfer to Jordan. U.S. cash assistance is provided in order to help the kingdom with foreign debt payments, Syrian refugee support, and fuel import costs (Jordan is almost entirely reliant on imports for its domestic energy needs). According to USAID, ESF cash transfer funds are deposited in a single tranche into a U.S.-domiciled interest-bearing account and are not commingled with other funds. USAID programs in Jordan focus on a variety of sectors including democracy assistance, water conservation, and education (particularly building and renovating public schools). In the democracy sector, U.S. assistance has supported capacity-building programs for the parliament's support offices, the Jordanian Judicial Council, the Judicial Institute, and the Ministry of Justice. The International Republican Institute and the National Democratic Institute also have received U.S. grants to train, among other groups, the Jordanian Independent Election Commission (IEC), Jordanian political parties, and members of parliament. In the water sector, the bulk of U.S. economic assistance is devoted to optimizing the management of scarce water resources. As mentioned above, Jordan is one of the most water-deprived countries in the world. USAID subsidizes several waste treatment and water distribution projects in the Jordanian cities of Amman, Mafraq, Aqaba, and Irbid. U.S. Sovereign Loan Guarantees (or LGs) allow recipient governments (in this case Jordan) to issue debt securities that are fully guaranteed by the United States government in capital markets, effectively subsidizing the cost for governments of accessing financing. Since 2013, Congress has authorized LGs for Jordan and appropriated $413 million in ESF (the "subsidy cost") to support three separate tranches, enabling Jordan to borrow a total of $3.75 billion at concessional lending rates. The U.S. State Department estimates that, since large-scale U.S. aid to Syrian refugees began in FY2012, it has allocated more than $1.3 billion in humanitarian assistance from global accounts for programs in Jordan to meet the needs of Syrian refugees and, indirectly, to ease the burden on Jordan. According to the State Department, U.S. humanitarian assistance is provided both as cash assistance to refugees and through programs to meet their basic needs, such as child health care, education, water, and sanitation. According to USAID, U.S. humanitarian assistance funds are enabling UNICEF to provide health assistance for around 40,000 Syrians sheltering at the informal Rukban and Hadalat settlements along the Syria-Jordan border berm, including water trucking, the rehabilitation of a water borehole, and installation of a water treatment unit in Hadalat. U.S.-Jordanian military cooperation is a key component in bilateral relations. U.S. military assistance is primarily directed toward enabling the Jordanian military to procure and maintain U.S.-origin conventional weapons systems. According to the State Department, Jordan receives one of the largest allocations of International Military Education and Training (IMET) funding worldwide, and IMET graduates in Jordan include "King Abdullah II, the Chairman of the Joint Chiefs of Staff, the Vice Chairman, the Air Force commander, the Special Forces commander, and numerous other commanders." FMF overseen by the State Department is designed to support the Jordanian armed forces' multiyear (usually five-year) procurement plans, while DOD-administered security assistance supports ad hoc defense systems to respond to immediate threats and other contingencies. FMF may be used to purchase new equipment (e.g., precision-guided munitions, night vision) or to sustain previous acquisitions (e.g., Blackhawk helicopters, AT-802 fixed-wing aircraft). FMF grants have enabled the Royal Jordanian Air Force to procure munitions for its F-16 fighter aircraft and a fleet of 28 UH-60 Blackhawk helicopters. As a result of the Syrian civil war and U.S. Operation Inherent Resolve against the Islamic State, the United States has increased military aid to Jordan and channeled these increases through DOD-managed accounts. Although Jordan still receives the bulk of U.S. military aid through the FMF account, Congress has authorized defense appropriations to strengthen Jordan's border security. Since FY2015, total DOD security cooperation funding for Jordan has amounted to $887.7 million. In 1996, the United States granted Jordan Major Non-NATO Ally (MNNA) status, a designation that, among other things, makes Jordan eligible to receive excess U.S. defense articles, training, and loans of equipment for cooperative research and development. In the last five years, excess U.S. defense articles provided to Jordan include two C-130 aircraft, HAWK MEI-23E missiles, and cargo trucks.
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The Hashemite Kingdom of Jordan is considered a key U.S. partner in the Middle East. Although the United States and Jordan have never been linked by a formal treaty, they have cooperated on a number of regional and international issues over the years. Jordan's strategic importance to the United States is evident given ongoing instability in neighboring Syria and Iraq, Jordan's 1994 peace treaty with Israel, and uncertainty over the trajectory of Palestinian politics. Jordan also is a longtime U.S. partner in global counterterrorism operations. U.S.-Jordanian military, intelligence, and diplomatic cooperation seeks to empower political moderates, reduce sectarian conflict, and eliminate terrorist threats. U.S. officials frequently express their support for Jordan. U.S. support, in particular, has helped Jordan address serious vulnerabilities, both internal and external. Jordan's small size and lack of major economic resources have made it dependent on aid from Western and various Arab sources. President Trump has acknowledged Jordan's role as a key U.S. partner in countering the Islamic State, as many U.S. policymakers advocate for continued robust U.S. assistance to the kingdom. Annual aid to Jordan has nearly quadrupled in historical terms over the last 15 years. The United States has provided economic and military aid to Jordan since 1951 and 1957, respectively. Total bilateral U.S. aid (overseen by the Departments of State and Defense) to Jordan through FY2017 amounted to approximately $20.4 billion. Jordan also hosts over 2,000 U.S. troops. Public dissatisfaction with the economy is a pressing concern for the monarchy. In 2018, widespread protests erupted throughout the kingdom in opposition to a draft tax bill and price hikes on fuel and electricity. Though peaceful, the protests drew immediate international attention because of their scale. Since then, the government has frozen or softened the proposed fiscal measures, but also has continued to work with the International Monetary Fund (IMF) on fiscal reforms to address a public debt that has ballooned to 96.4% of Gross Domestic Product (GDP). As the Trump Administration has enacted changes to long-standing U.S. policies on Israel and the Palestinians, which the Palestinians have criticized as unfairly punitive and biased toward Israel, Jordan has found itself in a difficult political position. While King Abdullah II seeks to maintain strong relations with the United States, he rules over a country where the issue of Palestinian rights resonates with much of the population; more than half of all Jordanian citizens originate from either the West Bank or the area now comprising the state of Israel. In trying to balance U.S.-Jordanian relations with Palestinian concerns, King Abdullah II has refrained from directly criticizing the Trump Administration on its recent moves, while urging the international community to return to the goal of a two-state solution that would ultimately lead to an independent Palestinian state with East Jerusalem as its capital. The 116th Congress may consider legislation pertaining to U.S. relations with Jordan. On February 18, 2016, President Obama signed the United States-Jordan Defense Cooperation Act of 2015 (P.L. 114-123), which authorizes expedited review and an increased value threshold for proposed arms sales to Jordan for a period of three years. It amended the Arms Export Control Act to give Jordan temporarily the same preferential treatment U.S. law bestows upon NATO members and Australia, Israel, Japan, New Zealand, and South Korea. S. 28, the United States-Jordan Defense Cooperation Extension Act, would reauthorize the United States-Jordan Defense Cooperation Act (22 U.S.C. 275) through December 31, 2022.
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The U.S. and Afghan governments, along with partner countries, remain engaged in combat with a robust Taliban-led insurgency. W hile U.S. military officials maintain that Afghan forces are "resilient" against the Taliban, by some measures insurgents are in control of or contesting more territory today than at any point since 2001. The conflict also involves an array of other armed groups, including active affiliates of both Al Qaeda (AQ) and the Islamic State (IS, also known as ISIS, ISIL, or by the Arabic acronym Da'esh ). Since early 2015, the NATO-led mission in Afghanistan, known as "Resolute Support Mission" (RSM), has focused on training, advising, and assisting Afghan government forces; combat operations by U.S. counterterrorism forces, along with some partner forces, also continue. These two "complementary missions" make up Operation Freedom's Sentinel (OFS). Simultaneously, the United States is engaged in an aggressive diplomatic effort to end the war, most notably through direct talks with Taliban representatives (a dramatic reversal of U.S. policy). A draft framework, in which the Taliban would prohibit terrorist groups from operating on Afghan soil in return for the eventual withdrawal of U.S. forces, was reached between U.S. and Taliban negotiators in January 2019, though lead U.S. negotiator Zalmay Khalilzad insists that "nothing is agreed until everything is agreed." Negotiations do not, as of May 2019, directly involve representatives of the Afghan government, leading some to worry that the United States will prioritize a military withdrawal over a complex political settlement that preserves some of the social, political, and humanitarian gains made since 2001. Underlying the negotiations is the unsettled state of Afghan politics, which is a major complicating factor: Afghanistan held inconclusive parliamentary elections in October 2018 and the all-important presidential election, originally scheduled for April 2019, has now been postponed twice until September 2019. The Afghan government has made some progress in reducing corruption and implementing its budgetary commitments, but faces domestic criticism for its failure to guarantee security and prevent insurgent gains. The United States has contributed approximately $133 billion in various forms of aid to Afghanistan over the past decade and a half, from building up and sustaining the Afghan National Defense and Security Forces (ANDSF) to economic development. This assistance has increased Afghan government capacity, but prospects for stability in Afghanistan appear distant. Some U.S. policymakers still hope that the country's largely underdeveloped natural resources and/or geographic position at the crossroads of future global trade routes might improve the economic life of the country, and, by extension, its social and political dynamics as well. Nevertheless, Afghanistan's economic and political outlook remains uncertain, if not negative, in light of ongoing hostilities. In August 2017, President Trump announced what he termed a new South Asia strategy in a nationally-televised address. Many Afghan and U.S. observers interpreted the speech and the policies it promised (expanded targeting authorities for U.S. forces, greater pressure on Pakistan, a modest increase in the number of U.S. and international troops) as a sign of renewed U.S. commitment. However, after less than a year of continued military stalemate, the Trump Administration in July 2018 reportedly ordered the start of direct talks with the Taliban that did not include the Afghan government. This represented a dramatic reversal of U.S. policy, which had previously been to support an "Afghan-led, Afghan-owned" peace process. In September 2018, Secretary of State Mike Pompeo appointed former U.S. Ambassador to Afghanistan Zalmay Khalilzad to the newly-created post of Special Representative for Afghanistan Reconciliation; Khalilzad has since met several times with Taliban representatives in Doha, Qatar (where the group maintains a political office). He has also had consultations with the Afghan, Pakistani, and other regional governments. After a six-day series of negotiations in Doha in late January 2019, Khalilzad stated that, "The Taliban have committed, to our satisfaction, to do what is necessary that would prevent Afghanistan from ever becoming a platform for international terrorist groups or individuals," in return for which U.S. forces would eventually fully withdraw from the country. Khalilzad later cautioned that "we made significant progress on two vital issues: counter terrorism and troop withdrawal. That doesn't mean we're done. We're not even finished with these issues yet, and there is still work to be done on other vital issues like intra-Afghan dialogue and a complete ceasefire." After a longer series of talks that ended on March 12, 2019, Khalilzad announced that an agreement "in draft" had been reached on counterterrorism assurances and U.S. troop withdrawal. He noted that after the agreement is finalized, "the Taliban and other Afghans, including the government, will begin intra-Afghan negotiations on a political settlement and comprehensive ceasefire." The Taliban have long refused to negotiate with representatives of the Afghan government, which they characterize as a corrupt and illegitimate puppet of foreign powers, and Kabul is not directly involved in the ongoing U.S.-Taliban negotiations. Some observers have criticized that arrangement; former U.S. Ambassador to Afghanistan Ryan Crocker argued that by not insisting on the inclusion of the Afghan government in these negotiations "we have ourselves delegitimized the government we claim to support," and advocated that the U.S. halt talks until the Taliban agree to include the Afghan government. Afghan President Ashraf Ghani has promised that his government will not accept any settlement that limits Afghans' rights. In a January 2019 televised address, he further warned that any agreement to withdraw U.S. forces that did not include Kabul's participation could lead to "catastrophe," pointing to the 1990s-era civil strife following the fall of the Soviet-backed government that led to the rise of the Taliban. President Ghani's concern about being excluded from the talks surfaced in mid-March when his national security advisor accused Khalilzad of "delegitimizing the Afghan government and weakening it," and harboring political ambitions within Afghanistan, leading to a shark rebuke from the State Department. According to a former State Department official, "The real issue is not the personality of an American diplomat; the real issue is a policy divergence." It remains unclear what kind of political arrangement could satisfy both Kabul and the Taliban to the extent that the latter fully abandons armed struggle in pursuit of its goals. The Taliban have recently given some more conciliatory signs, with one spokesman saying the group is "not seeking a monopoly on power." Still, many Afghans, especially women, who remember Taliban rule and oppose the group's tactics and beliefs, remain wary. The unsettled state of Afghan politics is a major complicating factor for current negotiations. The leadership partnership (referred to as the national unity government) between President Ashraf Ghani and Chief Executive Officer (CEO) Abdullah Abdullah, which was brokered by the United States in the wake of the disputed 2014 election, has encountered challenges but remains intact. However, a trend in Afghan society and governance that worries some observers is increasing political fragmentation along ethnic lines. Such fractures have long existed in Afghanistan but were relatively muted during Hamid Karzai's presidency. These divisions are sometimes seen as a driving force behind some of the political upheavals that have challenged Ghani's government. Afghanistan held parliamentary elections in October 2018 that were marred by logistical, administrative, and security problems; results are still, as of May 2019, incomplete, though the new parliament was inaugurated in April 2019. The all-important presidential election, originally scheduled for April 2019, has now been postponed twice, until September 2019. It is unclear to what extent, if any, those delays are related to ongoing U.S.-Taliban talks. U.S. officials have denied that the establishment of an interim government is part of their negotiations with the Taliban, but some observers speculate that such an arrangement (which Ghani has rejected) might be necessary to accommodate the reentry of Taliban figures into public life and facilitate the establishment of a new political system, which a putative settlement might require. Since early 2015, the NATO-led mission in Afghanistan of 17,000 troops, known as "Resolute Support Mission" (RSM), has focused on training, advising, and assisting Afghan government forces. Combat operations by U.S. forces also continue and have increased in number since 2017. These two "complementary missions" comprise Operation Freedom's Sentinel (OFS). There are around 14,000 U.S. troops in Afghanistan, of which approximately 8,500 are part of RSM. The remaining 8,400 troops of RSM come from 38 partner countries. Since at least early 2017, U.S. military officials have publicly stated that the conflict is "largely stalemated." Arguably complicating that assessment, the extent of territory controlled or contested by the Taliban has steadily grown in recent years by most measures (see Figure 1 ). In its January 30, 2019, report, the Special Inspector General for Afghanistan Reconstruction (SIGAR) reported that the share of districts under government control or influence fell to 53.8%, as of October 2018. This figure, which marks a slight decline from previous reports, is the lowest recorded by SIGAR since tracking began in November 2015; 12% of districts are under insurgent control or influence, with the remaining 34% contested. According to SIGAR's April 30, 2019, quarterly report, the U.S. military is "no longer producing its district-level stability assessments of Afghan government and insurgent control and influence." This information, which was in every previous SIGAR quarterly report going back to January 2016, estimated the extent of Taliban control and influence in terms of both territory and population, and was accompanied by charts portraying those trends over time along with a color-coded map of control/influence by district (see Figure 2 ). SIGAR reports that it was told by the U.S. military that the assessment is no longer being produced because it "was of limited decision-making value to the [U.S.] Commander." While the Taliban retain the ability to conduct high-profile urban attacks, they also demonstrate considerable tactical capabilities. Reports indicate that ANDSF fatalities have averaged 30-40 a day in recent months, and President Ghani stated in January 2019 that over 45,000 security personnel had paid "the ultimate sacrifice" since he took office in September 2014. Insider attacks on U.S. and coalition forces by Afghan nationals are a sporadic, but persistent, problem—several U.S. servicemen died in such attacks in 2018, as did 85 Afghan soldiers. In October 2018, General Miller was present at an attack inside the Kandahar governor's compound by a Taliban infiltrator who killed a number of provincial officials, including the powerful police chief Abdul Raziq; Miller was unhurt but another U.S. general was wounded. Beyond the Taliban, a significant share of U.S. operations are aimed at the local Islamic State affiliate, known as Islamic State-Khorasan Province (ISKP, also known as ISIS-K), although there is debate over the degree of threat the group poses. ISKP and Taliban forces have sometimes fought over control of territory or because of political or other differences. U.S. officials are reportedly tracking attempts by IS fighters fleeing Iraq and Syria to enter Afghanistan, which may represent a more permissive operating environment. ISKP also has claimed responsibility for a number of large-scale attacks, many targeting Afghanistan's Shia minority. The UN reports that Al Qaeda, while degraded in Afghanistan and facing competition from ISKP, "remains a longer-term threat." The effectiveness of the ANDSF is key to the security of Afghanistan. As of March 2019, SIGAR reports that Congress has appropriated at least $83.3 billion for Afghan security since 2002. Since 2014, the United States generally has provided around 75% of the estimated $5-6 billion a year to fund the ANDSF, with the balance coming from U.S. partners ($1 billion annually) and the Afghan government ($500 million). Concerns about the ANDSF raised by SIGAR, the Department of Defense, and others include absenteeism, the fact that about 35% of the force does not reenlist each year, and the potential for rapid recruitment to dilute the force's quality; widespread illiteracy within the force; credible allegations of child sexual abuse and other potential human rights abuses; and casualty rates often described as unsustainable. Key metrics related to ANDSF performance, including casualties, attrition rates, and personnel strength, were classified by U.S. Forces-Afghanistan (USFOR-A) starting with the October 2017 SIGAR quarterly report, citing a request from the Afghan government. Although SIGAR had previously published those metrics as part of its quarterly reports, they remain withheld. In both legislation and public statements, some Members have expressed concern over the decline in the types and amount of information provided by the executive branch. At a February 2017 Senate Armed Services Committee hearing, then-mission commander of Resolute Support Mission General Nicholson indicated that the United States had a "shortfall of a few thousand" troops that, if filled, could help break the "stalemate." In June 2017, President Trump delegated to then-Secretary Mattis the authority to set force levels, reportedly limited to around 3,500 additional troops, in June 2017; Secretary Mattis signed orders to deploy them in September 2017. Those additional forces put the total number of U.S. troops in the country at around 14,000. Some reports in late 2018 and early 2019 indicate that President Trump may be contemplating ordering the withdrawal of some U.S. forces from Afghanistan. Still, U.S. officials maintain that no policy decision has been made to reduce U.S. force levels. During a visit to Kabul on February 11, 2019, Acting Secretary of Defense Patrick Shanahan stated "I have not been directed to step down our forces in Afghanistan." Also in February 2019, the Senate passed S. 1 , which includes language (Section 408) warning against a "precipitous withdrawal" of U.S. forces from Afghanistan and Syria. Additionally, U.S. forces now have broader authority to operate independently of Afghan forces and "attack the enemy across the breadth and depth of the battle space," expanding the list of targets to include those related to "revenue streams, support infrastructure, training bases, infiltration lanes." This was demonstrated in a series of operations, beginning in the fall of 2017, against Taliban drug labs. These operations, often highlighted by U.S. officials, sought to degrade what is widely viewed as one of the Taliban's most important sources of revenue, namely the cultivation, production, and trafficking of narcotics. Some have questioned the impact of that campaign, which came to an end in late 2018. In November 2018, the United Nations reported that the total area used for poppy cultivation in 2018 was 263,000 hectares, the second-highest level recorded since monitoring began in 1994. Regional dynamics, and the involvement of outside powers, are central to the conflict in Afghanistan. The neighboring state widely considered most important in this regard is Pakistan, which has played an active, and by many accounts negative, role in Afghan affairs for decades. President Trump has directly accused Pakistan of "housing the very terrorists that we are fighting." Afghan leaders, along with U.S. military commanders, attribute much of the insurgency's power and longevity either directly or indirectly to Pakistan. Experts debate the extent to which Pakistan is committed to Afghan stability or is attempting to exert control in Afghanistan through ties to insurgent groups, most notably the Haqqani Network, a U.S.-designated Foreign Terrorist Organization (FTO) that has become an official, semiautonomous component of the Taliban. U.S. officials have repeatedly identified militant safe havens in Pakistan as a threat to security in Afghanistan, though some observers question the validity of that charge in light of the Taliban's increased territorial control within Afghanistan itself. Pakistan may view a weak and destabilized Afghanistan as preferable to a strong, unified Afghan state (particularly one led by a Pashtun-dominated government in Kabul; Pakistan has a large and restive Pashtun minority). However, at least some Pakistani leaders have stated that instability in Afghanistan could rebound to Pakistan's detriment; Pakistan has struggled with indigenous Islamist militants of its own. Afghanistan-Pakistan relations are further complicated by the large Afghan refugee population in Pakistan and a long-standing border dispute over which violence has broken out on several occasions. Pakistan sees Afghanistan as potentially providing strategic depth against India, but may also anticipate that improved relations with Afghanistan's leadership could limit India's influence in Afghanistan. Indian interest in Afghanistan stems largely from India's broader regional rivalry with Pakistan, which impedes Indian efforts to establish stronger and more direct commercial and political relations with Central Asia. In his August 2017 speech, President Trump announced what he characterized as a new approach to Pakistan, saying, "We can no longer be silent about Pakistan's safe havens for terrorist organizations, the Taliban, and other groups that pose a threat to the region and beyond." He also, however, praised Pakistan as a "valued partner," citing the close U.S.-Pakistani military relationship. In January 2018, the Trump Administration announced plans to suspend security assistance to Pakistan, a decision that has affected billions of dollars in aid. In February 2019, CENTCOM Commander General Joseph Votel stated, "Pakistan has not taken concrete actions against the safe havens of violent extremist organizations inside its borders," but praised Pakistan for some "positive steps" in assisting Special Representative Khalilzad's reconciliation efforts. Afghanistan largely maintains cordial ties with its other neighbors, including the post-Soviet states of Central Asia, though some warn that rising instability in Afghanistan may complicate those relations. In the past two years, multiple U.S. commanders have warned of increased levels of assistance, and perhaps even material support, for the Taliban from Russia and Iran, both of which cite IS presence in Afghanistan to justify their activities. Both nations were opposed to the Taliban government of the late 1990s, but reportedly see the Taliban as a useful point of leverage vis-a-vis the United States. Afghanistan may also represent a growing priority for China in the context of broader Chinese aspirations in Asia and globally. President Trump mentioned neither Iran nor Russia in his August 2017 speech, and it is unclear how, if at all, the U.S. approach to them might have changed as part of the new strategy. Afghanistan may also represent a growing priority for China in the context of broader Chinese aspirations in Asia and globally. In his speech, President Trump did encourage India to play a greater role in Afghan economic development; this, along with other Administration messaging, has compounded Pakistani concerns over Indian activity in Afghanistan. India has been the largest regional contributor to Afghan reconstruction, but New Delhi has not shown an inclination to pursue a deeper defense relationship with Kabul. Economic development is pivotal to Afghanistan's long-term stability, though indicators of future growth are mixed. Decades of war have stunted the development of most domestic industries, including mining. The economy has also been hurt by a steep decrease in the amount of aid provided by international donors. Afghanistan's Gross Domestic Product (GDP) has grown an average of 7% per year since 2003, but growth slowed to 2% in 2013 due to aid cutbacks and political uncertainty about the post-2014 security situation. Since 2015, Afghanistan has experienced a "slight recovery" with growth of between 2% and 3% in 2016 and 2017, though the increase in the poverty rate (55% living below the national poverty line in 2016-2017 compared to 38% in 2012-2013) complicates that picture. A severe drought affecting northern and western Afghanistan has compounded economic and humanitarian challenges. Social conditions in Afghanistan remain equally mixed. On issues ranging from human trafficking to religious freedom to women's rights, Afghanistan has, by all accounts, made significant progress since 2001, but future prospects in these areas remain uncertain. Congress has appropriated more than $132 billion in aid for Afghanistan since FY2002, with about 63% for security and 28% for development (and the remainder for civilian operations and humanitarian aid). The Administration's FY2020 budget requests $4.8 billion for the ANDSF, $400 million in Economic Support Funds, and smaller amounts to help the Afghan government with tasks like combating narcotics trafficking. This is down slightly from both the FY2019 request as well as the FY2018 enacted level of about $5.5 billion in total funding for Afghanistan (down from nearly $17 billion in FY2010). These figures do not include the cost of U.S. combat operations (including related regional support activities), which was estimated at a total of $745 billion since FY2001 as of December 2018, according to the DOD's quarterly Cost of War report, with approximately $45 billion requested for each of FY2018 and FY2019. In its FY2020 budget request, the Pentagon identified $18.6 billion in direct war costs in Afghanistan and $35.3 billion in "enduring theater requirements and related missions," though it is unclear how much of this latter figure is for Afghanistan versus other theaters. Insurgent and terrorist groups have demonstrated considerable capabilities in 2018 and 2019, throwing into sharp relief the daunting security challenges that the Afghan government and its U.S. and international partners face. At the same time, hopes for a negotiated settlement have risen, inspired by developments such as the June 2018 nationwide cease-fire and, more importantly, direct U.S.-Taliban talks, though the prospects for such negotiations to deliver a settlement are uncertain. U.S. policy has sought to force the Taliban to negotiate with the Afghan government by compelling the group to conclude that continued military struggle is futile in light of combined U.S., NATO, and ANDSF capabilities. It is still unclear, however, how the Taliban perceives its fortunes; given the group's recent battlefield gains, one observer has said that "the group has little reason to commit to a peace process: it is on a winning streak." Observers differ on whether the Taliban pose an existential threat to the Afghan government, given the current military balance. That dynamic could change if the United States alters the level or nature of its troop deployments in Afghanistan or funding for the ANDSF. President Ghani has said, "[W]e will not be able to support our army for six months without U.S. [financial] support." Notwithstanding direct U.S. support, Afghan political dynamics, particularly the willingness of political actors to directly challenge the legitimacy and authority of the central government, even by extralegal means, may pose a serious threat to Afghan stability in 2019 and beyond, regardless of Taliban military capabilities. A potential collapse of the Afghan military and/or the government that commands it could have significant implications for the United States, particularly given the nature of negotiated security arrangements. Regardless of how likely the Taliban would be to gain full control over all, or even most, of the country, the breakdown of social order and the fracturing of the country into fiefdoms controlled by paramilitary commanders and their respective militias may be plausible, even probable. Afghanistan experienced a similar situation nearly thirty years ago. Though Soviet troops withdrew from Afghanistan by February 1989, Soviet aid continued, sustaining the communist government in Kabul for nearly three years. However, the dissolution of the Soviet Union in December 1991 ended that aid, and a coalition of mujahedin forces overturned the government in April 1992. Almost immediately, mujahedin commanders turned against each other, leading to a complex civil war during which the Taliban was founded, grew, and took control of most of the country, eventually offering sanctuary to Al Qaeda. While the Taliban and Al Qaeda are still "closely allied" according to the UN, Taliban forces have clashed repeatedly with the Afghan Islamic State affiliate. Under a more unstable future scenario, alliances and relationships among extremist groups could evolve or security conditions could change, offering new opportunities to transnational terrorist groups whether directly or by default. After more than 17 years of war, Members of Congress and other U.S. policymakers may reassess notions of what "victory" in Afghanistan looks like, examining the array of potential outcomes, how these outcomes might harm or benefit U.S. interests, and the relative levels of U.S. engagement and investment required to attain them. The present condition, which is essentially a stalemate that has existed for several years, could persist; some argue that the United States "has the capacity to sustain its commitment to Afghanistan for some time to come" at current levels. Others counter that "the threat in Afghanistan doesn't warrant a continued U.S. military presence and the associated costs—which are not inconsequential." The Trump Administration has described U.S. policy in Afghanistan as "grounded in the fundamental objective of preventing any further attacks on the United States by terrorists enjoying safe haven or support in Afghanistan." For years, some analysts have challenged that line of reasoning, describing it as a strategic "myth" and arguing that "the safe haven fallacy is an argument for endless war based on unwarranted worst-case scenario assumptions." Some of these analysts and others dismiss what they see as a disproportionate focus on the military effort, citing evidence that "the terror threat to Americans remains low" to argue that "a strategy that emphasizes military power will continue to fail." As many have observed, increased political instability, fueled by questions about the central government's authority and competence and rising ethnic tensions, may pose as serious a threat to Afghanistan as the Taliban does. In light of these internal political dynamics, Members of Congress may examine how the United States can leverage its assets, influence, and experience in Afghanistan, as well as those of Afghanistan's neighbors and international organizations, to encourage more equal, inclusive, and effective governance. Congress could also seek to help shape the U.S. approach to potential negotiations around amending the constitution or otherwise altering the highly centralized Afghan political system, e.g., through legislation and public statements. Core issues for Congress include its role in authorizing, appropriating funds for, and overseeing U.S. military activities, aid, and regional policy implementation.
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Afghanistan has been a central U.S. foreign policy concern since 2001, when the United States, in response to the terrorist attacks of September 11, 2001, led a military campaign against Al Qaeda and the Taliban government that harbored and supported it. In the intervening 17 years, the United States has suffered around 2,400 fatalities in Afghanistan (including seven in 2019 to date) and Congress has appropriated approximately $133 billion for reconstruction there. In that time, an elected Afghan government has replaced the Taliban, and nearly every measure of human development has improved, although future prospects of those measures remain mixed. The fundamental objective of U.S. efforts in Afghanistan is "preventing any further attacks on the United States by terrorists enjoying safe haven or support in Afghanistan." In early 2019, U.S. military engagement in Afghanistan appears closer to ending than perhaps ever before as U.S. officials negotiate directly with Taliban interlocutors on the issues of counterterrorism and the presence of U.S. troops. However, U.S. negotiators caution that talks are still at a preliminary stage, and Afghan government representatives have not been directly involved. Lead U.S. negotiator Zalmay Khalilzad insists that the United States seeks a comprehensive peace agreement but some worry that the United States will prioritize a military withdrawal over a complex political settlement that preserves some of the social, political, and humanitarian gains made since 2001. It remains unclear what kind of political arrangement could satisfy both Kabul and the Taliban to the extent that the latter fully abandons armed struggle. Press reports in December 2018 and early 2019 indicate that the Trump Administration may be considering withdrawing some U.S. forces, though U.S. officials maintain that no policy decision has been made to reduce U.S. force levels. Many observers assess that a full-scale U.S. withdrawal would lead to the collapse of the Afghan government and perhaps even the reestablishment of Taliban control. By many measures, the Taliban are in a stronger military position now than at any point since 2001, though at least some once-public metrics related to the conduct of the war have been classified or are no longer produced (including district-level territorial and population control assessments, as of the April 30, 2019, quarterly report from the Special Inspector General for Afghanistan Reconstruction). Underlying the negotiations is the unsettled state of Afghan politics, which is a major complicating factor: Afghanistan held inconclusive parliamentary elections in October 2018 and the all-important presidential election, originally slated for April 2019, has been postponed twice and is now scheduled for September 2019. For background information and analysis on the history of congressional engagement with Afghanistan and U.S. policy there, as well as a summary of recent Afghanistan-related legislative proposals, see CRS Report R45329, Afghanistan: Legislation in the 115th Congress, by Clayton Thomas.
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The Republic of Cyprus gained its independence from Great Britain in 1960. At the time, the population living on the island was approximately 77% Greek ethnic origin and roughly 18% Turkish ethnic origin. (This figure has changed over the years, as an influx of mainland Turks have settled in the north.) Maronite Christians, Armenians, and others constituted the remainder. At independence, the republic's constitution defined elaborate power-sharing arrangements between the two main Cypriot groups. It required a Greek Cypriot president and a Turkish Cypriot vice president, each elected by his own community. Simultaneously, a Treaty of Guarantee signed by Britain, Greece, and Turkey ensured the new republic's territorial integrity, and a Treaty of Alliance between the republic, Greece, and Turkey provided for Greek and Turkish soldiers to help defend the island. However, at that time, the two major communities aspired to different futures for Cyprus: most Greek Cypriots favored union of the entire island with Greece ( enosis ), whereas Turkish Cypriots preferred to partition the island ( taksim ) and possibly unite the Turkish Cypriot zone with Turkey. Cyprus's success as a new, stable republic lasted from 1960 to 1963. In 1963, after President (and Greek Orthodox Archbishop) Makarios III proposed constitutional modifications that favored the majority Greek Cypriot community, relations between the two communities deteriorated, with Turkish Cypriots increasingly consolidating into enclaves in larger towns, mostly in the north of the island, for safety. In 1964, Turkish Cypriots withdrew from most national institutions and began to administer their own affairs. Intercommunal violence began to increase between 1963 and 1964 and continued to escalate in the ensuing years. Outside mediation and pressure, including by the United States, appeared to prevent Turkey from intervening militarily on behalf of the Turkish Cypriots. On March 4, 1964, the United Nations Security Council authorized the establishment of the United Nations Peacekeeping Force in Cyprus (UNFICYP) to control the violence and act as a buffer between the two communities. UNFICYP became operational on March 27, 1964, and still carries out its mission today. In 1974, a military junta in power in Athens supported a coup against President Makarios, replacing him with a more hard-line supporter of enosis . In July 1974, Turkey, citing the 1960 Treaty of Guarantee as a legal basis for its move to defend the Turkish Cypriots, deployed military forces to the island in two separate actions. By August 25, 1974, Turkey had taken control of more than one-third of the island. This military intervention had many ramifications. Foremost was the physical separation of the island; widespread dislocation of both the Greek and the Turkish Cypriot populations and related governance, refugee, and property problems; and what the Greek Cypriots refer to as the continued occupation of the island. After the conflict subsided and a fragile peace took root, Turkish Cypriots pursued a solution to the conflict that would keep the two communities separate in two states under the government of either a confederation or a stronger central federal government. In February 1975, the Turkish Cypriots declared their government the Turkish Federated State of Cyprus (TFSC). In 1983, Turkish Cypriot leader Rauf Denktash declared the Turkish Republic of Northern Cyprus (TRNC)—a move considered by some to be a unilateral declaration of independence. At the time, Denktash argued that creation of an independent state was a necessary precondition for a federation with the Greek Cypriots. However, he ruled out a merger with Turkey and pledged cooperation with U.N.-brokered settlement efforts. Thirty-five years later, only Turkey has recognized the TRNC. Between 1974 and 2002, there were numerous, unsuccessful rounds of U.N.-sponsored direct and indirect negotiations to achieve a settlement. Negotiations focused on reconciling the two sides' interests and reestablishing a central government. They foundered on definitions of goals and ways to implement a federal solution. Turkish Cypriots emphasized bizonality and the political equality of the two communities, preferring two nearly autonomous societies with limited contact. Greek Cypriots emphasized the freedoms of movement, property, and settlement throughout the island. The two parties also differed on the means of achieving a federation: Greek Cypriots wanted their internationally recognized national government to devolve power to the Turkish Cypriots, who would then rejoin a Cypriot republic. For the Turkish Cypriots, two entities would join, for the first time, in a new federation. These differences in views also affected the resolution of issues such as property claims, citizenship of mainland Turks who had settled on the island, and other legal issues. These differences in views continue to plague the negotiations today. Negotiations for a final solution to the Cyprus issue appeared to take a dramatic and positive step forward when on November 11, 2002, then-U.N. Secretary-General Kofi Annan presented a draft of "The Basis for Agreement on a Comprehensive Settlement of the Cyprus Problem," commonly referred to as the Annan Plan. The plan called for, among many provisions, a "common state" government with a single international legal personality that would participate in foreign and European Union relations. Two politically equal component states would address much of the daily responsibilities of government in their respective communities. The Annan Plan was a comprehensive approach and, of necessity, addressed highly controversial issues for both sides. Over the course of the following 16 months, difficult negotiations ensued. Turkish Cypriot leader Denktash was replaced as chief negotiator by a more prosettlement figure, newly elected "prime minister" Mehmet Ali Talat. Republic of Cyprus President Glafkos Clerides was replaced through an election with, according to some observers, a more skeptical president, Tassos Papadopoulos. The Annan Plan itself was revised several times in an attempt to reach compromises demanded by both sides. Complicating the matter even more, on April 16, 2003, the Republic of Cyprus signed an accession treaty with the European Union (EU) to become a member of the EU on May 1, 2004, whether or not there was a settlement and a reunited Cyprus. Finally, after numerous meetings and negotiations, and despite a lack of a firm agreement but sensing that further negotiations would produce little else, on March 29, 2004, Secretary-General Annan released his "final revised plan" and announced that the plan would be put to referenda simultaneously in both north and south Cyprus on April 24, 2004. The Turkish Cypriot leadership split, with Denktash urging rejection and Talat urging support. Greek Cypriot President Papadopoulos, to the dismay of the U.N., EU, and United States, but for reasons he argued were legitimate concerns of the Greek Cypriot community, urged the Greek Cypriots to reject the referenda. On April 24, what remaining hope existed for a solution to the crisis on Cyprus was dashed as 76% of Greek Cypriot voters rejected the plan, while 65% of Turkish Cypriot voters accepted it. In his May 28, 2004, report following the vote, Annan said that "the Greek Cypriots' vote must be respected, but they need to demonstrate willingness to resolve the Cyprus problem through a bicommunal, bizonal federation and to articulate their concerns about security and implementation of the Plan with 'clarity and finality.'" As early as 2004, Talat, as Turkish Cypriot "prime minister," was credited with helping convince the Turkish Cypriots to support the Annan Plan and had been seen as perhaps the one Turkish Cypriot leader who could move the Greek Cypriots toward a more acceptable solution for both sides. For his efforts at the time, Talat, on April 17, 2005, was elected "president" of the unrecognized TRNC over the National Unity Party's (UBP) candidate, Dr. Dervis Eroglu, receiving 55.6% of the vote in a field of nine. For roughly the next four years, to little avail, Cyprus muddled through a series of offers and counteroffers to restart serious negotiations even as the Greek Cypriots solidified their new status as a member of the EU, a status not extended to the Turkish Cypriots despite an EU pledge to try to help end the isolation of the north. On February 24, 2008, Demetris Christofias of the Progressive Party of Working People (AKEL) was elected to a five-year term as president of the Republic of Cyprus. Christofias was educated in the Soviet Union and was a fluent Russian speaker. He joined the communist-rooted AKEL party at the age of 14 and rose through its ranks to become leader in 1988. Christofias was elected president of the Cypriot House of Representatives in 2001 and won reelection in 2006. Christofias's election had the backing of the Democratic (DIKO) Party and the Socialist (EDEK) Party. Christofias, in part, tailored his campaign to opposing what he believed was an uncompromising approach toward the Turkish Cypriots by his opponent, incumbent President Papadopoulos, and the stagnation in the attempt to reach a just settlement of the Cyprus problem. Although serious differences existed between the Greek Cypriot and Turkish Cypriot sides over a final settlement, Christofias took the outcome of the vote as a sign that Greek Cypriots wanted to try once again for an end to the division of the island. In his inaugural address, President Christofias expressed the hope of achieving a "just, viable, and functional solution" to the Cyprus problem. He said that he sought to restore the unity of the island as a federal, bizonal, bicommunal republic; to exclude any rights of military intervention; and to provide for the withdrawal of Turkish troops and, ultimately, the demilitarization of the island. Christofias also reaffirmed that the 2004 Annan Plan, which he himself opposed at the time, was null and void and could not be the basis for a future settlement. After Christofias's election, Turkish Cypriot leader Talat, a long-time acquaintance of Christofias, declared that "a solution in Cyprus is possible by the end of 2008." He also declared that "the goal was to establish a new partnership state in Cyprus, based on the political equality of the two peoples and the equal status of two constituent states." While the negotiations between Christofias and Talat appeared to get off to a fast start, the differences in positions quickly became apparent, and the talks, although held on a regular basis, soon began to bog down. Talat wanted to pursue negotiations on the basis of the provisions of the old Annan Plan, while Christofias, mindful of the Greek Cypriot rejection of that plan, was keen to avoid references to it. Old differences quickly resurfaced. As the negotiations dragged on well into 2009, it appeared that impatience, frustration, and uncertainty were beginning to mount against both Christofias in the south and Talat in the north. By the end of 2009, perspectives on both sides of the island began to change. Some suggested that the Greek Cypriots sensed that the talks would not produce a desired outcome before the April 2010 elections in the north, in which Talat, running for reelection, was trailing in the polls to Eroglu. If Talat lost, it was argued, the negotiations were likely to have to begin anew with an entirely different Turkish Cypriot leadership. Under that scenario, many Greek Cypriots, including members within the political parties of the governing coalition, seemed leery of weakening their hand by offering further concessions. Some Turkish Cypriots, on the other hand, appeared to think that the Greek Cypriot side would not offer Talat a negotiated settlement, betting from the opinion polls in the north that Eroglu would win the April elections and would pull back from serious negotiations, at least for a while as he consolidated his new government and reordered Turkish Cypriot strategy. The Greek Cypriots could then blame the anticipated hard-liners in the north and their presumed patrons in Ankara if the talks collapsed. As the negotiations entered 2010, it appeared that the window of opportunity to reach a final settlement, at least between Christofias and Talat, was closing fast. Despite the fact that the two sides had been in negotiations for almost 18 months and in close to 60 meetings, they appeared to have had very little to show for their efforts. In his New Year message to the Greek Cypriots, Christofias suggested that while some progress had been made in a few areas, the two sides were not close to a settlement. The intensive dialogue between Christofias and Talat resumed on January 11, 2010, but after three sessions the talks seemed to have reached a standstill, with the gap between the respective positions of President Christofias and Talat on many of the tougher issues seeming to be insurmountable. The last formal negotiating session between Christofias and Talat concluded on March 30, 2010, with no new developments. In the run-up to the final session there was some speculation that both sides would issue a joint statement assessing the negotiations up to that point and perhaps even announcing some of the areas in which convergences between Christofias and Talat had been achieved. Speculation was that Talat had wanted something positive to take into the final days of the election campaign and had presented Christofias a report summarizing what the Turkish Cypriots understood to have been achieved. Christofias, however, was already under pressure from his coalition partner, DIKO, and former coalition partner, EDEK, not to issue such a statement, which could have been interpreted as an interim agreement. On March 30, 2010, Christofias and Talat issued a short statement suggesting that they had indeed made some progress in governance and power sharing, EU matters, and the economy, but they did not go beyond that. On April 1, Talat, feeling he needed to say more to his Turkish Cypriot constituents about the negotiations, held a press conference at which he outlined his understandings of what he and Christofias had achieved to that point. Christofias would neither confirm nor deny what Talat had presented. On April 18, 2010, Talat lost his reelection bid to his rival Dervis Eroglu of the UBP. Observers believe Talat's defeat was due to a combination of his failure to secure a settlement of the Cyprus problem after almost two years and his inability to convince the EU and others to help end what the Turkish Cypriots believed was the economic isolation of the north. Some observers also noted that an overwhelming number of mainland Turks who had settled in the north and who continued to identify more with mainland Turkey had little interest in unification with Greek Cyprus and supported Eroglu because they believed his views were consistent with theirs. Eroglu, then a 72-year-old physician and long-time politician, won the election with just over 50% of the vote. Eroglu was seen as having a combative style and hard-line views similar to former Turkish Cypriot leader Rauf Denktash, particularly in seeking more autonomy for each community. Eroglu also headed a party in which some of its followers had advocated a permanently divided island and international recognition for the TRNC. It was reported that during the campaign Eroglu may have suggested that perhaps Cyprus should consider a kind of "soft divorce" similar to what the Slovaks and Czechs did when they separated. During the campaign, Eroglu also criticized Talat for what he thought were too many concessions to the Greek Cypriot side, including the agreement that a reunited Cyprus would hold a single sovereignty through which both sides would reunite. Nevertheless, even while criticizing Talat's positions, Eroglu insisted that negotiations would continue under his presidency. Upon assuming his new office, Eroglu wrote a letter to U.N. Secretary-General Ban Ki-moon expressing his willingness to resume the negotiations under the good offices of the U.N. and at the point where the negotiations between Talat and Christofias had left off. Despite Eroglu's position regarding the resumption of talks, most political elements on the Greek Cypriot side saw Eroglu's election as a negative development and expressed their skepticism as to what the future would hold. On May 26, 2010, President Christofias and Turkish Cypriot leader Eroglu held their first formal negotiating session. The meeting was held under the auspices of the U.N. Secretary-General's special adviser on Cyprus, Alexander Downer. Almost immediately, a controversy arose when it was reported that Downer read a statement from U.N. Secretary-General Ban congratulating the parties for starting the talks again from where they left off (including the confirmation of existing convergences agreed to by Christofias and Talat), for agreeing to abide by U.N. Security Council resolutions on Cyprus, and for suggesting that a final agreement could be reached in the coming months. Downer's statement immediately drew criticism from several of the Greek Cypriot political parties that were concerned that the references to the convergences arrived at by Christofias and Talat were being considered as agreements by the U.N., a position not shared by the Greek Cypriots. On the other hand, apparently after the May 26 meeting, Eroglu made a statement that the Turkish Cypriots would not be bound by the statement of the U.N. Secretary-General, especially with regard to previous U.N. Security Council resolutions, some of which did include calls for Turkey to withdraw its troops from Cyprus. While Eroglu was trying to clarify that he accepted U.N. resolutions on the parameters of the negotiations, some in the Greek Cypriot leadership seem to question whether Eroglu was trying to redefine the basis under which he would proceed with the negotiations. When the talks resumed in May 2010, Christofias and Eroglu, along with several technical committees and working groups with representatives from both sides, met regularly but made no apparent progress. In September, in an interview with Greek Cypriot press, Eroglu expressed his frustration with the process and accused the Greek Cypriots of treating Turkish Cypriot positions with contempt. He apparently suggested that Christofias needed to inform the Greek Cypriot people that any final solution would involve pain on both sides but also had to minimize social upheaval, especially among the Turkish Cypriot community. When asked what pain Eroglu was prepared to accept, however, he stated that it would not include giving up the Turkish Republic of Northern Cyprus or its flag or sending mainland Turks who settled in the north back to Turkey. In October 2010, Turkish press reported that Eroglu appeared so frustrated with the negotiations that he suggested that Turkish Cypriots had become fed up and no longer believed in the possibility of a mutually agreeable settlement. "As time passes," he said, "the willingness of the two communities to live together is diminishing." For his part, Christofias told the U.N. Secretary-General in September 2010 that both sides were not coming closer to a settlement and that Turkey, given its own domestic and regional problems, "was not ready to solve the Cyprus problem." Although assessments of the negotiations appeared to grow more pessimistic, additional sessions were held through the end of December. Talks were then suspended while Eroglu tended to medical problems. While both sides continued to talk and continued to pledge to seek a solution, neither side had indicated whether progress was being made or that any compromises were possible. On January 1, 2011, Christofias declared his disappointment over the passing of another year without a settlement and accused Turkey of not making any effort to promote a solution to the Cyprus issue. In mid-April 2011, the Republic of Cyprus entered into a parliamentary election period that concluded on May 22. The outcome of the elections did not seem to suggest that the negotiating position of Christofias would require changes. Although opposition to what was perceived to be Christofias's concessions to the north was voiced during the campaign, none of the three parties with the most hard-line views—EDEK, the pro-Europe EVROKO party, and DIKO—increased its vote share. The impact of the elections would later prove problematic for the negotiations. Similarly, in national elections held in Turkey in June, Cyprus was barely an issue among the competing parties. After the election there was some speculation that then-Turkish Prime Minister Recep Tayyip Erdogan, having won another five-year term, might have been prepared to inject some positive new energy into the Cyprus negotiations in order to help Turkey's flagging accession negotiations with the EU. Later this seemed to have been a misreading of the prime minister's intentions. Throughout 2011, Christofias and Eroglu continued their futile negotiations, which also included two meetings with U.N. Secretary-General Ban in another attempt by the U.N. to boost momentum for the talks. Ban insisted that the negotiations be stepped up and that the three would meet on October 30 to assess what progress had been achieved. The U.N. would then be prepared to organize an international conference to discuss security-related issues as Turkey suggested. This would be followed by plans to hold referenda on a final solution in both the north and south by the spring of 2012. The hope among some was that by intensifying the negotiations and reaching a solution by the end of 2011, a potentially reunified Cyprus would be prepared to assume the rotating presidency of the EU on July 1, 2012. By the fall of 2011, both sides seemed to have lost a clear urgency to achieve a final solution. Trying to reach a negotiated settlement by the end of October became impractical. As 2011 ended, pessimism abounded, with many feeling that what had not been accomplished in the previous two years could become very difficult to achieve in 2012 as the Republic of Cyprus entered into full preparation for its EU presidency. Many felt that unless there was a major breakthrough in the negotiations by early 2012, the talks would become even more stalemated and could culminate in a potential dramatic turn of events by the summer. Doubts about the prospects of a solution acceptable to both sides were also raised with the release of a public opinion poll that apparently found a growing negative climate and public discontent on the island, an increased ambivalence on the part of Turkish Cypriots, and a possible shift toward a no vote for reunification among Greek Cypriots. The poll also found that society on both sides needed to begin a very public discussion of the parameters of the negotiations and that confidence-building measures were needed to be implemented to increase the levels of trust in the peace process. As 2012 began, both sides were again preparing to travel to New York for a fifth meeting with Ban to assess the progress of the negotiations. Ban had asked both Christofias and Eroglu to come to New York on January 22-24 with significant offers in the areas of governance, economy, and EU affairs so that the "Greentree 2" meeting could facilitate a final deal that would allow the U.N. to convene an international conference in the spring to resolve security-related issues and allow referenda on a final agreement in both the north and south by early summer of 2012. It appeared, however, that even before arriving in New York, neither Christofias nor Eroglu was willing or able to make necessary concessions on the difficult issues of property rights, security, territory, mainland Turks who had "settled" in the north, or citizenship—areas where both sides had long-held and very different positions. The uncertainty of what could be achieved prompted Christofias to question whether the meeting should take place at all. The lack of any progress to that point led some in the Greek Cypriot opposition to suggest the meeting be cancelled and warned Christofias not to accept any deadlines or U.N. arbitration or agree to an international conference without explicit agreements on internal issues. Nevertheless, Greentree 2 took place, and it was reported that both sides had submitted to Ban extensive proposals that each felt could provide the basis for a solution. The Greentree meetings concluded without any new agreement to end the stalemate and led an apparently frustrated Ban to say that he would wait until he received a progress report from his special adviser at the end of March 2012 before deciding whether to convene an international conference, despite Christofias's opposition to any such decision. Christofias and Eroglu resumed their direct negotiations in mid-February, but it appeared unlikely that the stalemate could be broken at that point and that the potential for any agreement looked to be delayed—not only until after the EU presidency in the latter half of 2012, but also until after the February 2013 national elections in the republic. In early April, it was reported that the Turkish Cypriot side had suggested that the U.N.-sponsored talks be terminated once the republic assumed the EU presidency on July 1, 2012. This prompted President Christofias to respond that Turkish Cypriots were no longer interested in a solution, even though, as Christofias suggested, the talks could continue during the EU presidency, as the two issues were not related. In May 2012, and with the EU presidency fast approaching, Christofias understood that the talks could not have achieved anything positive, and although he insisted that the negotiations could have continued during the EU presidency, the U.N. did not. U.N. special envoy Alexander Downer then announced that Ban had decided not to call for an international conference on Cyprus due to the lack of agreement on core domestic issues and further stated that the U.N. would no longer host the leaders' "unproductive" talks. Downer said that the U.N. would reconvene the meetings "when there was a clear indication that both sides had something substantial to conclude." By mid-2012, the convergence of several factors led to the suspension of the talks. One factor was Christofias's intent to make the republic's presidency of the EU a success. Christofias clearly did not want a divisive debate over what would have probably been an unpopular agreement—even if he and Eroglu could have negotiated a settlement—to detract from or ultimately overshadow the Cyprus EU presidency. Eroglu's pronouncement that he would not meet directly with President Christofias during the six-month EU presidency, despite the fact that the settlement negotiations were not part of the presidency's mandate, was also a factor. The emergence of the fiscal and budget crisis in Cyprus brought on in the aftermath of the larger Eurozone crisis also contributed to the demise of the negotiations. Christofias realized that managing a serious fiscal crisis and the presidency of the EU simultaneously would leave, in reality, little time for him to continue any regular negotiations with Eroglu. On May 14, 2012, recognizing his own internal political realities and reverting back to an earlier statement that he would not seek reelection if he was not able to resolve the Cyprus problem, President Christofias announced that he would not seek reelection in 2013, stating that "there are no reasonable hopes for a solution to the Cyprus problem or for substantial further progress in the remaining months of our presidency." By the end of May 2012, the U.N.-sponsored talks, having essentially reached a stalemate, were formally suspended. Neither Christofias nor Eroglu strongly objected to the U.N. decision. While both sides blamed the other for a lack of progress on an agreement, the reaction to the downgrading of the talks appeared to be muted among both the political leaders and the general publics in both communities. In early June, Kudret Ozersay, then the chief adviser to Eroglu for the negotiations, resigned, further signaling that the talks, even at the technical level, would not continue at the same pace. However, Ozersay was soon replaced by Osman Ertuğ as chief negotiator. In January 2013, the Republic of Cyprus entered a period of national elections. With Christofias out of the picture, Nicos Anastasiades of the center-right, democratic DISY party, with the backing of the conservative DIKO and EVROKO parties, emerged as the leader in early public opinion polls. DIKO had been part of the previous Christofias-led government but withdrew from the coalition in disagreement over some of the positions Christofias took in the negotiations with the Turkish Cypriots. Anastasiades's closest challenge came from the AKEL party itself, led by Stavros Malas. Although Anastasiades took the largest number of first round votes, he was forced into a runoff with Malas but eventually emerged victorious. During the campaign, neither candidate offered many concrete proposals regarding the negotiations with the Turkish Cypriots, as the fiscal and budget crisis took center stage. Anastasiades, who had backed the 2004 Annan Plan for a Cyprus settlement, appeared cautious about his intentions other than calling for a settlement, perhaps not wanting to cause a public rift with his DIKO and EVROKO allies, who had opposed the Annan Plan. While foreclosing new discussions based on the old Annan Plan, Anastasiades had suggested that the basis of future talks would have to be broad understandings reached in 1977 and 1979 between the Greek and Turkish Cypriot leadership at the time as well as a 2006 set of principles agreed to by former Cypriot leaders. He also suggested that as president he would not be directly involved in the day-to-day negotiations but would, in time, appoint someone as his representative and principal negotiator. Upon being sworn in as president, Anastasiades did reach out to the Turkish Cypriots, referring to them as citizens of Cyprus but not giving any clear signal as to his timetable for restarting the negotiations. On the other hand, Yiannakis Omirou, then-leader of the parliament, stated that a new national policy was necessary: "We need to denounce the Turkish stance to the international and European community and redefine the Cyprus problem as a problem of invasion, occupation and violation of international law." The new policy, Omirou went on, "must set out the framework for a Cyprus solution and use Cyprus's EU membership and Turkey's EU prospects to exert pressure on Ankara to terminate the island's occupation and accept a solution, in accordance with international and European law." Initially, the Turkish Cypriots appeared cautious about which negotiating partner they expected to see across the table if and when the talks resumed. Would it be Anastasiades, who earlier was sympathetic to many of the provisions of the Annan Plan, or a different negotiator, who was critical of the previous government's negotiating positions and had teamed with what the Turkish Cypriots believed to be hard-line partners who either withdrew from the previous government coalition in part because of the reported "concessions" being offered by Christofias or were consistently critical of the previous government's approach? The Turkish Cypriots had also seemed to set a new standard regarding their own status as a prelude for resuming the talks. Eroglu had stated that the talks could not resume automatically from where they left off and had begun referring to the two "states," a "new dynamic," a "new negotiating table," and a timetable for concluding whatever talks did resume. Even as Anastasiades was being inaugurated, he had to turn his attention to the serious domestic banking and fiscal crises facing the republic. At the same time, Turkish Cypriot and Turkish leadership began to publicly pressure Anastasiades to restart the settlement talks as soon as possible, although it appeared that the Turkish Cypriot side was not proposing any significant compromises or new ideas that would move the talks forward. This prompted Anastasiades to respond that he would not be forced to the bargaining table during this period of economic turmoil and was committed to first addressing the government's fiscal crisis. In mid-May, Foreign Minister Ioannis Kasoulides traveled to New York and Washington to assure everyone that the leadership of the republic was indeed interested in resuming the negotiations but that they needed time to get a handle on the economic crisis on the island. He also made it clear that the Anastasiades administration would not be bound by any previous convergences discussed between his predecessor Christofias and Eroglu and would not agree to any definitive timetable to conclude the talks. Kasoulides also floated the old idea, previously rejected by the Turkish Cypriots (and opposed by some Greek Cypriots who wanted a comprehensive agreement), that as a confidence-building measure on the part of Turkey, the abandoned town of Verosha should be returned to "its rightful owners." In exchange, the Turkish Cypriots could be permitted to use the port of Famagusta for direct trade with Europe under the supervision of the EU. Turkish Cypriots also traveled to Washington with a more upbeat message that 2014 would be a good year to reach an agreement. The Turkish Cypriots, however, rejected the return of Verosha and began speaking more publicly and more often of "the realities on the island," referring to two separate coequal states as well as timetables for concluding the talks. Eroglu had stated that "while there is a Greek Cypriot administration in the South, there is the TRNC state in the North." Ankara, for its part, had already suggested that while it was ready to say "yes" to a negotiated solution, a two-state option was viable if talks could not restart and produce a solution in a timely fashion. Eroglu stated in December 2012 that "the Cyprus problem cannot be solved under existing conditions" and that "a possible settlement of the Cyprus issue could be viable only if it is based on the existing realities on the island," which acknowledges that "there were two different people having two separate languages, religions, nationality and origin and two different states" and that "certainly it was possible to find a solution to make these two people live together, however people should bear in mind, it is [not] realistic to establish one state from two separate states." In late May 2013, Anastasiades and Eroglu finally met, and Anastasiades restated his support for the resumption of the talks but again indicated that the talks could not restart until perhaps October 2013. In July, the Greek Cypriot National Council took the day-to-day responsibility for the negotiations out of the hands of the president, as had been the practice since 2008, and appointed Ambassador Andreas Mavroyiannis of the Foreign Ministry as the Greek Cypriot negotiator. This action increased speculation that the Greek Cypriots were close to proposing that preliminary discussions begin with the goal of resuming the formal negotiations. Throughout the remainder of 2013 and into the beginning of 2014, both sides repeatedly argued over how to restart the talks despite repeated assurances from both sides that they remained committed to restarting the negotiations. Through that period, neither side had been willing to reach agreement on the language of what the Greek Cypriots insisted should be a "joint statement" redefining a set of negotiating goals or outcomes that both sides would strive to achieve. The Turkish Cypriots initially rejected the idea that such an opening statement was necessary but then decided to negotiate language they could be comfortable with. Negotiations between Mavroyiannis and Osman Ertuğ took almost six months to conclude. On February 8, 2014, after what appeared to be a significant intervention by the United States, the Cyprus press reported that an agreement on the language of a "joint declaration" had been reached and that Anastasiades and Eroglu would meet right away to relaunch the negotiations. This was further confirmed when the "joint statement" was released to the public a few days later. The Declaration, which to some became the most comprehensive agreed document on the Cyprus question since the High Level Agreements of 1977 and 1979 or the Annan Plan of 2004, now serves as the basis of the current negotiations. The agreement on the language of the joint statement, however, did not come without a political price for Anastasiades. On February 27, the leader of the government's coalition partner, DIKO, Nicolas Papadopoulos, announced that it was leaving the government in disagreement over the way President Anastasiades was handling the negotiations, much as they did when they quit the Christofias government. It appeared that Papadopoulos—whose father, former President Tassos Papadopoulos, had opposed the Annan Plan—was concerned that Anastasiades had tacitly accepted some of the past convergences that DIKO had opposed. The fact that the joint statement referred only to a "united" Cyprus and not the Republic of Cyprus may have again suggested to DIKO that Anastasiades had come too close to accepting an autonomous Turkish Cypriot state over which the Greek Cypriots would have little or no authority or jurisdiction. Curiously, Ertuğ left his post as negotiator after the Declaration was announced but continued to serve as Eroğlu's spokesperson. The Turkish Cypriots then reappointed former negotiator Kudret Ozersay, one seen as more willing to seek accommodation, as their representative to the talks. Negotiations resumed between Mavroyiannis and Ozersay, with Anastasiades and Eroglu meeting periodically. It remained unclear exactly where the starting point for each of the "chapters" of issues to be negotiated had been set. Both sides had earlier insisted that they would not be bound by past convergences thought to have been achieved in previous negotiations. However, the February joint statement referred to the fact that only "unresolved" issues would be on the table, suggesting that perhaps some previous agreements had, in fact, been accepted. Such a long disagreement first over the need for, and then the language of, the joint statement indicated to many observers that it would continue to be difficult to reach a final solution, particularly in 2014, which marked the 40 th anniversary of the 1974 deployment of Turkish military forces to the island and the 10 th anniversary of the Greek Cypriot vote against the Annan Plan, events that would be observed in very different ways on each side of the island. The pessimism surrounding the potential continuation of the stalemate prompted one well-respected Washington think tank to suggest that a permanent separation of the two sides might become inevitable and that serious consideration should be given to such a possible outcome. The talks did resume in 2014, with Anastasiades and Eroglu meeting several times. In early July, Eroglu was said to have submitted a "roadmap" toward a settlement, which included a national referendum to be held by the end of 2014. This was apparently rejected by Anastasiades. Later in July it was reported that the Greek Cypriots had tabled a 17-point plan addressing their positions on issues for a future agreement while the Turkish Cypriots submitted a 15-point counterproposal. Both proposals were apparently rejected. Not only was there disagreement on how to go forward, but there had been reports that both sides had actually backtracked on several issues (see below). These and other reported roadblocks to the negotiations prompted Greek Prime Minister Antonis Samaras to say in July that no "significant progress" had been made and the Turkish Cypriot official for foreign affairs, Ozdil Nami, to suggest "the peace talks were finished." The last meeting between Anastasiades and Eroglu before a break for the summer was held on July 26 and was reportedly a somewhat tense session, with Anastasiades expressing his frustration with the Turkish Cypriot side. In late August, the United Nations named Norwegian diplomat Espen Barth Eide as the Secretary-General's new special adviser on Cyprus. The talks, hosted by Eide, resumed in September, and when Anastasiades and Eroglu renewed their meetings on September 21, Turkish Cypriot negotiator Kudret Ozersay stated that he felt that "real negotiations are starting now." Unfortunately, Ozersay's optimism did not last very long. Near the end of September, Turkey, sensing an increased interaction among the Republic of Cyprus, Greece, Israel, and Egypt over energy resources in the Eastern Mediterranean, decided, in what was seen as a provocative act, to move its own seismic exploration vessel into the Republic of Cyprus's exclusive economic zone (EEZ) off the southern coast of the island. Turkey then issued what was referred to as a "navigational telex" (NAVTEX) stating that the seismic operations could last until April 2015 unless the Turkish Cypriots were given more of a role in decisions regarding the island's natural resources, specifically energy. Reacting to Turkey's decision to establish a presence in the Cypriot EEZ, President Anastasiades announced in October that he was withdrawing from the settlement negotiations and declared that the talks would not resume until the Turkish seismic vessel was withdrawn from Cyprus's EEZ and the NAVTEX was rescinded. By March 2015, the seismic ship had moved to the port of Famagusta, but the NAVTEX had not been withdrawn. Although the Greek Cypriots insisted that all of the island would eventually benefit from any resources exploited in the waters off the coast, they pointed out that energy, under the provisions of the joint statement agreed to earlier, would be considered a "federal-level" issue and would become part of the dialogue once an agreement was reached. The Turkish Cypriots, for their part, demanded that energy issues become part of the formal settlement negotiations once they resumed. In late October 2014, with the negotiations suspended, Turkish Cypriot negotiator Ozersay was replaced by Ergun Olgun. The suspension of the talks, precipitated for some by an unnecessary action and a possible overreaction, again raised serious doubts regarding the commitment of both sides to achieve a solution that left one former British foreign secretary stating that "the international community should accept the reality that there is division and that you have partition." Through the first four months of 2015, the talks remained in suspension with Anastasiades continuing to hold that Turkey would have to withdraw its seismic ship, rescind the NAVTEX issued in January, and stop threatening existing energy exploration activities off the southern coast of Cyprus. Some believed that political pressure from what would be his normal domestic political allies had forced Anastasiades into a corner, preventing him from backing down from this demand despite some domestic and international pressure to do so. Others believed he was under pressure to hold off on the talks until the national elections in the north, scheduled for April 19, were concluded. By mid-April 2015, Turkey had removed its seismic vessel from Cyprus and did not renew the NAVTEX. However, the election campaign in the north had begun, and both sides accepted the fact that the negotiations would not resume until after the elections. On April 19, Turkish Cypriots went to the polls to elect a new "president." Seven candidates were on the ballot. The incumbent, Dervis Ergolu, emerged with a thin margin of votes over the runner up, Mustafa Akinci, but did not win enough to avoid a second round of voting. On April 26, in the second round of voting, Mustafa Akinci of the small, center-left, Communal Democratic Party (TDA) won the election to become the new leader of the Turkish Cypriots, defeating Eroglu with 60% of the votes. Akinci, a three-time "mayor" of the Turkish Cypriot-administered half of Nicosia, immediately announced that the negotiations would resume as soon as possible in May and that it was his intention to conclude a settlement agreement by the end of 2015. In congratulating Akinci on his election, Anastasiades confirmed that he, too, looked forward to restarting the negotiations as soon as possible. Akinci leads a small political party that played little, if any, role in previous governments or the past negotiation process. His candidacy initially was criticized by some who claimed he was inexperienced. For others, Akinci entered the negotiations unencumbered with any preconditions for the talks or for a settlement. However, while Akinci controlled the "presidency," his party did not control the government. Akinci also did not initially meet with all of the other Turkish Cypriot political parties, and he seemed determined to rely on the business and nongovernmental organization (NGO) communities to help develop and articulate his negotiating positions. It did not take long for the two sides to meet. On May 11, 2015, the U.N. Special Envoy hosted a dinner for the two leaders in what was described as a relaxed and positive setting. Akinci quickly named Ozdil Nami, the former "foreign minister" in the Eroglu government, as the new negotiator for the Turkish Cypriot side. On May 17, 2015, Anastasiades and Akinci held their first formal negotiating session. On May 23, the two leaders took the unprecedented step of walking together down Ledra Street, the symbolic dividing line of the island, in a show of solidarity and hope that this time things would be different. This was the first time that a president of the republic stepped onto territory normally referred to as "occupied" land. Since then, the two leaders have met regularly, including an intensified series of meetings in August and September 2016. The reaction to Akinci among some, although not all, Greek Cypriots appeared to be positive but restrained, with a somewhat upbeat "wait-and-see" attitude prevailing. Many appeared to be relieved that Eroglu and his hard-line approach to the negotiations were gone. With little in the way of determined political opponents acting as a restraint on his negotiating strategy, some felt that Akinci would be more willing to compromise on some of the issues Eroglu would not budge on. On the other hand, not knowing where Akinci's support for a final deal would actually come from, some were not sure exactly what Akinci could compromise on. In August 2015, Akinci held a round of visits and discussions with the political parties, NGOs, and the business community apparently to assess exactly how much leeway he had for compromise. Turkey was another factor for Akinci. Akinci was not seen as a favorite of Ankara during the elections, and Ankara was likely surprised with the margin of his victory. The government in Ankara offered the obligatory congratulations to Akinci, and Turkey's President Erdogan visited the island to meet with the new leader. In fact, it was reported in the Turkish press that Akinci and Turkish President Erdogan had exchanged some unpleasant words immediately after the election. In his victory statement, Akinci reiterated his campaign position that the status of the relationship between Turkey and Turkish Cyprus should change. "It should be a relationship of brothers/sisters, not a relationship of a motherland and her child," he had said. This provoked a somewhat angry response from Erdogan and led the Turkish press to question the future of Turkey's support for the negotiations. In an editorial in the April 28, 2015, edition of the Hurriyet Daily News , the author suggested that Akıncı has been away from active politics for more than a decade. His team is mostly composed of young people unaware of the delicacies and history of the Cyprus problem. Anastasiades might try to score an easy victory. If the Cyprus talks between the "novice" Akıncı team and a ravenous Anastasiades team somehow agree on a deal that favored the demands of the Greek Cypriots, Akinci could dangerously risk fundamental demands of the Turkish Cypriots, forcing the whole process to be derailed in a manner very difficult to revive with extreme effort. In an August 2015 interview, Emine Colak, the former Turkish Cypriot "foreign minister," indicated that Turkey was not trying to manipulate the peace talks and seemed, for the moment, content to let the Turkish Cypriots negotiate their own agreement. Some observers attributed this "hands-off" approach by Turkey as a reason why a positive atmosphere had surrounded the talks and why some concrete progress seemed to have been made. Over the summer and fall of 2015, as the negotiations continued on a regular pace, several new "confidence-building" measures were initiated. The two leaders agreed on the opening of a new border crossing at Deryneia, and for the first time in 40 years, electricity connections between the two sides were reestablished. Returning Verosha to the Greek Cypriots continued to be a confidence-building measure that Anastasiades endorsed, but that issue was mostly deferred by Akinci. Despite the positive atmosphere surrounding the talks, there were words of caution, particularly from Greek Cypriots, who reminded everyone that there was still a lot of ground to cover. For instance, in early September 2015 several Greek Cypriot political parties officially rejected the notion of a bizonal, bicommunal federation as a part of the solution to the Cyprus problem and criticized reported convergences on population size in the north, the rotating presidency, and particularly Turkey's security role. The concerns expressed by the Greek Cypriot opposition were not just reserved for Anastasiades. In late December 2015, Akinci, in an interview on Turkish television, seemed to outline some very basic bottom lines, referred to as his "wish list," on the issues under negotiation. The reaction to Akinci's comments drew swift and negative reaction from several Greek Cypriot political leaders, suggesting that trouble for the talks was brewing just below the surface. Former House Speaker Yiannakis Omirou described Akinci's remarks as "highly indicative of the Turkish side's intentions," and said "Turkey effectively seeks to legalize the results of its 1974 invasion. He [Akinci] continues to support the preservation of Turkey's role as a guarantor, and insists on unacceptable views on political equality and rotating presidency." For some in the opposition, this was a warning to Anastasiades that he should seriously rethink his views if he had made any concessions on those issues. During 2016, the road to a settlement remained difficult and, beyond the negotiators themselves, became somewhat more complicated. Internally, in the north, disputes among the political parties in early 2016 forced the more "friendly-to-Akinci" government coalition to collapse. A new, more conservative Turkish Cypriot coalition government formed that did not include representatives from Akinci's party or parties from the previous coalition. The government was led by "Prime Minister" Huseyin Ozgurgun, whose support for the negotiations went from lukewarm to marked by serious doubts. Ozgurgun became more critical of the talks and spoke out forcefully in favor of retaining Turkish security guarantees. In an August 2016 interview, Ozgurgun reminded observers that Akinci's negotiating team did not include any representatives from the government, suggesting that the government and the negotiators were "disconnected." The government also included "Deputy Prime Minister" Serdar Denktash, the son of the former icon of the Turkish Cypriots. Some believed that he retained his father's hard-line skepticism of any deal and had suggested that if an agreement was not reached by the end of 2016, a referendum should be held in the north to determine whether the Turkish Cypriots wanted the negotiations to continue in 2017. Such a referendum idea was dropped as the negotiations entered 2017. Then-"Foreign Minister" Tashsin Ertugruloglu, who opposed the Annan Plan, also had become more public in expressing the view that no agreement could be achieved. These three influential figures eventually became a political problem for Akinci as negotiations toward a tentative agreement were pursued. In the south, elections were held in spring 2016 for the Greek Cypriot House of Representatives. The two largest parties, the governing DISY party and the pro-settlement AKEL, lost some ground, and for the first time a nationalist/populist party (ELAM) entered the House. This party was seen by some as an offshoot of the radical right Golden Dawn in Greece. Although small in number, like several of the other parties, ELAM is skeptical of any power-sharing arrangement with the Turkish Cypriots. In addition to ELAM, in September 2016, the DIKO and Green parties suggested that the parliament pass a resolution stating that no agreement could include "foreign guarantees" and "foreign troops." DIKO's chairman reportedly stated that there no longer was confidence in the president. Despite the internal political developments, both sides proceeded with the negotiations through 2016. The mood appeared to be as positive and constructive as it had ever been, at least among the negotiators, with more frequent references to being farther along on the road to a settlement than in the past. There were also more positive stories in the international press and significant expressions of support for the negotiations from many world capitals, indicating perhaps that progress was actually being achieved. Despite the level of optimism displayed by the leaders of the two sides, many recalled a similarly hopeful atmosphere in early 2008, after Christofias was elected president on a campaign filled with commitments of a quick conclusion to the negotiations. At that time, Turkish Cypriot leader Ali Talat declared that because he and Christofias shared the same vision of a future for Cyprus, the two could overcome years of disagreement and mistrust and that the negotiations could conclude within six months. Akinci's declarations regarding a quick settlement by the end of 2015 raised expectations, but that deadline, never accepted by Anastasiades, was missed—as, subsequently, was the end of 2016 target. To most observers, the two leaders seemed to have come closer to reaching a settlement than at any time since 2004, when the Annan Plan for a settlement and unification of the island was actually voted on (and ultimately rejected by the Greek Cypriots). However, the normal frustrations that inevitably appear in these negotiations again mounted over the two sides' inability to establish an end point at which time an agreement—not perfect, but acceptable to both sides—would be reached. Some Turkish Cypriot leaders, including Akinci, had begun to suggest that the round of talks in 2016 could be the last if an agreement was not reached. By the beginning of August 2016, both sides had insisted that significant convergences acceptable to both leaders had been reached on many issues. At this point, the leaders again raised the possibility of reaching an agreement by the end of 2016. Such a timetable would have allowed them to hold referenda in both communities by spring 2017, possibly before the next presidential election cycle began in the republic. Having agreed to try to reach a settlement by the end of 2016, Anastasiades and Akinci accelerated their negotiations after a short early August recess. In late August and early September, eight intense sessions were held in advance of the U.N. General Assembly's annual meeting in mid-September. The idea was to achieve enough progress by then on many of the basic issues that both sides would then ask the U.N. Secretary-General to convene a five-party conference (with the two Cypriot communities and the security guarantee countries, Greece, Turkey, and the UK) in December to discuss the issue of security guarantees and finalize an agreement. Although no five-party conference was announced at the U.N. meeting, the two leaders returned to Cyprus and agreed to another series of accelerated sessions in October and November, to further address the issue of territory and to move to a multiparty conference on security guarantees with the intention of finalizing an agreement. Despite the progress in areas such as economic affairs, EU affairs, citizenship, and governance structures, serious differences on a rotating presidency, territory, and the sensitive chapter on security guarantees—the first time these issues had been formally discussed since the 2004 Annan Plan—remained wide enough to prevent an actual agreement from being achieved during those sessions. In November 2016, both sides agreed to travel to Mont Pelerin, Switzerland, to further address the more difficult issue of territory and to move to an agreement on holding a five-party conference on security guarantees. During the first week of the Mont Pelerin talks, which began on November 8, progress was reported on several issues and maps depicting what both sides thought should be the new boundaries of the new constituent states were discussed. Disagreement over the amount of territory both sides would eventually claim and the number of displaced persons (mostly Greek Cypriots) who would be allowed to return to the new territories brought the talks to a standstill. The Greek Cypriots demanded that some 90,000 displaced Greek Cypriots be returned to new territory that would come under Greek Cypriot administration. The Turkish Cypriots insisted that the number be closer to 65,000. Faced with the loss of territory and a potential influx of Greek Cypriots into areas once controlled by the Turkish Cypriots, Akinci suggested that no deal on territorial adjustment could be made without a discussion and agreement on security guarantees. President Anatasiades rejected the security-guarantee demand, noting that the Mont Pelerin sessions were only intended to reach an agreement on territorial adjustment and, if accomplished, a discussion of the security issues would be held. Amid this disagreement, the meetings were suspended for one week while both sides consulted with their advisers. Apparently, during this time, Ankara reiterated that the Turkish Cypriots should not agree to any territorial concessions without security guarantees, which could only be agreed to in a five-party or a multiparty conference to include Turkey. When the talks reconvened on November 20 and 21, 2016, no agreement could be reached, as the Turkish Cypriots insisted on a date for a five-party conference and maintained that both territory and security be included in those talks. The Greek Cypriots refused to agree to set a date for the five-party conference, and the talks ended. Both sides returned to Cyprus to reflect on the negotiations and to decide how to proceed. The Greek Cypriots wanted the resumption of the talks to begin where the Mont Pelerin talks on territory ended, including the presentation of maps defining new territorial boundaries. The Turkish Cypriots insisted that the talks could only restart if the Greek Cypriots agreed to a formal date for a five-party conference on territory and guarantees. Not wanting to lose the momentum achieved at that point or to have the talks end, Anastasiades and Akinci on December 1, 2016, after a dinner hosted by U.N. Special Adviser on Cyprus Espen Barth Eide, agreed to meet as necessary in December 2016 and early January 2017. The goal was to bridge the gaps and resolve the disagreements that existed on most issues. In agreeing to the additional meetings, both sides set a timetable that included the following: After the additional meetings, the leaders would meet in Geneva on January 9, 2017, to discuss and wrap up all pending issues, outside of territory and security. On January 11, 2017, the two sides would present their respective proposed maps for a territorial adjustment. A five-party conference with the participation of the guarantor powers would be convened on January 12, 2017, to discuss and settle both the territory issue and the future of security guarantees, paving the way for a final agreement. These new developments again reinforced the observation that Anastasiades and Akinci still felt that a final agreement looked to be achievable. Both leaders subsequently instructed their negotiators to meet regularly and agreed to meet with each other as necessary until January 9, 2017, when the negotiations would reconvene in Geneva. After the missed opportunity at Mont Pelerin, Anastasiades's decision to resume the talks was not without additional controversy. In December 2016, after the announcement that the talks would resume, the leaders of DIKO, EDEK, the Citizens Alliance, and the Greens criticized Anastasiades's decision to accept an international conference on guarantees before resolving the other issues, as he had promised. Anastasiades reportedly was accused of giving in to Akinci's demand for a five-party conference on security without having achieved any territorial adjustments. The Citizens Alliance leader, Lillikas, supposedly asked for Anastasiades's resignation. On January 9, 2017, Anastasiades and Akinci, accompanied by their negotiating teams, leaders of the major political parties, and EU representation, convened in Geneva, Switzerland, to begin what was hoped to be the final phase of the negotiations. The meeting also ushered in a new, historic element of the talks in that the guarantor nations, including Turkey, would be present at the negotiating table. For some, it was curious that Turkey agreed to go to Geneva while Ankara worked through a controversial constitutional referendum at home. Ankara had to be aware that any security concessions in which Turkey was required to withdraw its military forces or forego its right to defend northern Cyprus, at the demand of the Greek Cypriots or Greece, could have been interpreted as weakness, even as Ankara was trying to keep Iran's influence at bay and to negotiate with Moscow over Syria and with the United States over the Kurds. However, once Turkey agreed to attend the Geneva conference, the Greek Cypriots could have used any Turkish refusal to offer meaningful compromises on security and guarantees to prove that Turkey was not interested in seeking a fair solution. Ankara's decision led some to wonder if its presence at Geneva was merely intended to reinforce Akinci's earlier demands that Anastasiades agree to such a conference or to demonstrate that Turkey, despite Greek Cypriot claims that Ankara was not interested in a solution, was indeed willing to continue negotiations. However, Turkey's apparent opposition to certain territorial concessions that Akinci may have offered seemed to complicate the negotiations at a critical time. It is conceivable that Ankara's strategy to inject new complications at Geneva could have been Turkey's attempt to stall the negotiations and build international pressure on the Greek Cypriots to compromise, even on an interim basis, on Turkish troops and guarantees, which would have allowed Turkey's military a face-saving exit from Cyprus and would have reassured the Turkish Cypriots that they would still be protected. The Geneva meetings apparently began on a positive note with what was reported to be a convergence on the sticking point of a rotating presidency and even more public references to a "United Federal Cyprus." Nevertheless, on January 11, 2017, when both sides presented their proposed maps for territorial adjustment to the U.N., the negotiations appeared to veer off course. Although the differences in the amount of territory each side demanded came within approximately 1% of each other, the symbolism of the differences was notable. Each side found the other's demands to be unacceptable. For instance, the Greek Cypriot map included the return of Morphou, whereas the Turkish Cypriot map did not. After failing to accept each other's territorial demands, the negotiations ran into additional problems on January 12, 2017, when the five-party negotiations convened. Ankara rejected the Greek Cypriot territorial demand and insisted that Turkey's security role in the north be preserved; Greece insisted that Turkey's security role end. Other issues, including political equity concerns expressed by the Turkish Cypriots and Turkey's curious demand that the EU's four freedoms (movement of people, goods, services, and property rights), implied in any solution, also be applied to Turkish citizens living in the north, became sticking points. Apparently realizing that the security-guarantee issue and Turkey's future role in the north would not be resolved, and with Anastasiades's rejection of the introduction of the four freedoms proposal, Turkish Foreign Minister Mevlut Cavusoglu departed Geneva. The conference ended, with some questioning why Turkey even attended the meeting. Both sides returned to Cyprus empty-handed and disappointed. Although the Geneva talks came to a surprising and disappointing end, with each side blaming the other, Anastasiades and Akinci would not let the failure to make any significant progress end the momentum for which they had been praised earlier in the conference. The leaders agreed to establish a working group of technical experts to continue ironing out differences and prepare for new meetings later in January or February 2017. That working group returned to Mont Pelerin for two days of what Greek Cypriot negotiator Mavroyiannis described as very positive discussions. Once again, Anastasiades and Akinci were unable to overcome some of the barriers that have blocked their ability to secure a final agreement. In addition, the strong statements voiced by both Greece and Turkey regarding security guarantees raised concern among some that the negotiations had, in part, been taken out of Cypriots' hands and put into the Turkey-Greece relationship. Equally important to the two sides' inability to overcome long-standing differences was the fact that political opposition to the two leaders' negotiating positions had begun to increase. Some in the opposition feared that Anastasiades had come under pressure from the international community to accept only a reduced Turkish military presence in the north and some form of right of intervention. Some complained that U.N. Adviser Eide was favoring the Turkish Cypriot view of "reduce but not remove" Turkish troops or security guarantees. Although opponents of the talks on both sides were invited to Geneva, four of the five major Greek Cypriot political parties took issue with Anastasiades over his positions. Akinci fared no better, with leaders of the Turkish Cypriot government apparently objecting to the map he presented. The opposition forces were so effective at making their views known that Anastasiades had to ask his detractors to calm down and Akinci asked his people to have patience. The two sides' inability to make discernable progress toward a final solution at both Mont Pelerin and Geneva underscored the difficulties of reaching agreement on both territorial adjustments and security guarantees. Turkey's injection of the four freedoms issue could have been an attempt by Ankara to stall the negotiations until after the April referendum in Turkey, while Akinci still wanted Anastasiades to step back from his reported comments that the Turkish Cypriots had to face the fact of a minority status on the island. Nevertheless, as was the case after the failure of Mont Pelerin, both sides anticipated that the two leaders' good relationship would allow negotiations to resume, at least between the Cypriots, after a short time of reflection. The talks did resume on January 27, 2017, and two additional sessions were held in the beginning of February. During that time, the discussions focused on the four freedoms issue and on how and when a possible second Geneva conference could be convened. Anastasiades continued to refuse to discuss the four freedoms and called on the EU to support his position that only the EU could make that decision once an agreement was reached and the north entered the EU. Akinci, for his part, suggested that a new Geneva conference could be held by the end of March 2017, although many thought that unlikely given the mid-April referendum in Turkey. On February 13, however, the negotiations hit a wall. That day, the Greek Cypriot parliament approved a proposal submitted by the right-wing ELAM political party to introduce an annual event in the form of a reading and discussion in public schools to mark the January 1950 referendum on enosis (the union of Cyprus with Greece). Nineteen members of parliament from five parties voted in favor of the proposal, 16 AKEL MPs voted against, and DISY MPs abstained. Akinci was livid that Anastasiades's party did not oppose the legislation and demanded that Anastasiades take action to retract the resolution. Akinci notified the Greek Cypriots that the meeting of the technical negotiators scheduled for the next day would be canceled. When the two leaders met for their regularly scheduled meeting on February 16, 2017, Akinci insisted that Anastasiades reverse the parliament's decision on a commemoration of the 1950 referendum, claiming the enosis issue underscored Turkish Cypriot concerns for their safety and security after a settlement and reinforced the argument for why Turkish troops should remain in the north. When Anastasiades reacted by trying to downplay the legislation's significance, a debate ensued. Reportedly, Anastasiades left the room for a break and, when he returned, found that Akinci had left the meeting. Both sides blamed each other for walking out of the meeting. Over the next eight weeks, no meetings were held between Anastasiades and Akinci despite efforts by U.N. Special Adviser Eide and others to jumpstart the talks. Akinci stated that he would not return to the table until the enosis issue was retracted. In an interview with Anastasiades, the president said he hoped the Turkish Cypriot side and Turkey would reconsider the suspension and return to the negotiating table but he did not expect this to happen before the April referendum in Turkey. While the talks were suspended, each side continued to blame the other for ending the negotiations, and each claimed that it was ready to resume discussions. Although Akinci and other Turkish Cypriot leaders were clearly angry over the enosis issue, some believe Akinci also was stalling on behalf of Turkey, since Ankara could not negotiate on security guarantees and troop deployments until after the vote on the constitutional referendum in Turkey. Eventually, the Greek Cypriot parliament took action to partially reverse the enosis requirement by turning the decisions over how the Greek Cypriot school system would address the historical event to the Education Ministry. Although some in the north complained that this was not enough, and many in the south complained that the government had capitulated to the Turkish Cypriots, Akinci felt Anastasiades had made the effort to diffuse the tension and agreed to return to the talks. On April 11, 2017, after eight weeks of suspended negotiations, both sides agreed to resume the talks and scheduled additional meetings throughout May. Although it is unclear whether any additional progress was made during the renewed negotiations, both sides did eventually begin to discuss the possible need for a new conference on Cyprus in Geneva that would again include the guarantor powers. However, there was prolonged disagreement over the conditions and issues to be addressed at a second conference. The Turkish Cypriots argued that Anastasiades placed preconditions on the meeting and that all outstanding issues should be tackled simultaneously. The Greek Cypriots appeared to want Geneva II to reverse the order of issues to be discussed, with negotiations on territory and security guarantees held first; if those negotiations were successful, the remaining issues in all negotiating chapters would then subsequently be resolved. Both sides agreed that a Geneva II conference would continue until all issues were resolved or until it was agreed that no solution was possible. When the talk of a "Geneva II" conference began to run into trouble as both sides debated whether either side was setting preconditions that had to be met before any session could be convened, U.N. Secretary-General Antonio Guterres invited both Anastasiades and Akinci to New York for a June 4 dinner discussion on the viability of a second U.N.-hosted session in Geneva. After the dinner, both sides announced that a new conference would take place beginning June 28 at Crans Montana, just outside Geneva, with the purpose of finalizing an agreement, including on security guarantees and territory. Guterres also announced that U.N. Special Adviser Eide would prepare a common document to guide the discussions on security and guarantees, after consulting with the two Cypriot sides and the guarantor nations. After leaving New York, Anastasiades traveled to Washington, DC, to meet with Vice President Pence and others to discuss expectations of the upcoming Crans Montana conference. He also appeared to be interested in seeking a U.S. commitment to speak to Ankara in support of finding the necessary compromises needed to secure an agreement. Speaking to a group at the German Marshall Fund, Anastasiades again raised the idea of creating an international police force that would provide the necessary security guarantees sought by the Turkish Cypriots until the provisions of any final agreement were fully implemented and the north was fully integrated into the EU structures. When he earlier offered this proposal, Anastasiades indicated that Greek, Turkish, or UK forces could be part of the multinational force. However, some had suggested that a possible compromise on the concept of a multinational security force could allow Turkish military police or other security forces to be part of such a force but perhaps only if those forces remained in the north and would be under operational command of a third party, such as the U.N., the United States or NATO. Following the announcement of the new conference in Crans Montana, U.N. Special Adviser Eide contacted officials of Greece, Turkey, the UK, and the two Cypriot parties to collect the "bottom line" positions of all sides on the security guarantee and troop level issues. Eide suggested he would discuss the outline of his findings with Anastasiades and Akinci, as well as the level of compromise each side may have been willing to entertain to reach an agreement. Eide hoped to present his document not as an official U.N. document but as a "working roadmap" to what the five parties would negotiate at Geneva. Presumably, Eide considered including other options for providing security, such as a multinational security force. Simultaneously, the other unresolved "domestic" issues would be discussed. Observers of the negotiations were relieved that both sides, along with the three guarantor parties, particularly Turkey, were willing to resume at Crans Montana what had begun at Geneva in January. Others, however, remained skeptical of what actually could be accomplished, as there appeared to be little or no change in the positions on security guarantees and troops on either side. In addition, both Cypriot sides seemed to have changed their strategies for this new conference. It seemed clear at the outset that Anastasiades wanted to reach an agreement on the elimination of Turkish security guarantees and the removal of Turkish troops first; otherwise it would likely provide little political advantage for him to reach agreement on any other issues. For Akinci, it appeared that if he could win enough concessions on issues such as political equality and a rotating presidency, and could be comfortable as a coequal partner in the future of Cyprus, he might have been able to help Turkey make the necessary concessions on security that Ankara may not have been willing to accept otherwise. In the election-charged atmosphere in Greek Cyprus, not everyone was pleased with the outcome. Anastasiades's political opponents accused him of abandoning all the preconditions he set for convening a new conference, including the debate on security and territory as a matter of priority. They also accused him of delegating to the U.N. the role of preparing a document on security, therefore giving up the Cypriot ownership of the process and placing the most crucial issue in the hands of Special Adviser Eide, who many felt had a biased attitude favoring Turkey. Before the opening session of the Crans Montana conference, controversy arose over the security-related "roadmap" U.N. Special Adviser Eide was preparing. In one report, Anastasiades apparently objected to some of the provisions, suggesting they were not points put forward by the Greek Cypriots and that he would not discuss the document in its current form. Eide apparently then abandoned the idea of tabling the discussion paper. On June 28, 2017, the Crans Montana conference opened, with both sides putting forward their long-held positions on security and their differences on the domestic issues. Almost immediately, and predictably, the talks became deadlocked over the security issues. The original plan for the conference called for U.N. Secretary-General Guterres to arrive in Crans Montana on June 30 to review the progress and hold additional meetings with the leaders. After arriving in Crans Montana and facing a deadlocked conference, Guterres apparently issued what was referred to as a "non-paper" addressing six points that he felt needed to be resolved and instructed the two sides to develop a package of proposals in response to his "framework" over the July 1-2 weekend. Guterres said he would return to Crans Montana if the proposals appeared to generate positive movement in the negotiations. On July 3, 2017, both sides presented their counterproposals, which they claimed represented concessions from their previous positions. Turkey insisted that security guarantees under the existing treaties be retained but appeared to offer a proposal that included the withdrawal of most Turkish military forces. A small contingent of both Greek and Turkish forces would remain and their continued deployment would be reviewed in 15 years. The Greek Cypriots insisted that the Treaty of Guarantee be abolished, that most Turkish forces be withdrawn immediately, and—although a small contingent (less than 1,000 each) of Greek and Turkish forces could initially be deployed—that there had to be a clear, short sunset date for those forces to leave. Turkish Foreign Minister Cavusoglu stated that Turkey could not accept a "zero guarantees, zero troops" option and apparently warned that this would be the final conference and that a settlement had to be reached. After several days of talks, little movement was achieved. It was reported that positions may have even hardened between July 3 and July 7, with Turkey insisting on a larger force to remain permanently and the Greek Cypriots withdrawing their proposal for a limited contingency force. Apparently there were also disagreements on several of the governance issues, such as the rotating presidency, the return of the town of Morphu to Greek Cypriot administration, and the rights of former and current owners of property located in the north. On July 7, 2017, U.N. Secretary-General Guterres acknowledged the failure of the negotiations to reach an agreement and announced that the conference would be closed. Guterres indicated that Special Adviser Eide would present a summary report to the Secretary-General and that the Secretary-General would issue a final assessment later in the year. Secretary-General Guterres's proposed "framework" set out six points for discussion. On security , the Guterres paper seemed to suggest that both sides "must begin to recognize that in Cyprus a new security system was needed and not a continuation of the existing one." On t roops , Guterres suggested "that there should be a rapid reduction from the first day, gradually decreasing within an agreed timetable to numbers that would be in line with the old Treaty of Alliance: 950 Greek officers, non-commissioned officers and men, and 650 Turkish officers, non-commissioned officers and men." On territory , Guterres's document says the Turkish Cypriot side needs to adjust the map to address some concerns of the Greek side. On equality , the framework seems to suggest that Turkish nationals living on Cyprus should have a quota that is equitable and that a further discussion is needed on what "equitable" means. On property , the framework suggests that in areas that would be returned to Greek Cypriot administration, the rightful owner would have preferential treatment, but not 100%. In areas that would remain under Turkish Cypriot administration, preferential treatment would be given to current users, but not 100%. And finally, on p ower sharing , Guterres suggested that the issue needed to be discussed further, particularly on the issue of the rotating presidency. On September 28, 2017, Guterres issued his report. While offering a fairly positive assessment of the level of "convergences" both sides had made on each of the six negotiating chapters, his assessment seemed to indicate that only the economic chapter may have been ready to be closed, while the others still had issues to be worked out. In his conclusion, Guterres stated, "I am convinced that the prospects of finally pushing this process 'over the finishing line' will remain elusive without the strongest of political will, courage and determination, mutual trust and a readiness on the part of all parties to take calculated risks in the last and most difficult mile of the negotiations." In the end, he said a "historic opportunity was missed." Guterres, however, reiterated that the U.N. would be available to continue to host future discussions, if and when both sides were ready. In stating their assessments of the conference, both Cypriot sides blamed each other for refusing to make concessions. The Greek Cypriots and Greece also placed blame on Ankara. President Anastasiades indicated that he was ready to resume the negotiations, and, despite Guterres's assertion that this was not the end of the road, several news outlets reported that comments by Turkish Foreign Minister Cavusoglu suggested a Turkish decision to abandon the U.N. framework (bizonal, bicommunal federation) as a solution to the Cyprus problem and to move on to a "Plan B." Several in the Turkish Cypriot government also echoed the theme that negotiations under the current U.N. structure were over. Others pointed out that Akinci may have suggested that the solution of a federation was not possible and that the Turkish Cypriot community would continue to improve its international relations with Turkey's assistance. On August 5, 2017, it was reported that in a speech, Akinci suggested that the only solution now may be for two separate states to exist as neighbors, both in the EU. In a late September meeting at the International Republican Institute in Washington, then-Turkish Cypriot "foreign minister" Tashsin Ertugruloglu stated that the Turkish Cypriots have moved on to a new view that any future negotiations must be based on two states, and that a solution could only include a confederation. More interesting for some at the meeting was Ertugruloglu's suggestion that he could envision establishing an autonomous republic where the Turkish Cypriots would leave authority on foreign affairs and defense to Turkey while the Turkish Cypriots would self-govern internally. Ertugruloglu's comments were met with a good deal of opposition in Cyprus, including from some Turkish Cypriots. The suspension of the negotiations in July 2017 carried over into 2018 (referred to as a period of reflection) as both sides prepared to hold national elections. The 2017 introduction in the Greek Cypriot parliament of the controversial proposal to recognize the 1950 enosis referendum by several opposition political parties posed a serious challenge to Anastasiades and the negotiations. When the election campaign began, some observers felt Anastasiades could again come under a good deal of pressure from his presidential opponents for his failure to gain an acceptable outcome at Crans Montana and his role in squelching the enosis effort. Some believed that entire episode raised the issue of trust with Akinci. During the election campaign, negative views about the negotiation framework were expressed by several Greek Cypriot presidential candidates who questioned the continuation of the goal of a bizonal, bicommunal, federal solution. Many in the north who once looked favorably on Anastasiades's efforts to seek a solution began to feel that the election campaign would leave Anastasiades little room to argue for a settlement if he were reelected. Anastasiades was reelected president after a second round of voting. Unlike when Anastasiades was first elected as a pro-Annan Plan leader, however, this time many Turkish Cypriots, including Akinci, apparently did not anticipate much of a change in the positions Anastasiades had taken during the negotiations. Akinci then stated that the negotiations could not resume under the same U.N. parameters that existed before the collapse of the talks, which he believed had yielded little return. Akinci raised the issue of political equality and demanded a deadline as preconditions for the resumption of talks. Most observers believed the bizonal, bicommunal approach was still valid, but it was unclear whether the new framework raised by Akinci meant a simple review and public agreement on how both sides defined a bizonal, bicommunal federal solution or whether Akinci had begun to shift to a looser "confederation" approach with two separate states. It also was unclear how existing U.N. parameters could be changed. Immediately after the elections in the south, parliamentary elections took place in February 2018 in the north. The election outcome resulted in a new four-party coalition government that some believed would likely be more supportive of Akinci's efforts to renegotiate a new approach to a solution with Anastasiades than the previous government, which was led by those opposed to an agreement or skeptical that an acceptable agreement could be achieved. The new government included two former Turkish Cypriot negotiators, Ozdil Nami (the most recent negotiator) and Kudret Ozersay. The negotiations, however, did not resume immediately after the elections. Anastasiades restated his readiness to restart negotiations and invited Akinci to meet with him informally to discuss the road ahead. Akinci signaled his intention to meet with Anastasiades but only to try to determine exactly what Anastasiades wanted to negotiate and how long it might take. Akinici reiterated his view that the framework of the negotiations had to change. In the interim, tensions over the issue of energy resources spiked, forcing both sides to delay any new meeting. During March and early April 2018, as both sides struggled over the issue of resuming negotiations, they seemed to consider the idea that any new negotiations should begin with the governance issues. In an April 2018 interview in Politis , Greek Cypriot negotiator Mavroyiannis admitted there were differences in every negotiating chapter but that the Greek Cypriot side had accepted the effective participation of the Turkish Cypriots in a council of ministers, the parliament, an equally divided senate, and the judiciary. Mavroyiannis also suggested the Greek Cypriots could accept a rotating presidency, but only with a single ticket and weighted voting. Akinci suggested that the issue of a rotating presidency, among others, had not been resolved. On April 16, 2018, the two leaders sat down over the course of three hours of meetings and dinner, hosted by the U.N., to discuss the road ahead for the negotiations. Expectations were low, and after the meeting both sides acknowledged that no progress had been made with respect to changes in positions or if and when the negotiations would resume. Each side suggested the other needed a change in attitude for any new negotiations to be successful. In May 2018, Akinci, despite his earlier comments regarding a new format for the talks, suggested negotiations could possibly resume from where they left off at Crans Montana if both sides agreed to adopt as a strategic agreement the six-point framework presented by U.N. Secretary-General Guterres on June 30, 2017. Anastasiades rejected a strategic agreement approach, and both sides broke into an extended disagreement over which Guterres document of July the other side was referring to as the framework to be used. Some observers, however, believed that if resuming the talks where they left off at Crans Montana meant starting with the security issues, then the talks were unlikely to resume. Other issues also complicated the talks' resumption. In April 2018, Turkish Foreign Minister Cavusoglu visited the north and suggested the Turkish Cypriots consider negotiating for a "confederation" of two equal states instead of a federation. In May, Cavusoglu again stated that the talks should shift to a confederation or even a "two-state" approach. Akinci apparently did not embrace this approach, and the Greek Cypriots rejected it outright, arguing that it did not fall within the agreed framework of a bizonal, bicommunal federation. In an attempt to assess the two sides' interest in resuming the negotiations and break the stalemate, U.N. Secretary-General Antonio Guterres in July 2018 appointed Jane Holl Lute as his new special adviser to Cyprus. Lute's mission was to consult not only with the two Cypriot leaders but also with Athens, Ankara, and London to assess their perspectives on the future of the Cyprus problem and to determine if sufficient conditions existed for the negotiations to resume. It was unclear why U.N. Representative Elizabeth Spehar's earlier meetings with both leaders could not have helped the Secretary-General make a determination on both sides' political will to restart the negotiations. Nevertheless, Lute conducted a first round of consultations and presented her report to the Secretary-General in September 2018. Lute apparently found some positive aspects but no clear indication that the two sides were ready to resume the negotiations. At the U.N. General Assembly session in September, Guterres met with both Cypriot leaders but apparently found no changes in what Lute had reported. Guterres then submitted a report of Lute's findings to the Security Council. The Secretary-General's report did not break any new ground and essentially restated the option that his July 2017 six-point "framework" presented at Crans Montana should be used as the starting point. The Security Council recommended that the U.N. not abandon the negotiations, if possible. At the time, observers, despite what they may have believed were less-than-optimal conditions for resuming the negotiations, likely assumed that neither Cypriot leader was willing to walk away from the negotiations or that the Secretary-General had not foreseen any potential new hurdles to the eventual resumption of talks. With no apparent progress and little leverage, Guterres suggested that both sides, despite the most recent one-year "period of reflection," take another time-out to consider a comprehensive negotiating plan and be ready to negotiate a solution when the U.N. felt the time was ripe to host the talks once again. In mid-October 2018, Anastasiades and Akinci agreed to meet informally to discuss the possible road ahead. Although they could not find common ground on which to restart the talks, Secretary-General Guterres saw a new opportunity to move the process. He ordered Lute to follow up on the Anastasiades/Akinci meeting and conduct yet another round of consultations with the two Cypriot leaders and the three guarantor countries. This time, however, the Secretary-General tasked Lute to determine during her consultations whether there were grounds for the two leaders to accept what Guterres referred to as a "terms of reference" document that would include his original 2017 six-point framework, those issues on which both sides previously agreed "convergences" had been reached, and a road map for when and how new negotiations would be launched. Lute was given until the end of December 2018 to meet with the principals and construct the terms of reference document. Some thought Lute's deadline was too ambitious, as it was unclear, despite having the Guterres framework for over a year, whether either side would agree to the provisions of the six-point framework (both had expressed objections to parts of it in the past) or whether both sides, despite years of negotiation, could agree on what constituted previous convergences. Observers noted that it took Anastasiades and Eroglu almost nine months in 2013-2014 to reach an agreement on a simple joint statement defining a set of negotiating goals or outcomes that both sides would strive to achieve once they restarted the talks. Some observers also suggested that both Cypriot leaders may have been wary of agreeing to the Guterres terms of reference process, as any agreed document could be interpreted by some as coming close to an interim agreement. Thus, from the beginning, finding agreement as to what would constitute the document was to be a major challenge for Lute. At the same time, and for reasons that remain unclear, in fall 2018 Anastasiades surprised many by publicly suggesting consideration of an undefined, "loose," or "decentralized" federation in which the two constituent states that would emerge under such a federation would have more powers than what had been discussed previously. Anastasiades also has suggested holding a conference in Cyprus to discuss the various parameters of his idea of a decentralized federation. In addition, some reports indicated he was not ruling out discussion of a confederation, which led several of Anastasiades's political opponents to suggest he was even considering a two-state solution. Some Turkish Cypriots expressed skepticism of Anastasiades's suggestion of a decentralized federation, seeing it as either a delaying tactic or a way to reach a settlement without giving the Turkish Cypriots the political equality they sought at any federal level. After Lute concluded her second round of consultations with all parties in mid-December, it apparently had become clear, once again, just how difficult this approach had become. Lute concluded she would have to return to the island in early January 2019 for further consultations. Lute's plan upon returning to Cyprus was to ask the two leaders to review her proposed ideas for a terms of reference document and agree to these terms as the basis upon which new negotiations would begin. It was clear that such an agreement would be difficult to achieve, and in fact Lute's return in early January was short-lived, as no agreement was reached. In April, Lute once again travelled to the island to gauge whether her consultations should continue and to determine the possibility of restarting the negotiations. When she arrived on April 7 she found an adamant Akinci insisting that restarting the formal negotiations could not happen until Turkish Cypriots achieved political equality, demanding that on all issues addressed at the federal level, at least one positive Turkish Cypriot vote would be necessary for the issue to go forward. Anastasiades rejected the idea that a positive Turkish Cypriot voted would be needed for all issues, claiming such a requirement could result in gridlock, but apparently did concede that on certain issues, he was willing to consider such a requirement. For his part, Anastasiades resurrected an older concept of creating a mixed presidential/parliamentary system of government at the federal level that would include a president, who would be a Greek Cypriot, and a prime minister that would rotate between the two communities. Akinci rejected that proposal and criticized Anastasiades for backtracking on agreed "convergences" by dropping the idea of a rotating president, and for his unwillingness to accept the Turkish Cypriots as coequal partners in government. Other Turkish Cypriot political leaders criticized the proposal as creating a Greek Cypriot state. For Lute, four failed attempts to have both sides agree to a terms of reference document that she could present to Secretary-General Guterres as a starting point for resuming the negotiations lead some to note that resuming the negotiations was apparently no closer to being achieved than it was in June 2018. Throughout much of the recent history of the Cyprus negotiations, both sides have periodically reported that various levels of convergences had been reached, mostly on the issues of EU affairs, governance, economics, citizenship, and how to resolve and compensate for disputed property. As intensely as the Cyprus negotiations have been followed in the press and by outside observers, it has always been difficult to determine with any specificity exactly what either side means by the term convergences when referring to agreements on the issues under negotiation. The negotiations are conducted under the principle that "nothing is agreed until everything is agreed"; thus, the term convergences has been used to describe likely agreement without admitting that agreements have actually been reached until all issues have been resolved. In his April 1, 2010, press conference, former Turkish Cypriot leader Talat stated that 31 "joint documents" had been prepared addressing a range of issues. It appeared that both sides agreed in principle that the new federal government would have powers over external relations, EU policies, citizenship, budget matters, and economic coordination. Within these, for instance, was apparently an understanding that one side would hold the portfolio of the foreign minister and the other side would hold the EU portfolio. Still another point had the equal constituent states covering most of the remainder of the governance issues. These convergences seemed to have been written into the later 2014 joint statement between Anastasiades and Akinci. It also appeared that the two sides had agreed on a Senate, equally represented, and a House proportionally represented based on population. There was also reportedly a convergence on a new judicial court that would have equal Turkish and Greek Cypriot representation and an agreement that Cyprus would be represented in the European Parliament by four Greek and two Turkish Cypriot members of parliament. A federal supreme court also was identified in the joint statement. Apparently, on April 15, 2018, in an interview in the Greek Cypriot Politis , Greek Cypriot negotiator Mavroyiannis confirmed that many of these convergences had been reached. When Anastasiades and Akinci began their negotiations, it was not clear specifically what the starting point of the negotiations had been beyond the joint statement issued in 2014. Eroglu apparently drew some pretty strong red lines around some issues, and Akinci initially had not appeared, at least publically, to have adopted or refuted any particular positions advocated by Eroglu, although many expected that to happen on some issues. Although reports out of Cyprus by the end of 2016 suggested that more than 90% of the governance, power sharing, economy, and European Union issues had fallen under the term convergences, other reports indicated that many technical issues remained unresolved. In his September 2017 report on his mission of good offices in Cyprus, U.N. Secretary-General Guterres appeared to reaffirm that these convergences had been reached. One issue both sides continued to differ over was how a new, united Cyprus would be created. The Greek Cypriots assumed that the new unified state would evolve from the existing Republic of Cyprus. The Turkish Cypriots wanted the new state to be based on two equal "founding states." Eroglu had reiterated that he was not prepared to give up the TRNC. The Turkish Cypriots also wanted the new entity referred to as something other than the "Republic of Cyprus." The joint statement agreed to by Anastasiades and Eroglu in 2014 simply referred to a "united" Cyprus, not a united "Republic of Cyprus." The Anastasiades/Akinci talks initially seemed to suggest that the new entity could be referred to as something such as the "Federal or United Republic of Cyprus," but it was unclear how the two sides would get there. In mid-December 2015, Anastasiades stated that "no one was aiming to abolish the Republic of Cyprus," rather "what we are pursuing is the evolution of the Republic of Cyprus into a bizonal, bicommunal federation." In public statements, including in Washington in summer 2016, then-Turkish Cypriot "foreign minister" Ertugruloglu and others suggested that no agreement could be signed between the leadership of a "Republic of Cyprus" and the leader of the Turkish Cypriot "community." For Ertugruloglu, it appeared that sovereign equality was not the same as political equality, suggesting that the Turkish Cypriots could not accept an agreement unless it was signed by two equal sovereign leaders, implying that recognition of the Turkish Republic of Northern Cyprus was a requirement for a final agreement. In response, then-Greek Cypriot government spokesman Nicos Christodoulides said under no circumstances can "the regime in the occupied areas be upgraded since it is the product of an illegal action." In late 2016, as both sides talked about convening a five-party conference to settle the issue of security and to sign a new agreement, controversy erupted over whether the Greek Cypriots would be represented as the republic. Anastasiades stated that the Republic of Cyprus, as a signatory to the Treaty of Guarantee, had to be represented at the conference. During the Geneva talks in January 2017, the term "United Federal Cyprus" appeared in numerous references to the federal entity that would be created by an agreement. In addition, the Turkish Cypriots apparently also raised the idea that political equality had to include equality for Turkish Cypriots in the new federal entity and that they could not accept a "minority" status or representation in any new federal entity. More recently, the Turkish Cypriots championed the concept of "effective participation," meaning that on any decision taken at the new federal level, there would have to be at least one positive Turkish Cypriot vote in favor of the decision for that decision to take effect. Anastasiades suggested this would effectively give the Turkish Cypriots a veto over every decision that its representatives did not agree with. When the Crans Montana conference began, it appeared that Anastasiades and Akinci may have worked out an understanding on both the issues of political equality and effective participation, but such a convergence was not made public. In April 2018, Anastasiades appeared to have suggested that codecision could not be accepted. Since then, Akinci has continuously demanded agreement on political equality for the Turkish Cypriots, suggesting this issue remains unresolved. One highly sensitive issue under the governance chapter involves that of a rotating president and vice president for an elected term. The Greek Cypriots reportedly had proposed the direct election of a president and vice president on the same ticket with weighted cross-community voting for a six-year term. The president would be a Greek Cypriot for four years, and the vice president would be a Turkish Cypriot; they would then rotate offices, with the Turkish Cypriot becoming president for two years. Turkish Cypriots initially proposed that the executive have two alternating presidents elected by the Senate. Turkish Cypriots were opposed to a single list of Greek Cypriot and Turkish Cypriot candidates to be elected by all of the people of Cyprus principally because Greek Cypriots, by virtue of their majority, could in effect elect the Turkish Cypriot candidate of their preference. At some point, former Turkish Cypriot leader Talat seemed to have made a significant concession in agreeing to accept the Greek position for the election of a president and vice president but only with a weighted cross-community system to address the Turkish Cypriot concerns over the power of the Greek Cypriot majority to elect the Turkish Cypriot candidate, even though he continued to have doubts about direct popular voting. Although the idea of a rotating presidency was not new, opposition to the proposal was, and continues to be, vocal on the Greek Cypriot side, as many Greek Cypriots apparently could not accept the idea of being governed by a representative what many believe is still the Turkish Cypriot minority. It had been reported that in July 2014, Anastasiades retreated on the notion of a rotating presidency, proposing the old idea that future presidents be Greek Cypriots and future vice presidents be Turkish Cypriots elected directly by all voters. The Turkish Cypriots rejected the proposal. Akinci, in early August 2016 and subsequently on numerous times, suggested that a rotating presidency elected with weighted voting was a must in order to have political equality. Although a rotating presidency would apply only to the federal entity and would have limited authority over the daily lives of most citizens in either community, several Greek Cypriot political parties continue to oppose the concept. Greek Cypriot Archbishop Chrysostomos stated his opposition to a rotating presidency, saying that no population of only 18% should be permitted to elect the president. During the Geneva conference, it was reported that a five-year rotating presidency would be created with the Greek Cypriots holding the office for approximately a little over three years and a Turkish Cypriot for just under two years. However, other iterations of the convergence also had arisen. It was reported that at Crans Montana, Anastasiades had held out a concession on the rotating president in return for a Turkish concession on security guarantees. In April 2018, Akinci reiterated that the issue of a rotating presidency had not been resolved and was an absolute requirement on a 2:1 basis. Akinci stated that Anastasiades had not reconciled this matter with the Greek Cypriots. The presidency, however, was only one of several sticking points. For instance, the question of which community would hold the portfolio of foreign minister and how external policy would be made also was controversial, as both sides hold different views on, for instance, Turkey. It also was unclear how a new Turkish Cypriot state could maintain traditional ties to Ankara or the Greek Cypriot state could maintain ties to Athens in light of long-held hostility toward both Greece and Turkey. The thorny and emotional issue of property had been the focus of a significant debate between by Anastasiades and Akinci. As a result of the ethnic strife of the 1960s and the deployment of Turkish military forces on the island in 1974, it was estimated that over 150,000 Greek Cypriots living in the north were forced south and close to 50,000 Turkish Cypriots living in the south fled to the north, with both communities leaving behind large amounts of vacated property, especially in the north. Greek Cypriots had long insisted that the original and legal owners who lost properties in the north must have the right to decide how to deal with their property, whether through recovery, exchange, or compensation. Turkish Cypriots believe that the current inhabitant of a property must have priority and that the issue should be resolved through compensation, exchange of alternate property, or restitution. To try to help resolve some of the property issues, the Turkish Cypriots established the Immovable Property Commission (IPC) to hear cases related to Greek Cypriot property claims in the north. The Greek Cypriots initially rejected the IPC. Only a few private Greek property owners have filed claims for compensation with the IPC, and funding for the IPC has become controversial in the north. Although the gap in the respective Cypriot positions on property had been wide, it appeared that positive movement had been achieved by 2017. In July 2015, Anastasiades and Akinci seemed to agree that former property owners would be offered various choices regarding their claims that would allow all involved to be fairly compensated. For the Turkish Cypriots, however, only a limited number of Greek Cypriots would be permitted to return to or take actual ownership of their properties. However, it appeared that any settlement might involve between €25 billion and €30 billion, a price tag the new "federal" entity might not be able to afford. At Crans Montana, U.N. Secretary-General Guterres's six-point framework proposed that in areas that would be returned to Greek Cypriot administration, the rightful owner would have preferential treatment. In areas that would remain under Turkish Cypriot administration, current users would have preferential treatment. The question of overall territory that would come under the jurisdiction of the two equal states remains in dispute. The Turkish Cypriot side of the "green line" currently includes approximately 37% of the island and includes several areas that had been inhabited almost entirely by Greek Cypriots before the 1974 division, such as Varosha, Morphou, and Karpas. Greek Cypriots have long wanted all of that territory returned, which would leave the Turkish Cypriot side controlling about 28% of the territory. At the time, Christofias resurrected an older proposal that would have the Turkish side return the uninhabited city of Varosha to Greek Cyprus in exchange for opening the seaport of Famagusta for use by the Turkish Cypriots to conduct international trade. The port would be operated by the EU and a joint Greek/Turkish Cypriot administration, thus allowing direct trade between northern Cyprus and the EU. The European Parliament declined to consider an EU Commission initiative to permit direct trade on technical grounds, but its 2011 report on Turkey's EU accession progress (introduced in parliament in 2012) called for that very trade-off offered by Christofias. After the 2013 Greek Cypriot elections, President Anastasiades resurrected the proposal in the form of a "confidence-building" measure to test the sincerity of the Turkish Cypriots and Turkey to move forward in the negotiations. In early August 2014, it was reported that Anastasiades had upped the ante by suggesting that no agreement could be reached unless the town of Morphou was also returned to the republic. The Turkish Cypriots quickly rejected the idea, saying the town would not be returned. After Turkish Cypriot leader Akinci took office, Anastasiades again included the Varosha/Famagusta option as a confidence-building measure. As in the past, Akinci rejected the return of Morphou as part of a final settlement. Understanding the sensitivity of this issue for both leaders, Akinci had suggested that the discussions of territorial adjustments be held off the island and away from potential leaks that could set off a firestorm of protests from either side. At the November 2016 meetings at Mont Pelerin, Switzerland, the two sides agreed to discuss three issues regarding territory: percentage of land to be administered by each constituent state, the number of Greek Cypriots who would be allowed to return to the new territories given back to the Greek Cypriots, and the shoreline. Following Mont Pelerin, both sides, in agreeing to meet in Geneva in January 2017, agreed to present maps indicating their proposals for a territorial adjustment. As noted, the Turkish Cypriots administer approximately 37% of the island. At Geneva, the Greek Cypriots proposed long-standing views that the boundaries be redrawn such that the Turkish Cypriots would control approximately 28.2% of the island and that some 90,000 displaced Greek Cypriots could return to those areas gained back by the Greek Cypriots. Some of the territory—such as the cities of Verosha, parts of Famagusta, and Morphou—would come under direct control of the Greek Cypriots whereas other areas that once had large Greek Cypriot populations would either come under control of the Greek Cypriots or become "enclaves" under the administration of the new federal government. The Greek Cypriots also wanted additional shoreline along the east coast of the island, including part of Karpas. The Turkish Cypriots insisted on controlling at least 29.2% of the island, with as straight of a border between the two constituent states as possible; no enclaves; and only 65,000-72,000 returning Greek Cypriots. The Turkish Cypriots also expressed a willingness to meet the Greek Cypriot demand for more shoreline, but only if the new shoreline territory was made into state parks so that no new Greek Cypriot communities could settle in those areas. On all three points, the leaders failed to reach an agreement at Mont Pelerin and again in Geneva in January 2017. For the first time at Geneva, both sides had presented maps outlining the territorial concessions they were prepared to make. However, when the Turkish Cypriot representatives rejected the return of Morphou, which was included in the Greek Cypriot map, and insisted that additional territory, including the area of Kokkina, be added to Morphou and remain under Turkish Cypriot jurisdiction in exchange for Verosha and parts of Famagusta, the discussions broke down. Both sides apparently withdrew their maps. At Crans Montana, it was reported that Akinci appeared willing to return part but not all of the town of Morphu to the Greek Cypriots but that Akinci wanted to retain additional territory that the Greek Cypriots had requested be returned. In July 2010, President Christofias, seeking to unlock the stalemate on territory, tabled a citizenship proposal that would have linked property, territory, and the number of citizens permitted to reside in the north into one agreement. The offer included an agreement to allow 50,000 mainland Turks who had settled in the north to remain in the north. Eroglu had indicated that any final solution could not result in significant social upheaval in north Cyprus, meaning that significant numbers of citizens of the north, whether from the mainland or not, could not be forced to leave, and only a small number of Greek Cypriots would be permitted to return to property in the north. Eroglu rejected the offer from Christofias, stating that "no one on Cyprus is any longer a refugee" and that sending mainland Turkish settlers back to Turkey was not something he could agree to. Eroglu had also reiterated in his talks with Anastasiades that the number of mainland Turks who had settled in the north and who would be allowed to remain on the island would have to be higher than previously discussed. After the joint statement was agreed to in February 2014, Turkish Cypriot representatives were reported to have stated that no citizens of the north would be required to leave the country. In a talk given at the Woodrow Wilson Center in Washington, DC, on February 28, 2014, the then-Cyprus ambassador to the United States speculated that a resolution of the Cyprus problem could conceivably allow for mainland Turks, who came to the island as long ago as 40 years and had established clear roots in the north, to remain on the island. Akinci, perhaps not wishing to antagonize what had become a majority of the population in the north, initially stayed away from this issue. However, apparently through the negotiations he and Anastasiades may have agreed to at least set population sizes in both of the "constituent" states that would emerge as part of an agreement. The population for the Turkish Cypriots was apparently set at 220,000, although Akinci seemed to want another 50,000, while the Greek Cypriot population would be approximately 802,000. This ratio, while including a sizable number of mainland Turks who have since become citizens in the north, would be close to the ratio of the island's population in 1960. Nevertheless, several of the Greek Cypriot political parties appear to remain opposed to any agreement that would allow a large number of "settlers" to remain on the island. In the summer of 2016, there were reports that Ankara had wanted the Turkish Cypriot government to speed up the process of "citizenship" for more of the mainland Turks living in the north. In August, some news accounts in the media claimed that the Ozgurgun government was trying to rush citizenship for around 26,000 additional mainland Turks before a final agreement was reached. Greek Cypriot political parties jumped on the news and claimed Ozgurgun was trying to sabotage the negotiations. In January 2017, it was reported that Turkish Deputy Prime Minister Turkes stated that there were some 300,000 Turkish Cypriots in the north so the population sizes of the two constituent states would have to be adjusted. In May 2017, Anastasiades reportedly told a meeting of the Greek Cypriot National Council that Akinci had retreated from previous convergences, including accepting a 4:1 ratio of populations. In his September 2017 report to the Security Council, Secretary-General Guterres stated that the "sensitive issue of citizenship, with its links to other key aspects, including the exercise of civil and political rights in the future united Cyprus, was almost completely concluded, with only certain details left to be agreed." Next to the property and territory issues, the issues of security guarantees and Turkish troop deployments continue to be the most difficult bridges to cross. These issues became real stumbling blocks as the two sides met in Geneva in January 2017 and at Crans Montana in July 2017, and they resulted in the collapse of both meetings. The Greek Cypriots long have argued that all Turkish military forces would have to leave the island, beginning immediately after an agreement was adopted. They argue that the U.N. or the EU can offer security guarantees to all citizens in the two member states. Therefore, once the entire island became part of the EU, the Greek Cypriots see no reason for guarantees from third countries, such as Turkey, Greece, or the United Kingdom. By contrast, Turkish Cypriots and Turkey long had maintained that the 1960 Treaties of Guarantee and Alliance must be retained in some form in any settlement, because, without guarantees, the Turkish Cypriots would feel insecure based on their history with ethnic violence on the island in the 1960s. They continuously point out that the U.N. had forces on the island even before the 1974 violence that were unable to prevent the military coup against the Makarios government or to protect the Turkish Cypriot population. They argue that the Greek Cypriots maintain a 12,000-man, fully armed National Guard, while the Turkish Cypriot security forces are smaller and less well equipped and have to rely on the presence of the Turkish military for security. Eroglu had stated on several past occasions that "the security guarantees with Motherland Turkey could not be changed." After the February 2014 joint statement was agreed to, it was reported that Eroglu had again stated that Turkish troops would not leave the island. It remained unclear for a while whether Akinci held the traditional Turkish hard line. He clearly did not want to antagonize Ankara over this issue by going too far into the negotiating process without including Turkey, but he also appeared to have not gone out of his way to focus on the issue. Some suggested that Akinci, while not wanting to abandon the Treaty of Guarantee altogether, may have been willing to adjust the provisions regarding when or under what pretext Turkey could intervene in northern Cyprus in the future and to include the gradual withdrawal of most Turkish military forces, leaving only a small garrison on the island. In one August 2016 news article, it was suggested that Anastasiades had put forward the option that a multinational police force, made up of U.N. or EU personnel with some Turkish police, could be created to support the new federal entity. The Turkish Cypriots and Turkey rejected the idea. In the lead-up to the Mont Pelerin and Geneva conferences, most of the public demands for continued Turkish security guarantees and military presence in the north came from former "foreign minister" Ozgurgun and others in the Turkish Cypriot government who had stated that no agreement could be accepted without the guarantees. Ozgurgun reportedly stated that in conversations with Akinci, he was assured that Turkey must continue to play a role in the security of the north. Nevertheless, as the negotiators at Geneva opened the security guarantees "chapter," the rhetoric increased. Greek Cypriots, and Greece, continued to insist that no guarantees were necessary and, on their part, no agreement could be accepted that would allow Turkey to intervene on the island or to retain a military presence there. In April 2016, the Greek foreign minister reportedly suggested that no final agreement on Cyprus could be achieved until all Turkish military forces agreed to leave the island. With the two sides dug in, compromise seemed unrealistic. Once formal talks on security were begun in late fall 2016, both Cypriot sides appeared to soften their positions. In November 2016, Athens and Ankara agreed to begin bilateral discussions over the future of the guarantees in advance of a meeting between the respective prime ministers and any five-party conference on the issue. According to some sources, although Turkey appeared willing to discuss a revised agreement on security, Ankara initially did not want to discuss the abolition of the guarantees or the complete withdrawal of the Turkish troops from Cyprus. Ankara apparently raised the idea of the establishment of a military base in the north and suggested that the timetable for the reduction of the Turkish military on the island could be 10-15 years. The Greek Cypriots would not accept such provisions but reportedly may have proposed that a small contingent of Turkish troops could remain, but only for a short period of time. At Geneva, Turkey, clearly keeping in mind the fate of its own constitutional reform referendum in April, took a hard line on the issues of continued Turkish security guarantees and troops on the island. The Greek Cypriots and Greece took a similar hard line in opposition to Turkey's continued presence. Apparently, at Geneva, Anastasiades reoffered his proposal for an international police force, this time, however, noting that Greek, Turkish, or UK forces would not be part of that multinational force. Turkey and the Turkish Cypriots rejected the idea again. Russia and others also suggested that the U.N. Security Council could serve as the initial guarantors of security, but that too was brushed aside. At Geneva, the EU was fully represented by the Commission President and the High Representative for Foreign and Security Policy, with each offering assurances that any solution could be adequately implemented and enforced by the EU. Nevertheless, the EU was not able to convince either Ankara or the Turkish Cypriots that it could guarantee the security and fair treatment of the Turkish Cypriot community, even though the north would become fully integrated into the united Cyprus under EU law. The lack of any appreciable progress on the security issue, in part, resulted in the January 12, 2017, session in Geneva being cut short without a resolution. The February 2017 dispute over the introduction of the enosis legislation in the Greek Cypriot Assembly (see above) led Akinci to complain that the enosis issue underscored Turkish Cypriot concerns for their safety and security after a settlement and reinforced the argument for why some level of Turkish troops should remain in the north as well as the need for some type of guarantees for Turkey to assist the Turkish Cypriots, if conditions changed on the island. During the suspension of the talks between February and April 2017, U.N. Special Adviser Eide was reported to have been working out the details of some kind of bridging compromise between the two positions on security as a way to move the talks forward until after a solution was agreed and implementation begun. When the two sides announced that a new conference would be held in late June 2017 at Crans Montana, it was also revealed that Eide would prepare a security "roadmap" from which all five parties could negotiate. The Eide proposal would not be issued as a formal U.N. proposal but as a working paper that would outline the various positions each side had taken on the issue of security guarantees and the possible compromises that could be accepted. Although Eide consulted with the guarantor parties and the two Cypriot leaders, Anastasiades apparently objected to parts of the Eide document and the paper was not presented. At Crans Montana, the same security issues quickly forced the negotiations into deadlock. Although Turkey appeared ready to discuss the removal of most of its troops after an agreement was reached, Ankara rejected any "zero troops, zero guarantees" option and insisted on maintaining a small contingent of forces on the island for at least 15 years, when the issue would be revisited. Turkey refused to agree to any changes to its right to intervene in the north, although the Turkish Cypriots appeared to indicate some flexibility by Ankara on this as the presence of a contingent of Turkish military forces on the island could be used to respond to any problems incurred by the Turkish Cypriots during the implementation of an agreement. The Greek Cypriots and Greece held to their positions that the Treaty of Guarantee be abolished, although Greece suggested a new "treaty of Friendship" between Greece, Turkey, and Cyprus, which apparently would allow for consultations on complaints that implementation of the agreement was not being fulfilled from either Cypriot side. Greece and the Greek Cypriots again insisted that all Turkish troops be withdrawn from the island, although Anastasiades may have appeared ready to accept a small contingent of Turkish troops to remain on the island but only if that provision included a date for the final withdrawal of the remaining Turkish troops. The Crans Montana talks clearly proved that the differences between the two sides on these two security issues had become too high a barrier to be the starting point, or focus, for any new round of negotiations. For many, these issues should be reserved until all the outstanding governance issues have been resolved and an international conference on security can be established again. By July 2018, it appeared that both sides had set the need for concessions regarding the security-related issues as a precondition for resuming the talks. The Greek Cypriots once again insisted that Turkey change its position on retaining troops and security guarantees, and the Turkish Cypriots and Ankara have argued that Anastasiades drop his "zero troops, zero guarantees" position. In mid-December 2018, when U.N. Special Adviser Jane Holl Lute met with Turkish Foreign Minister Mevlut Cavusoglu, he reportedly said that those who dream of zero guarantees and zero troops should let it go, as such a thing will never happen. The introduction of the issue of energy resources resulted in yet another complication in the talks and has stalled the negotiations at times. The energy dispute has led to accusations, threats, and further distrust between the republic, the Turkish Cypriots, and Ankara. Initially, some observers thought the energy issue could have become a rallying point for stepped-up and hopefully successful negotiations in which both sides would enjoy the economic benefits of the newly found resources. However, the atmosphere quickly became poisoned. For some, the energy issue has become not only another lost opportunity but also the issue that has doomed the talks altogether. For the Greek Cypriots, exploiting energy resources offered a potential financial windfall that could help the Cypriot economy and establish Cyprus as an important energy hub for Europe. The Turkish Cypriots, arguing that the energy resources belonged to all of Cyprus, feared the loss of significant revenue to their economy as long as the Greek Cypriots refused to include them until a solution to the division of Cyprus was concluded. For Ankara, insisting that the Turkish Cypriots be involved in the decisionmaking process may have been seen as the only practical way to preserve Turkey's position as a main supplier of non-Russian gas to Europe. Ankara supported the conclusions of some in the industry that the fastest and least expensive route to transport Israeli and Cypriot gas to Europe was via a pipeline through Turkey. For Eroglu, the energy issue had to be a part of the negotiations. The Greek Cypriots rejected such a proposal, stating that energy issues would be dealt with under any new "federal" system agreed to in the negotiations. Akinci, at first, seemed reluctant to press this issue, apparently accepting Anastasiades's promises that energy wealth would be shared by both sides and how that would be accomplished would be left to another time once a settlement was agreed. However, in July 2016, after the republic announced that it would proceed with the issuance of new licenses for additional gas exploration in the Cyprus EEZ, and in August 2016 when it was announced that the republic and Egypt would sign an agreement that could allow Cypriot gas to be shipped to Egypt in the future, both Turkey and the Turkish Cypriots raised objections, with some claiming these actions would harm the settlement negotiations. At Geneva, and despite the news that the French energy corporation, Total, would begin additional exploration in summer 2017 and that Cyprus, Greece, Israel, and Italy would renew discussions of a possible gas pipeline to Europe via Greece, the issue did not seem to impede discussions of the other, more immediate issues. After the Geneva conference, Energy Ministers from the Republic of Cyprus, Israel, Greece, and Italy unveiled plans for an East Mediterranean pipeline running all the way from Israel to the coast of Greece and on to Italy. Total also announced that it would begin a new round of exploration in Cypriot waters during the first few weeks of July 2017. As expected, Turkey and the Turkish Cypriots reacted negatively, with Ankara threatening to take actions if the drilling commenced before an agreement on the Cyprus issue was achieved. As the Crans Montana talks approached, the energy issue again came into play . In May 2017, Akinci stated that the next several months would be crucial in part because of the expected launch of new hydrocarbon exploration activities off the coast of south Cyprus. Turkey stated that it would begin its own exploration in two areas in Cypriot waters that Turkey claims are part of its EEZ and announced that a series of military exercises in the region had been scheduled for July. Some observers believed that Turkey's actions and Akinci's comments were an attempt to pressure Anastasiades to delay the exploration, particularly if the Crans Montana negotiations showed some promise. Others felt this move could set the stage for another confrontation between Turkey and the Republic of Cyprus. When the Crans Montana conference collapsed, French energy firm Total moved its drilling platform, the West Capella, to its drilling site and commenced drilling in mid-July 2017. Ankara reiterated its objections, and Turkey issued a new NAVTEX reserving an area southwest of Cyprus for naval exercises with live ammunition. In the end, Total completed its drilling without incident. This new round of exploration apparently resulted in negligible findings. The Greek Cypriots had also approved additional drilling in 2018 by Total and Italy's ENI as well as by Exxon/Qatar. The ENI group began new drilling on December 31, 2017, in a new area. In February 2018, ENI announced that the drilling had produced a significant find of gas. ENI then announced it would move its drilling platform, Saipem 12000, to another area that is also claimed by Turkey. On February 11, Turkish warships appeared in the waters off the southern coast of Cyprus and attempted to impede the movement of Saipem 12000 to the disputed area. The Greek Cypriots, supported by the EU and others, reacted negatively to Turkey's activity. Over the course of February and March, both Akinci and Ankara restated that the resources around the island belonged to all Cypriots and that the republic should halt further exploration and drilling unless the Turkish Cypriots were included in the planning and decisionmaking, a demand again rejected by Anastasiades. Turkey stepped up its military threats and indicated it would begin its own drilling inside one or two of the disputed blocks in the Cypriot EEZ. Some believe Turkey was concerned that the new gas finds could be significant enough to encourage the Greek Cypriots and others to move forward with various shipping and pipeline options that would exclude the possibility that the gas could eventually be piped across Turkey to Europe. Others felt the Greek Cypriots were trying to apply maximum pressure on the Turkish Cypriots to agree to compromise on several issues demanded by the Greek Cypriots as part of an eventual solution. The United States and the EU both intervened, restating the republic's right to explore for natural resources in its EEZ but asking both the Greek and Turkish Cypriots to tone down the rhetoric and for Turkey not to provoke additional tensions over the energy issue. In a March 15, 2018, press conference welcoming the visit to Cyprus of U.S. Assistant Secretary of State for Europe and Eurasia Wess Mitchell, U.S. Ambassador Cathleen Doherty stated that while the United States supported the republic's right to exploratory activities in its EEZ, the island's energy resources should be fairly shared between both communities in the context of an overall settlement. The Ambassador said that even if the drilling located additional gas deposits, it may not be possible or feasible to commercialize those deposits right away, as costs associated with extraction and transportation may not make the resources viable. She noted that it could take several years, even decades, before all the conditions were right for revenues to begin flowing. In the interim, Ambassador Doherty intimated that the two sides and Turkey should stop the feuding and focus on a solution to the island's division. Assistant Secretary Mitchell, in a summer 2018 speech at the Heritage Foundation, reiterated the U.S. position and stated that Turkey should tone down its provocations in the waters south of Cyprus. He restated that view one week later at a hearing before the Senate Foreign Relations Committee. In November 2018, the energy partnership of Exxon-Mobil/Qatar Petroleum began gas exploration in block 10 of the Cypriot EEZ. Turkey revived its warnings about unilateral exploitation of the resources and announced its intentions to begin drilling in waters that both Ankara and Cyprus claim are part of their respective EEZs. In early 2019, Exxon-Mobile announced that it had found significant gas deposits and would continue to explore the feasibility of extraction. Up until the end of 2018, tensions between the United States and Turkey had threatened to play out over the drilling issue. A slight thaw in U.S.-Turkish relations restrained Turkey from taking any negative actions against Exxon-Mobile's early exploration. However, as Turkey deploys two drilling platforms in the same commercial blocks, tensions could spike again. When Mustafa Akinci was elected as leader of the Turkish Cypriots in 2015, many believed the window of opportunity for a permanent settlement of the Cyprus problem, for all intents closed by Ergolu, had been reopened. As "mayor" of the Turkish Cypriot portion of Nicosia, Akinci had been praised for working cooperatively with his Greek Cypriot counterparts on a number of infrastructure projects, leading some to take a positive view of the possibilities of a settlement between Anastasiades and Akinci. While the political environment on both sides of the island immediately after the election of Akinci had taken on a positive air, with predictions that the negotiations could conclude quickly, the scene reminded Cyprus observers of the 2008 election of Christofias and the almost giddy atmosphere that arose over a possible quick solution to the division of the island with Turkish Cypriot leader Talat. Akinci, much as Talat had with Christofias, declared that he and Anastasiades were of the same generation and could relate more easily to each other and better understand the measures that both sides would have to take to achieve a solution. Negotiations between Anastasiades and Akinci, once begun, got off to a fast start. For many, the first 20 months of the Anastasiades/Akinci era went well. Both leaders seemed to enjoy meeting with each other and doing public events together in a show of solidarity. The positive atmosphere of the negotiations raised hope among some that these two leaders might just reach a settlement. And, although the issues that have separated the two communities and prevented a solution for more than 44 years have long been clearly defined and repeatedly presented and debated by both sides, the chemistry between Anastasiades and Akinci, seen by many as an improvement over the Anastasiades/Eroglu relationship, seemed to allow the leaders to overcome some of the traditional barriers to a settlement more effectively than previous attempts by Cypriot leaders. However, as the talks progressed, with more references to agreed convergences , both Anastasiades and Akinci, as those before them had experienced, began to hear public controversy and criticism of the negotiations emerge from the skeptics and opponents of an agreement. Despite the inevitable level of domestic opposition in both communities and the inability to reach concrete agreements on several governance issues, as well as the security and guarantees issues, Anastasiades and Akinci, at least publicly, seemed determined to continue to seek a solution. The intensity of the negotiations beginning in fall 2016 and continuing through Mont Pelerin and Geneva in 2017 earned both leaders international praise for their commitment and persistence. To most observers, the fact that Anastasiades and Akinci appeared to have come closer to reaching a settlement by early 2017 than at any time since 2004, and that both sides, plus Greece and Turkey, were willing, after the failure at Geneva, to come together again at Crans Montana for another attempt to resolve their differences, seemed to support the growing optimism. Indeed, although a solution for that final settlement remained elusive, the negotiators maintained a level of optimism that a breakthrough was possible. The failure of the Crans Montana conference, despite the framework presented by U.N. Secretary-General Guterres, appeared to be directly related to the disagreement over security issues. Ankara appeared unwilling to accept the replacement of Turkish security guarantees with guarantees from the EU or an interim international security force, despite the fact that some Turkish troops that might have remained under a compromise could have provided security to the Turkish Cypriots during the time the agreement was being implemented. It also appeared Ankara was not willing to forego its geostrategic interests and influence over the island by accepting a longer-term "zero guarantees, zero troops" option. Ankara insisted that some level of troops would remain on the island either permanently or at least for several years, a condition that they knew Anastasiades would continue to reject. Ankara's determination to build a permanent naval base in North Cyprus, raised again in December 2018, seemed to affirm this view. By summer 2018, however, Akinci indicated that he and Anastasiades no longer shared the same vision of what constituted a bizonal, bicommunal federation or whether such a form of government was even desirable at this point. Reports suggested that several governance issues long thought to have been part of the oft referred convergences , such as the rotating presidency, Turkish Cypriot codecision power, political equality, and the population mix in the north, not only appeared to remain unresolved but also may have been pulled back from the status of convergences. Some observers believed that if the two sides could not find common agreement on the governance issues, then arguing over troops and security, as seen at Geneva and Crans Montana, was a futile exercise. In appointing Jane Holl Lute as his new adviser in July 2018, it appeared that Secretary-General Guterres specifically intended to challenge the sincerity of both sides to return to the negotiations. Guterres also appeared to have adopted Akinci's demand for a results-oriented negotiation, first by making it clear that both sides would have to agree to a "terms of reference" document that Lute would draft and then by not letting the talks become open-ended by allowing the terms of reference document, once presented, to be renegotiated. The approach initially seemed to work: Anastasiades reportedly believed the terms of reference could reinforce his position that Turkish military forces would have to withdraw from the island and future security guarantees for the island would have to take another form. Akinci apparently saw some support for his demand for political equality for Turkish Cypriots. Nevertheless, acceptance of the terms of reference would require the restoration of trust between the two leaders, between the Greek Cypriots and Ankara, and perhaps between Ankara and Akinci. As Lute started on her mission, it was unclear whether such trust could be restored. Akinci indicated he was no longer sure what type of solution Anastasiades was looking for and made it clear again that he could not accept changes to the security issues. Anastasiades apparently could not agree to how the Turkish Cypriots defined political equality. Further complicating Lute's task was the fact that the political mindset surrounding the talks began to change, actually pointing both sides in opposite directions. In mid-fall 2018, Anastasiades surprised many by suggesting that both sides might consider some form of a "decentralized" federation. His proposal seemed to suggest that the two constituent states that would emerge under such a working agreement would have more powers than what had been discussed previously, even though he was slow in defining what those additional powers might be. It also was reported that Anastasiades suggested holding a conference in Cyprus to discuss the various parameters of either a decentralized federation or perhaps even a confederation. This proposal resulted in the atmosphere becoming muddled. Some thought that after meeting with Turkish Foreign Minister Cavusoglu at the U.N. in New York, Anastasiades may have become convinced that Ankara would no longer accept a federal solution and that Anastasiades was looking for an acceptable middle ground. Some others assumed that Anastasiades was trying to buy time in the hope that the gas exploration being conducted by Exxon-Mobile and others would produce positive results, thus putting more pressure on the Turkish Cypriots to cut a deal in time to guarantee they would share in the potential revenues generated by the additional gas finds. Akinci expressed skepticism of Anastasiades's proposal, seeing it as undermining his support for a federal solution and a way to try to reach a settlement without giving the Turkish Cypriots the political equality they sought at any federal level. Anastasiades also came under heavy criticism from his political opponents, particularly the leadership of the AKEL party, for what they claimed was an abandonment of the goal of a federal solution. More importantly, when some Turkish and Turkish Cypriot government officials who had begun to sour on a federal solution, particularly Foreign Minister Ozersay, insisted the government should have a say in the negotiations, Akinci saw a growing challenge to his position. Ersin Tatar, the newly elected head of the opposition National Unity Party (UBP), indicated his party would not support a federal solution and would not be bound by Akinci's decisions. Tatar apparently threw his support behind a "two-state" solution. Some also pointed out that the decision by several of the original pro-federal solution political parties not to publicly defend Akinci had left him isolated. Some suggested that Akinci and Ankara were no longer on the same page. By contrast, observers who saw Ankara attempting to sideline Akinci and move beyond a federal solution saw the infighting as a ploy to buy more time for Turkey to get through local elections in March and perhaps even the May European Parliament elections. In this strategy, the resumption of negotiations would not even be considered until at least June 2019. When the apparent rift between Akinci, Ozersay, and others became increasingly public, threatening Turkish Cypriot unity, Turkish Foreign Minister Cavasoglu traveled to Cyprus in late January 2019, apparently to bring all sides together and to try to end the public squabbling. Cavasoglu reiterated that Ankara wanted a permanent solution, no matter what it was, but that the Greek Cypriots had to determine what outcome they were willing to negotiate to achieve. At the same time, some observers questioned whether special adviser Lute's mission could actually succeed, as it appeared that disagreement on several issues would not likely help achieve agreement on her eventual terms of reference document. For instance, Anastasiades did not accept a definition of political equality for the Turkish Cypriots favored by Akinci. Nor would he reverse his long-held position and accept a target deadline to conclude the talks. Cavasoglu's December 2018 comment that those who dream of an option with zero guarantees and zero troops should let it go, as such a thing will never happen, suggested that the Guterres framework, in which Turkish troops would begin to leave the island after an agreement is reached, could jeopardize the entire terms of reference from the start. These questions resulted Lute's inability to craft a terms of reference document by the end of 2018, and she stated she would have to return to the island for another round of consultations in early 2019. When she returned in early 2019, the rift between Anastasiades and Akinci centered on the issue of Turkish Cypriot political equality. Akinci demanded his proposal be accepted as a condition for resuming the negotiations. The idea was again rejected by Anastasiades. Subsequently, Lute found little basis for continuing her consultations and decided to meet with the guarantor powers. Although the Greek and Turkish foreign ministers agreed to hold their own consultations on security, Lute saw no likely breakthrough between Anastasiades and Akinci. Nevertheless, Lute agreed to return to the island on April 7 for yet another round of consultations with the two leaders. When Lute returned, she apparently found both sides seemingly farther apart. Aside from the long-standing disagreements between the two Cypriot sides, particularly on security and troops, a big sticking point was Akinci's insistence that the Turkish Cypriots have political equality in the new federal government rather than holding a minority status. Akinci repeated his demand that if a solution would result in two equal constituent states, under a federal structure, then the Turkish Cypriots should hold equal power on issues taken up at the federal level that would involve both constituent states. He proposed that on all issues there must be a positive Turkish Cypriot vote. Anastasiades again rejected that approach, claiming it would give the Turkish Cypriots an absolute veto over all policy issues and would subject Cyprus to the demands of Ankara, potentially resulting in gridlock. Anastasiades, however, apparently did express a willingness to discuss Akinci's proposal, but only for some issues. At the same time, Anastasiades resurrected an old proposal that the new government be a cross between a presidential system, in which the president would be a Greek Cypriot, and a parliamentary system in which a prime minister would rotate between the two communities. Akinci rejected this proposal, arguing that it reinforced his view that the Greek Cypriots will always see the Turkish Cypriots as a minority and not a coequal partner. Other Turkish Cypriot officials claimed this was an attempt by Anastasiades to establish a Greek Cypriot state on the island. Lute's fourth return to Cyprus again failed to achieve an agreement between the two Cypriot leaders on a "terms of reference" document that would become the basis for restarting the negotiations and suggested that negotiations were unlikely to resume anytime soon. Secretary-General Guterres will now have to decide how to proceed. Continuing with the Lute mission without a chance of being successful may seem fruitless. Even if Anastasiades and Akinci could compromise on some form of an agreement on the definition of political equality for the Turkish Cypriots, questions still remain on what type of final governmental structure would be addressed, specifically, is the long-sought bizonal, bicommunal, federal solution for the island still attainable? The Guterres framework suggests that a new security framework was needed, particularly one that does not envision Turkey's automatic right to unilaterally intervene on the island. Would Ankara eventually accept that concept? Could Akinci argue successfully to his citizens that the new federal structure, loose or otherwise, with some version of political equality for the Turkish Cypriotst, the guarantees of EU law, and a more robust U.N. peacekeeping force in place, might be enough to argue for a new security arrangement regarding Turkish troops or Turkish security guarantees? Could either side accept a future NATO-led peacekeeping force, in which Turkish and Greek troops could participate as a reassurance to both sides? History might indicate a continued "no" to these questions. At the same time, relations between Turkey and the Greek Cypriots have become so tense over the energy exploration issue that neither side appears capable of backing down from its security demands, leaving little room for optimism that any kind of a solution can be achieved. Many also wonder whether either leader could sell any agreement to his community at this point. Some longtime observers of the negotiations in the international community expressed deep concern for the direction the dispute has taken since Crans Montana. For instance, in late 2017, the Business Monitor Internatio nal, part of the Fitch Group, downgraded its assessment of a new unification deal from slim to extremely remote. Its 2018 forecast likely will not have changed. Former British Foreign Secretary Jack Straw in 2017 restated a previous assessment that "from the Greek Cypriot point of view, conceding political equality with the Turkish Cypriots means giving power away. But absent a real incentive for both sides" to actually reach an agreement, "the reality is that no Greek Cypriot leader will ever be able to get their electorate behind a deal. The status quo for the south is simply too comfortable." At this point, and despite the effort being put forward by U.N. Secretary-General Guterres to restart the negotiations, a final settlement for Cyprus remains elusive.
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Four months into 2019, unification talks intended to end the division of Cyprus after 55 years as a politically separated nation and 45 years as a physically divided country have remained suspended since July 2017. Attempts by the United Nations to find common ground between the two Cypriot communities to resume the negotiations have not been successful. The talks have fallen victim to the realities of five decades of separation and both sides' inability to make the necessary concessions to reach a final settlement. As a result, the long-sought bizonal, bicommunal, federal solution for the island has remained elusive and may no longer be attainable. Cyprus negotiations typically exhibit periodic levels of optimism, quickly tempered by the political reality that difficult times between Greek and Turkish Cypriots always lay ahead. In June 2018, in an attempt to jump-start the talks, U.N. Secretary-General Antonio Guterres appointed Jane Holl Lute as his new adviser for Cyprus. Her mission was to consult with the two Cypriot leaders, Nicos Anastasiades and Mustafa Akinci, and the three guarantor parties (Greece, Turkey, and Great Britain) to determine if sufficient conditions existed to resume U.N.-hosted negotiations and, if so, to prepare a comprehensive "terms of reference" document by the end of 2018. This document was supposed to include a version of a 2017 "framework" proposed by Guterres, previous "convergences" both sides had reportedly reached on many issues, and a proposed road map for how the negotiations would proceed. Lute conducted her first consultations in September 2018 and a second round in October. Although the talks reportedly were "productive," they did not result in an agreement to resume the talks and Lute announced she would have to return to the island in early 2019, reaffirming the difficulty many thought she would encounter in trying to reach agreement on the provisions of the "terms of reference." Lute's initial return in January 2019 was short and inconclusive. Subsequently, Lute returned to meet with Anastasiades and Akinci on April 7. What Lute apparently found was that both sides were seemingly farther apart. Aside from the long-standing disagreement on security guarantees, a big sticking point was Akinci's insistence that the Turkish Cypriots have political equality, demanding that on all issues taken up at any new federal level, a positive Turkish Cypriot vote would be necessary. Anastasiades expressed a willingness to discuss Akinci's proposal for some issues but rejected the demand claiming, it would give the Turkish Cypriots an absolute veto over all policy issues, potentially resulting in gridlock. At the same time, Anastasiades resurrected an old proposal that the new government be a cross between a presidential system, in which the president would be a Greek Cypriot, and a parliamentary system in which a prime minister would rotate between the two communities. Akinci rejected this proposal, claiming it reinforced his view that the Greek Cypriots will always see the Turkish Cypriots as a minority and not a coequal partner. Lute's fourth attempt failed to achieve an agreement between the two Cypriot leaders on how to restart the talks and suggested that negotiations were likely to remain suspended indefinitely. The United States historically has held an "honest broker" approach to achieving a just, equitable, and lasting settlement of the Cyprus issue. However, some observers have seen recent actions within Congress and the Administration in support of Cyprus's unfettered energy development in the Eastern Mediterranean and lifting of restrictions on arms sales to Cyprus as an admission by the United States that an equitable solution has become more difficult. These policy directions also suggest that U.S. interests in the Eastern Mediterranean have moved on to security and energy concerns for which closer relations with the Republic of Cyprus have become a higher priority. This report provides an overview of the negotiations' history and a description of some of the issues involved in those talks.
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This report provides background information and issues for Congress on the Navy's Littoral Combat Ship (LCS) program. A total of 35 LCSs have been procured through FY2019. The Navy wants FY2019 to be the final year of LCS procurement, and it has not requested the procurement of any additional LCSs in its FY2020 budget submission. The Navy wants to shift procurement of small surface combatants in FY2020 from the LCS to a new frigate called the FFG(X). The Navy's proposed FY2020 budget requests funding for the procurement of the first FFG(X). The FFG(X) program is covered in detail in CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke. A current issue for Congress regarding the LCS program is whether to procure any additional LCSs in FY2020, and if so, how many. Another issue for Congress concerns future workloads and employment levels at the two LCS shipyards if one or both of these yards are not involved in building FFG(X)s. Congress's decisions on the LCS program will affect Navy capabilities and funding requirements, and the shipbuilding industrial base. For an overview of the strategic and budgetary context in which the LCS program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke. In discussing its force-level goals and 30-year shipbuilding plans, the Navy organizes its surface combatants into large surface combatants (LSCs), meaning the Navy's cruisers and destroyers, and small surface combatants (SSCs), meaning the Navy's frigates, LCSs, mine warfare ships, and patrol craft. SSCs are smaller, less capable in some respects, and individually less expensive to procure, operate, and support than LSCs. SSCs can operate in conjunction with LSCs and other Navy ships, particularly in higher-threat operating environments, or independently, particularly in lower-threat operating environments. In December 2016, the Navy released a goal to achieve and maintain a Navy of 355 ships, including 52 SSCs, of which 32 are to be LCSs and 20 are to be FFG(X)s. Although patrol craft are SSCs, they do not count toward the 52-ship SSC force-level goal, because patrol craft are not considered battle force ships, which are the kind of ships that count toward the quoted size of the Navy and the Navy's force-level goal. At the end of FY2018, the Navy's force of SSCs totaled 27 battle force ships, including 0 frigates, 16 LCSs, and 11 mine warfare ships. Under the Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan, the SSC force is to grow to 52 ships (34 LCSs and 18 FFG[X]s) in FY2034, reach a peak of 62 ships (30 LCSs, 20 FFG[X]s, and 12 SSCs of a future design) in FY2040, and then decline to 50 ships (20 FFG[X]s and 30 SSCs of a future design) in FY2049. The LCS is a relatively inexpensive Navy surface combatant that is to be equipped with modular "plug-and-fight" mission packages, including unmanned vehicles (UVs). The Navy announced the start of the LCS program on November 1, 2001. The first LCS was procured in FY2005, and a total of 35 have been procured through FY2018, including three in FY2019. As noted above, of the 35 that have been procured through FY2019, 16 had entered service as of the end of FY2018. The LCS was designed to operate in contested littoral waters in conjunction with other Navy forces. The LCS's primary missions are antisubmarine warfare (ASW), mine countermeasures (MCM), and surface warfare (SUW) against small boats (including so-called "swarm boats"), particularly in littoral (i.e., near-shore) waters. The LCS program includes the development and procurement of ASW, MCM, and SUW modular mission packages. Additional potential missions for LCSs include peacetime engagement and partnership-building operations; intelligence, surveillance, and reconnaissance (ISR) operations; maritime security and intercept operations (including anti-piracy operations); support of Marines or special operations forces; and homeland defense operations. An LCS might perform these missions at any time, regardless of its installed mission package, although an installed mission package might enhance an LCS's ability to perform some of these missions. The LCS program has been controversial over the years due to past cost growth, design and construction issues with the first LCSs, concerns over the survivability of LCSs (i.e., their ability to withstand battle damage), concerns over whether LCSs are sufficiently armed and would be able to perform their stated missions effectively, and concerns over the development and testing of the modular mission packages for LCSs. The LCS program has been modified or restructured several times over the years, in part to address these issues. The Navy's execution of the program has been a matter of congressional oversight attention for several years, particularly for a period of about 10 years starting around 2007, when significant cost growth in the program came to light. Table 1 shows past annual procurement quantities for LCSs. The Navy wants FY2019 to be the final year of LCS procurement, and it has not requested the procurement of any additional LCSs in its FY2020 budget submission. The LCS program includes two very different LCS designs (see Figure 1 ). One, called the LCS-1 or Freedom-class design, was developed by an industry team led by Lockheed. The other, called the LCS-2 or Independence-class design, was developed by an industry team that was then led by General Dynamics. The LCS-1 design is based on a steel semi-planing monohull (with an aluminum superstructure), while the LCS-2 design is based on an all-aluminum trimaran hull. The two LCS designs also use different built-in combat systems (i.e., different collections of built-in sensors, computers, software, and tactical displays) that were designed by each industry team. The Navy states that both LCS designs meet the Key Performance Parameters (KPPs) for the LCS program. LCS procurement has been divided more or less evenly between the two designs. The LCS-1 design is built at the Fincantieri/Marinette Marine shipyard at Marinette, WI, with Lockheed as the prime contractor; these ships are designated LCS-1, LCS-3, LCS-5, and so on. The LCS-2 design is built at the Austal USA shipyard at Mobile, AL, with Austal USA as the prime contractor; these ships are designated LCS-2, LCS-4, LCS-6, and so on. Ships 1 through 4 in the program were procured with single-ship contracts. The next 22 ships in the program (ships 5 through 26) were procured under two 10-ship block buy contracts that the Navy awarded to the two LCS builders in December 2010, and which were later extended in each case to include an 11 th ship. The Navy sought and received legislative authority from Congress in 2010 to award these block buy contracts. Current Navy plans call for procuring a total of 44 LCS mission packages (10 ASW, 24 MCM, and 10 SUW). The Navy has not announced whether the figure of 44 mission packages will be adjusted upward to account for the procurement of a total of 35 rather than 32 LCSs. LCS mission packages have been under development since the early days of the LCS program. The Navy's plan is to develop and deploy initial versions of these packages, followed by development and procurement of more capable versions. The development, testing, and certification of LCS mission packages has been a significant and continuing oversight issue for Congress for the LCS program. The Navy states that The Navy achieved Initial Operating Capability (IOC) of the final component of the SUW Mission Package (MP), the Surface to Surface Missile module. The Navy worked with the Director, Operational Test and Evaluation to improve the test design, employ best practices, and make data driven decisions. The team jointly delivered a fully compliant test outcome, while simultaneously reducing the number of developmental test and operational test raid events. As a result, the Department reduced costs while completing operational tests of the SUW MP two months early. The ASW Mission Package Pre-Production Test Article was delivered in November 2018 and ASW MP conducted end-to-end testing at the Navy's Atlantic Undersea Test and Evaluation Center in January 2019. All of the MCM Mission Package aviation systems have reached IOC and are being delivered to the Fleet. The modular nature of the Mission Packages enables the Navy to deliver these capabilities now, while continuing to mature the remainder of the systems. Additionally, the Navy continues to evaluate employment of the MCM Mission Package off of Vessels of Opportunity. The LCS employs automation to achieve a reduced-sized crew. An LCS with an embarked MCM mission package and an aviation detachment to operate the ship's embarked aircraft might total about 88 sailors, compared to more than 200 for a Navy frigate and more than 300 for a Navy cruiser or destroyer. In general, most LCSs are to be operated with alternating dual crews so as to increase the percentage of time they can be deployed. For additional information on the manning and deployment of LCSs, see Appendix A . Industry has marketed various modified versions of the LCS to potential foreign buyers. Saudi Arabia has purchased four modified LCSs. The Navy wants FY2019 to be the final year of LCS procurement, and it has not requested any finding for the procurement of additional LCSs in its FY2020 budget submission. The Navy's proposed FY2020 does request $14 million in procurement funding to cover cost growth on LCSs procured in prior fiscal years. And as shown in Table 2 in the " Legislative Activity for FY2020 " section of this report, the Navy's proposed FY2020 budget requests funding for the procurement of LCS mission packages. The Navy's FY2020 budget submission estimates the combined procurement cost of the three LCSs procured in FY2019 at $1,571.2 million, or an average of about $523.7 million each. One issue for Congress is whether to procure any LCSs in FY2020, and if so, how many. As noted above, the Navy wants FY2019 to be the final year of LCS procurement, and it has not requested the procurement of any additional LCSs in its FY2020 budget submission. Opponents of procuring one or more LCSs in FY2020 could argue that the total number of LCSs procured in prior years exceeds the Navy's stated requirement, and that adding funding to the Navy's FY2020 shipbuilding account for procuring one or more additional LCSs could reduce FY2020 funding for other Navy programs. Supporters of procuring one or more LCSs could argue that it could provide a hedge against delays in the FFG(X) program and help the Navy achieve its small surface combatant force-level goal more quickly. Another issue for Congress concerns future workloads and employment levels at the two LCS shipyards if one or both of these yards are not involved in building FFG(X)s. As noted earlier, the Navy wants to shift procurement of small surface combatants in FY2020 to a new frigate called the FFG(X). The Navy's proposed FY2020 budget requests funding for the procurement of the first FFG(X). Five industry teams are currently competing for the FFG(X) program. Two of these teams are offering designs for the FFG(X) that are modified versions of the two LCS designs that the Navy has procured in prior years. The other three industry teams are offering designs for the FFG(X) that are based on other existing ship designs. One of these three other industry teams is proposing to build its design at the LCS-1 shipyard. The Navy plans to announce the outcome of the FFG(X) competition in the fourth quarter of FY2020. The FFG(X) program is covered in detail in CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke. If a design proposed for construction at one of the LCS shipyards is chosen as the winner of the FFG(X) competition, then other things held equal (e.g., without the addition of new work other than building LCSs), workloads and employment levels at the other LCS shipyard (the one not chosen for the FFG(X) program), as well as supplier firms associated with that other LCS shipyard, would decline over time as the other LCS shipyard's backlog of prior-year-funded LCSs is completed and not replaced with new FFG(X) work. If no design proposed for construction at an LCS shipyard is chosen as the FFG(X)—that is, if the winner of the FFG(X) competition is a design to be built at a shipyard other than the two LCS shipyards—then other things held equal, employment levels at both LCS shipyards and their supplier firms would decline over time as their backlogs of prior-year-funded LCSs are completed and not replaced with FFG(X) work. The Navy's current baseline plan for the FFG(X) program is to build FFG(X)s at a single shipyard. One possible alternative would be to build FFG(X)s at two or three shipyards, including one or both of the LCS shipyards. One possible approach for doing this, for example, would be to select a winner in the FFG(X) competition and begin procuring that design in FY2020, as the Navy currently plans, but also build FFG(X)s at one or both of the LCS yards. Supporters of this option might argue that it could boost FFG(X) production from the currently planned two ships per year to as many as many as four to six ships per year, substantially accelerating the date for attaining the Navy's small surface combatant force-level goal; permit the Navy to use competition (either competition for quantity at the margin, or competition for profit [i.e., Profit Related to Offers, or PRO, bidding]) to help restrain FFG(X) prices and ensure production quality and on-time deliveries; and complicate adversary defense planning by presenting potential adversaries with multiple FFG(X) designs, each with its own specific operating characteristics. Opponents of this plan might argue that it could weaken the FFG(X) competition by offering the winner a smaller prospective number of FFG(X)s and essentially guaranteeing the LCSs yard that they will build some number of FFG(X)s; substantially increase annual FFG(X) procurement funding requirements so as to procure as many as four to six FFG(X)s per year rather than two per year, which in a situation of finite Department of Defense (DOD) funding could require offsetting reductions in other Navy or DOD programs; and reduce production economies of scale in the FFG(X) program by dividing FFG(X) among two or three designs, and increase downstream Navy FFG(X) operation and support (O&S) costs by requiring the Navy to maintain two or three FFG(X) logistics support systems. Another possible alternative to the Navy's plan to end LCS procurement in FY2019 and shift to FFG(X) procurement starting in FY2020 would be would be to select a winner in the FFG(X) competition and begin procuring that design in FY2020, as the Navy currently plans, but shift Navy shipbuilding work at one of the LCS yards (if the other wins the FFG(X) competition) or at both of the LCS yards (if neither wins the FFG(X) competition) to the production of sections of larger Navy ships (such as DDG-51 destroyers or amphibious ships) that undergo final assembly at other shipyards. Under this option, in other words, one or both of the LCS yards would be converted into feeder yards supporting the production of larger Navy ships that undergo final assembly at other shipyards. This option might help maintain workloads and employment levels at one or both of the LCS yards, and might alleviate capacity constraints at other shipyards, permitting certain parts of the Navy's 355-ship force-level objective to be achieved sooner. The concept of feeder yards in naval shipbuilding was examined at length in a 2011 RAND report. Another issue for Congress concerns the Navy's plans for retrofitting LCSs with additional weapons, so as to give them capabilities more like those of the FFG(X). The Navy states that it "is beginning to retrofit an Over the Horizon Weapon System (OTH WS) on all LCS for increased lethality. The award in May 2018 of the Naval Strike Missile contract for OTH WS brings a technologically mature weapons system and extends the offensive capability of the ship." A broad oversight area for Congress for the LCS program for the past several years concerns survivability, lethality, technical risk, and test and evaluation issues relating to LCSs and their mission packages. Over the years, the annual report from DOD's Director, Operational Test and Evaluation (DOT&E) has contained extensive comments, many of them very critical, regarding numerous aspects of LCSs and LCS mission packages. DOT&E's January 2018 report for FY2017 contains such comments. Similarly, over the years, GAO has provided numerous reports and testimony about the LCS program that have raised a variety of issues with the program. GAO also provides a summary assessment of risk in the LCS mission packages in an annual report it publishes that surveys selected DOD weapon acquisition programs. A July 25, 2018, DOD Inspector General (IG) report on LCS MCM mission package systems stated that "the Navy declared IOC [initial operational capability] for the three MCM mission package systems reviewed prior to demonstrating that the systems were effective and suitable for their intended operational uses." Table 2 summarizes congressional action on the Navy's FY2020 procurement funding request for the LCS program. Appendix A. Manning and Deployment of LCSs This appendix provides additional background information on the manning and deployment of LCSs. The Navy originally planned to maintain three crews for each two LCSs, and to keep one of those two LCSs forward deployed—an approach Navy officials referred to as the 3-2-1 plan. Under this plan, LCSs were to be deployed at forward station (such as Singapore) for 16 months at a time, and crews were to rotate on and off deployed ships at 4- to 6-month intervals. The 3-2-1 plan was intended to permit the Navy to maintain 50% of the LCS force in deployed status at any given time—a greater percentage than would be possible under the traditional approach of maintaining one crew for each LCS and deploying LCSs for seven months at a time. The Navy planned to forward-station three LCSs in Singapore and additional LCSs at another Western Pacific location, such as Sasebo, Japan, and at Bahrain. In September 2016, the Navy announced a new plan for crewing and operating the first 28 LCSs. Key elements of the new plan include the following: the first four LCSs (LCSs 1 through 4) will each by operated by a single crew and be dedicated to testing and evaluating LCS mission packages (though they could be deployed as fleet assets if needed on a limited basis); the other 24 LCSs (LCSs 5 through 28) will be divided into six divisions (i.e., groups) of four ships each; three of the divisions (i.e., 12 of the 24 ships), all of them built to the LCS-1 design, will be homeported at Mayport, FL; the other three divisions (i.e., the remaining 12 ships), all of them built to the LCS-2 design, will be homeported at San Diego, CA; among the three divisions on each coast, one division will focus on MCM, one will focus on ASW, and one will focus on SUW; in each of the six divisions, one ship will be a designated training ship, and will focus on training and certifying the crews of the other three ships in the division; the other three ships in each division will each be operated by dual crews (i.e., Blue and Gold crews), like the Navy's ballistic missile submarines; the crews for the 24 ships in the six divisions will be permanently fused with their associated mission package crews—the distinction between core crew and mission package crew will be eliminated; the 24 ships in the six divisions will experience changes in their mission packages (and thus in their mission orientations) infrequently, if at all; and at program maturity (i.e., by about FY2023), 13 of the 24 ships in the six divisions (i.e., more than 50%) are to be forward stationed at any given point for periods of 24 months, with 3 at Singapore, 3 at another Western Pacific location, such as Sasebo, Japan, and 7 at Bahrain. The Navy states that this crewing and operating plan is intended to reduce disruptions to the deployment cycles of the 24 LCSs in the six divisions that under the 3-2-1 plan would have been caused by the need to test and evaluate LCS mission packages; improve training and proficiency of LCS crews; enhance each LCS crew's sense of ownership of (and thus responsibility for taking good care of) the ship on which it operates; and achieve a percentage of LCSs in deployed status, and numbers of forward-stationed LCSs, similar to or greater than what the Navy aimed to achieve under the 3-2-1 plan. The Navy further states that as the fleet continues to accumulate experience in operating and maintaining LCSs, elements of this new plan might be modified. Appendix B. Defense-Acquisition Policy Lessons In reviewing the LCS program, one possible question concerns what defense-acquisition policy lessons, if any, the program may offer to policymakers, particularly in terms of the rapid acquisition strategy that the Navy pursued for the LCS program, which aimed at reducing acquisition cycle time (i.e., the amount of time between starting the program and getting the first ship into service). One possible perspective is that the LCS program demonstrated that reducing acquisition cycle time can be done. Supporters of this perspective might argue that under a traditional Navy ship acquisition approach, the Navy might have spent five or six years developing a design for a new frigate or corvette, and perhaps another five years building the lead ship, for a total acquisition cycle time of perhaps 10 to 11 years. For a program announced in November 2001, this would have resulted in the first ship entering service in between late 2011 and late 2012. In contrast, supporters of this perspective might argue, LCS-1 entered service on November 8, 2008, about seven years after the program was announced, and LCS-2 entered service on January 16, 2010, a little more than eight years after the program announced. Supporters of this perspective might argue that this reduction in acquisition cycle time was accomplished even though the LCS incorporates major innovations compared to previous larger Navy surface combatants in terms of reduced crew size, "plug-and fight" mission package modularity, high-speed propulsion, and (in the case of LCS-2) hull form and hull materials. Another possible perspective is that the LCS program demonstrated the risks or consequences of attempting to reduce acquisition cycle time. Supporters of this perspective might argue that the program's rapid acquisition strategy resulted in design-construction concurrency (i.e., building the lead ships before their designs were fully developed), a practice long known to increase risks in defense acquisition programs. Supporters of this perspective might argue that the cost growth, design issues, and construction-quality issues experienced by the first LCSs were due in substantial part to design-construction concurrency, and that these problems embarrassed the Navy and reduced the Navy's credibility in defending other acquisition programs. They might argue that the challenges the Navy faces today in terms of developing an LCS concept of operations (CONOPS), LCS manning and training policies, and LCS maintenance and logistics plans were increased by the rapid acquisition strategy, because these matters were partly deferred to later years (i.e., to today) while the Navy moved to put LCSs into production. Supporters of this perspective might argue that the costs of the rapid acquisition strategy are not offset by very much in terms of a true reduction in acquisition cycle time, because the first LCS to be equipped with a mission package that had reached IOC (initial operational capability) did not occur until late FY2014—almost 13 years after the LCS program was announced. Supporters of this perspective could argue that the Navy could have avoided many of the program's early problems and current challenges—and could have had a fully equipped first ship enter service in 2011 or 2012—if it had instead pursued a traditional acquisition approach for a new frigate or corvette. They could argue that the LCS program validated, for defense acquisition, the guideline from the world of business management that if an effort aims at obtaining something fast, cheap, and good, it will succeed in getting no more than two of these things, or, more simply, that the LCS program validated the general saying that haste makes waste. A third possible perspective is that the LCS program offers few if any defense-acquisition policy lessons because the LCS differs so much from other Navy ships and the Navy (and DOD generally) consequently is unlikely to attempt a program like the LCS in the future. Supporters of this perspective might argue that the risks of design-construction concurrency have long been known, and that the experience of the LCS program did not provide a new lesson in this regard so much as a reminder of an old one. They might argue that the cost growth and construction delays experienced by LCS-1 were caused not simply by the program's rapid acquisition strategy, but by a variety of factors, including an incorrectly made reduction gear from a supplier firm that forced the shipbuilder to build the lead ship in a significantly revised and suboptimal construction sequence.
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The Navy began procuring a small surface combatant called the Littoral Combat Ship (LCS) in FY2005, and a total of 35 LCSs have been procured through FY2019, including three in FY2019. The total of 35 LCSs is three more than the 32 the Navy says are required under its 355-ship force-level goal. The Navy wants FY2019 to be the final year of LCS procurement, and it has not requested the procurement of any additional LCSs in its FY2020 budget submission. The Navy wants to shift procurement of small surface combatants in FY2020 to a new frigate called the FFG(X). The Navy's proposed FY2020 budget requests funding for the procurement of the first FFG(X). Five industry teams are currently competing for the FFG(X) program. Two of these teams are offering designs for the FFG(X) that are modified versions of the two LCS designs that the Navy has procured in prior years. The other three industry teams are offering designs for the FFG(X) that are based on other existing ship designs. One of these three other industry teams is proposing to build its design at one of the LCS shipyards. The Navy plans to announce the outcome of the FFG(X) competition in the fourth quarter of FY2020. The FFG(X) program is covered in detail in another CRS report. The Navy's 355-ship force-level goal is the result of a Force Structure Analysis (FSA) that the Navy conducted in 2016. The 2016 FSA established a force-level goal for a 355-ship Navy with 52 small surface combatants, including 32 LCSs and 20 frigates. The Navy conducts a new or updated FSA every few years, and is currently conducting a new FSA that is scheduled to be completed by the end of 2019. Navy officials have stated that this new FSA will likely not reduce the required number of small surface combatants, and might increase it. Navy officials have also suggested that the Navy in coming years may shift to a new fleet architecture that will include, among other thing, a larger proportion of small surface combatants. The LCS is a relatively inexpensive surface combatant equipped with modular mission packages. The LCS program includes two very different LCS designs. One, called the LCS-1 or Freedom-class design, was developed by an industry team led by Lockheed. The other, called the LCS-2 or Independence-class design, was developed by an industry team that was then led by General Dynamics. LCS procurement has been divided more or less evenly between the two designs. The LCS-1 design is built at the Marinette Marine shipyard at Marinette, WI, with Lockheed as the prime contractor. The LCS-2 design is built at the Austal USA shipyard at Mobile, AL, with Austal USA as the prime contractor. The LCS program has been controversial over the years due to past cost growth, design and construction issues with the first LCSs, concerns over the survivability of LCSs (i.e., their ability to withstand battle damage), concerns over whether LCSs are sufficiently armed and would be able to perform their stated missions effectively, and concerns over the development and testing of the modular mission packages for LCSs. The Navy's execution of the program has been a matter of congressional oversight attention for several years. A current issue for Congress is whether to procure any LCSs in FY2020, and if so, how many. Opponents could argue that the total number of LCSs procured in prior years exceeds the Navy's stated requirement, and that adding funding to the Navy's FY2020 shipbuilding account for procuring one or more additional LCSs could reduce FY2020 funding for other Navy programs. Supporters could argue that procuring additional LCSs in FY2020 could provide a hedge against delays in the FFG(X) program and help the Navy achieve its small surface combatant force-level goal more quickly. Another issue for Congress concerns future workloads and employment levels at the two LCS shipyards if one or both of these yards are not involved in building FFG(X)s.
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Streamgages measure water level and related streamflow at streams, rivers, lakes, and reservoirs across the country. Streamgages provide foundational information for diverse applications that affect a variety of constituents. Congress has supported a national streamgage program for 130 years. These streamgages operate in every state, the District of Columbia, and the territories of Puerto Rico and Guam; therefore, national streamgage operations garner interest from many Members of Congress. Data fro m streamgages informs real-time decisionmaking and long-term planning on issues such as hazard preparations and response, infrastructure design, water use allocations, ecosystem management, and recreation. Direct users of streamgage data include a variety of agencies from all levels of government, utility companies, consulting firms, scientific institutions, and recreationists. Streamgages are operated across the globe with national programs in North America, Europe, Australia, and Brazil, among others. In the United States, the U.S. Geological Survey (USGS), the Department of the Interior's (DOI's) lead scientific agency, manages the USGS Streamgaging Network ( Figure 1 ). The network encompasses 10,300 streamgages that record water height or streamflow for at least a portion of the year. Approximately 8,200 of these streamgages measure streamflow year-round and are part of the National Streamflow Network. This subnetwork includes 3,640 Federal Priority Streamgages (FPSs), which Congress and the USGS designated as national priorities (see section on " Federal Priority Streamgages "). Some entities, such as state governments, operate their own streamgages separate from the USGS Streamgaging Network. Congressional appropriations and agreements with approximately 1,400 nonfederal partners funded the USGS Streamgaging Network at $189.5 million in FY2018. Some streamgages are funded solely through congressional appropriations for the USGS and other federal agencies, such as the U.S. Army Corps of Engineers (USACE), Bureau of Reclamation (Reclamation), and Department of Defense (DOD). Much of the USGS Streamgaging Network is funded cooperatively. Interested parties sign funding agreements with the USGS to share the cost of streamgages and data collection. The USGS Cooperative Matching Funds Program (CMF) provides up to a 50% match with tribal, regional, state, and local partners (see section on " Cooperative Matching Funds Program "). Other federal agencies, nonfederal governments, and nongovernmental entities may provide reimbursable funding for streamgages in the USGS Streamgaging Network without contributed funds from the USGS. Evolving federal policies and user needs from diverse stakeholders have shaped the size, organization, and function of the USGS streamgage program. This report provides an overview of federal streamgages by describing the function of a streamgage, the data available from streamgage measurements, and the uses of streamgage information. The report also outlines the structure and funding of the USGS Streamgaging Network and discusses potential issues for Congress, such as funding priorities and the future structure of the nation's streamgage network. A streamgage's primary purpose is to collect data on water levels and streamflow (the amount of water flowing through a river or stream over time). Streamgages estimate streamflow based on (1) continuous measurements of stage height (the height of the water surface) and (2) periodic measurements of streamflow, or discharge, in the channel and floodplains. USGS measurements are used to create rating curves, in order to convert continuously measured stage heights into estimates of streamflow. Selected streamgages may provide additional measurements, such as measurements of water quality (see box on "Supergages"). Streamgages house instruments to measure, store, and transmit stream stage height ( Figure 2 ). Stage height is usually transmitted every hour, or more frequently at 5 to 15 minute intervals for emergency or priority streamgages. Most streamgages transmit data by satellite to USGS computers; the data then are provided online to the public. Numerous streamgages also have cameras that capture and transmit photos of streamflow conditions. Periodic streamflow measurements require USGS personnel to measure discharge at various sections across the stream. Streamflow measurements are made every six to eight weeks to capture a range of stage heights and streamflows, especially at high and low stage heights. Repeated measurements allow scientists to capture changes to the channel from vegetation growth, sedimentation, or erosion, which can affect the relationship between stage height and streamflow. The USGS National Water Information System (NWIS) receives and converts all stream height data from USGS streamgages into streamflow estimates. An example of streamgage data from NWIS is shown in Figure 3 for a site capturing peak streamflow during a hurricane event. The free and publicly accessible data are frequently accessed online or by request to users. For example, the agency responded to over 670 million requests for streamflow and water level information in 2018. The NWIS website is the main repository for current and historical streamflow data, in addition to other water information. Tools such as WaterWatch summarize the current conditions of the nation's streams and watersheds through maps, graphs, and tables by comparing real-time streamflow conditions to historic streamflow from streamgages with records of 30 years or more. The USGS Streamgaging Network provides streamflow information to assist during natural and man-made disasters, such as flooding and drought, and to inform economic and statutory water management decisions, such as the allocation of water supplies for irrigation. Individual streamgages in the network also can serve multiple uses. For example, a streamgage intentionally established for the purpose of reservoir management may provide data to inform water quality standards, habitat assessments, and recreational activities. Additionally, the value of a single streamgage is enhanced by the operation of the entire network, particularly for research, modeling, and forecasting. Streamgages were first established in the United States to inform water use and infrastructure planning—applications that benefit from continuous, long-term hydrologic records (see box on "Evolution of Streamgage Uses"). Long and continuous periods of data are used to construct baselines for water conditions and to identify deviations in the amount and timing of streamflow caused by changes in land use, water use, and climate. Some stakeholders contend that the value of streamflow records increases over time, with at least 20 years of continuous coverage needed for many applications. Technological advances allowing access to streamflow information in real time have expanded the uses of streamgages. Real-time forecasting and operational decisionmaking are used in many applications of streamflow data. Web and phone applications also have facilitated increased public use of water information. Streamgage data is used for a wide range of applications, including supporting activities of federal agencies. There are also a variety of streamgages tailored for specific purposes. The following is a noncomprehensive selection of streamgage uses to illustrate the scope of applications. W ater M anagement and Energy D evelopment . USACE, Reclamation, and various state and local water management agencies use streamgages to inform the design and operation of thousands of water management projects across the nation. Timely streamflow information helps water managers make daily operational decisions as they balance water requirements for municipal, industrial, and agricultural uses. Energy production and mineral extraction operations also rely on continuous streamflow measurements to comply with environmental, water quality, or temperature requirements. For example, the Federal Energy Regulatory Commission (FERC) requires hydropower companies to support USGS streamflow and water-level monitoring as part of their FERC licensing process. Infrastructure Design . Transportation agencies use streamflow data to develop regional flow frequency curves for the design of bridges and culverts, stream stability measures, and analysis of bridge scour—the leading cause of bridge failure. Without adequate information, some observers contend that engineers may overdesign structures, resulting in greater costs, or may not make proper allowances for floods, compromising public safety. Interstate and International Water Rights . Federal streamgages are used to collect streamflow information at U.S. borders and between states. Streamgage data informs interstate compacts, Supreme Court decrees, and international treaties (e.g., under the purview of the International Boundary and Water Commission and the International Joint Commission). Water Science Research . Many federal agencies depend on consistent, long-term data from streamgages to conduct water research and modeling (e.g., USACE, National Oceanic and Atmospheric Administration [NOAA], Environmental Protection Agency [EPA], DOI, U.S. Department of Agriculture [USDA], and National Aeronautic and Space Administration [NASA]). To monitor climate trends and ecological patterns, the USGS distinguishes a subset of streamgages that are largely unaffected by development to serve as benchmarks for natural conditions. Flood Mapping . The Federal Emergency Management Agency (FEMA) uses floodplain maps to establish flood risk zones and requires flood insurance through the National Flood Insurance Program (NFIP) for properties with a 1% annual chance of flooding. Long-term streamflow records are used to determine 1% annual chance flood flows and to develop water surface profiles to map areas at risk of flooding. The USGS often works with FEMA to produce new inundation maps after streamgages record new streamflow peaks from weather events such as hurricanes. Emergency F orecasting and Response. Streamgages inform flood forecasting and emergency response to protect lives and property. Real-time data from more than 3,600 streamgages allow NOAA's National Weather Service (NWS) river forecasters to model watershed response, project future streamflows, forecast monthly to seasonal water availability, and issue appropriate flood watches and warnings (see box on "National Water Model"). Flood warnings provide lead time for emergency response agencies, such as FEMA, to take effective action in advance of rising waters. In addition, the USDA National Resource Conservation Service (NRCS) uses streamgages to forecast flows for water supply, drought management and response, hydroelectric production, irrigation, and navigation in western states. Water Q uality . Streamflow data is important for measuring water quality and developing water quality standards for sediments, pathogens, metals, nutrients (e.g., nitrogen and phosphorus), and organic compounds (e.g., pesticides). At select streamgages, the USGS also operates instruments recording water quality data (see box on "Supergages"). Section 303(d) of the Clean Water Act requires states to develop total maximum daily load (TMDL) management plans for water bodies determined to be water quality impaired by one or more pollutants. When determining TMDL levels for specific pollutants, agencies may consider historic streamflow data, along with other factors, in their evaluations. Agencies may use current flow conditions when determining the proper release of wastewater to ensure compliance with TMDL standards and National Discharge Elimination System permitting. Ecosystem Management and Species . Some water users and resource agencies use streamflow data to meet the flow requirements needed to protect endangered or threatened fish and wildlife under the Endangered Species Act (16 U.S.C. §1531 et seq.). Natural resource agencies, such as the U.S. Fish and Wildlife Service (FWS), collect streamflow data to understand how threatened and endangered species respond to flow variations. The USGS operates streamgages to monitor ecosystem restoration progress, such as restoration of the Chesapeake Bay watershed. Recreation . Real-time streamgage data can help individuals and tourism businesses assess stream conditions for recreational outings. USGS data can be used to decide if conditions are suitable for recreational activities such as fishing, boating, and rafting. The USGS also partners with the National Park Service (NPS) to provide water science and data to help manage parks and to enhance interpretive programs. The USGS Streamgaging Network is part of the Groundwater and Streamflow Information Program under the USGS Water Resources mission area. The President's budget request for FY2020 proposes a restructuring of the mission area to create a Water Observing Systems Program that would combine the USGS Streamgaging Network and other water observation programs. The primary operators of streamgages are the regional and state USGS Water Science Centers, which maintain hydrologic data collection and conduct water research in the region. Approximately 8,200 of the 10,300 USGS streamgages measure year-round streamflow (National Streamflow Network; see Figure 4 ), with the rest only measuring stage height or measuring streamflow on a seasonal basis. USGS streamgages are also differentiated based on cooperative funding (CMF) and federal interest (FPSs). Much of the streamgaging program has been cooperative in nature as interested parties sign funding agreements to share the cost of streamgages and data collection. Through CMF, the USGS funds up to a 50% match with tribal, regional, state, and local partners. In 2018, CMF supported 5,345 streamgages (52% of the USGS Streamgaging Network). The first cooperative agreement began in 1895 with the Kansas Board of Irrigation Survey and Experiment (now known as the Division of Water Resources of the Kansas Department of Agriculture). Funds from cooperative entities steadily increased in the early 20 th century. Congress passed legislation in 1928 stipulating that the USGS can share up to 50% of the costs for water resources investigations carried out in cooperation with tribes, states, and municipalities (see Figure 5 ). In 2016, this Federal-State Cooperative Water Program was renamed the Cooperative Matching Funds Program (CMF), which provides cooperative funding for programs across the USGS Water Mission Area. To participate in the CMF, potential partners approach the USGS to discuss the need for a specific streamgage. The USGS determines its feasibility based on available funds and program priorities. If the USGS deems establishing the streamgage is feasible, the USGS and cooperator sign a joint funding agreement (JFA), which is a standard agreement that specifies how much each party will contribute to funding the streamgage and the payment schedule for the cooperator. These agreements span five years or less. During the agreement, the cost-share generally remains the same, but there is flexibility to alter the cost-share on an annual basis for multi-year agreements. Once a streamgage is operating, if a partner can no longer contribute funds, the USGS seeks to work with other partners that use the streamgage to augment funding. The USGS provides a website identifying streamgages that are in danger of being discontinued or converted to a reduced level of service due to lack of funding. The website also identifies streamgages that have been discontinued or are being supported by a new funding source. Approximately 3,700 of the 10,300 USGS streamgages (36%) are funded by nonfederal and federal partners without matching funds from the USGS (i.e., not with CMF). Nonfederal partners sign JFAs, and federal partners share interagency agreements with the USGS (except USACE which uses a military interdepartmental purchase request). These gages are part of the USGS Streamgaging Network and are operated in accordance with the quality control and public access standards created by the USGS, with the agency assuming liability responsibility for the streamgages. Public and private entities may also elect to own and operate streamgages tailored to their specific needs and not affiliated with the USGS. These independent streamgages may differ in various ways compared to streamgages in the USGS Streamgaging Network (e.g., capital and operating costs, operating periods, measurement capabilities, and data standards and platforms). The SECURE Water Act of 2009 (Title IX, Subtitle F of P.L. 111-11 ) directs the USGS to operate a reliable set of federally funded streamgages. The law requires the USGS to fund no fewer than 4,700 sites complete with flood-hardened infrastructure, water quality sensors, and modernized telemetry by FY2019. Originally titled the National Streamflow Information Program (NSIP), the USGS now designates these streamgages as FPSs. Out of the 4,760 FPS locations identified by the USGS, 3,640 sites were operational in 2018. In FY2018, the USGS share of funding was $24.7 million for FPSs. The idea of a federally sustained set of streamgages arose in the late 20 th century when audits revealed the number of streamgages declining after peaking in the 1970s (see decrease in Figure 5 ). In a 1998 report to Congress, the USGS stated that the streamgage program was in decline because of an absolute loss of streamgages, especially those with a long record, and asserted that the loss was due to partners discontinuing funding. Partners also had developed different needs for streamflow information. The USGS proposed the creation of an entirely federally funded NSIP to ensure a stable "backbone" network of streamgages to meet national needs. The USGS used five national needs to determine the number and location of these streamgage sites: 1. Meeting legal and treaty obligations on interstate and international waters. 2. Forecasting flow for NWS and NRCS. 3. Measuring river basin outflows to calculate regional water balances. 4. Monitoring benchmark watersheds for long-term trends in natural flows. 5. Measuring flow for water quality needs. The original design included 4,300 active, previously discontinued, or proposed streamgage locations. The proposed program was to be fully federally funded, conduct intense data collection during floods and droughts, provide regional and national assessments of streamflow characteristics, enhance information delivery, and conduct methods development and research. The SECURE Water Act of 2009 authorized the NSIP to conform to the USGS plan as reviewed by the National Research Council. The law required the program to fund no fewer than 4,700 sites by FY2019. The law also directed the program to determine the relationship between long-term streamflow dynamics and climate change, to incorporate principals of adaptive management to assess program objectives, and to integrate data collection activities of other federal agencies (i.e., NOAA's National Drought Information System) and appropriate state water resource agencies. In FY2018, congressional appropriations and nonfederal partners provided $189.5 million for the USGS Streamgaging Network ( Figure 6 ). The USGS share included $24.7 million for FPSs and $29.8 million for CMF. Other federal agencies provided $40.7 million ( Table 1 ). Nonfederal partners, mostly affiliated with the CMF program, provided $94.3 million. The appropriations bill for the Interior, Environment, and Related Agencies funds the USGS share of the USGS Streamgaging Network. Funding for streamgages is included in the Groundwater and Streamflow Information Program under the USGS Water Resources Mission Area. The line item includes funding for the streamgage network and groundwater monitoring activities, as well as other activities. Congress provided $74.2 million in FY2018 and $82.7 million in FY2019 for the Groundwater and Streamflow Information Program. While maintaining level funding for FPS and CMF streamgages in FY2019, Congress directed increased funding of $8.5 million for the deployment and operation of NextGen water observing equipment. The President's budget request for FY2020 proposes creating a new Water Observing Systems Program combining the Groundwater and Streamflow Information Program and elements of the National Water Quality program focused on observations of surface water and groundwater. The President's FY2020 budget requests $105.1 million for the proposed program, a decrease of $7.5 million compared to $112.5 million of FY2018 funding for a similar structure. The budget request would maintain funding for active FPS locations and provide no funding for the NextGen system. For CMF, the request proposes a decrease of $500,000 for Tribal Water, which would result in a loss of $250,000 for CMF streamgages, and a decrease of $717,000 for Urban Waters Federal Partnership, which would reduce water quality monitoring at select streamgages. Other federal agencies contribute to whole or partial funding of streamgages for agency purposes ( Table 1 ). Since FY2012, funding from other federal agencies has doubled from $19.9 million to $40.7 million in nominal dollars. This increase may be due to meeting inflation and other streamgage cost increases; to new needs for monitoring data with existing cooperators (e.g., USACE in the Savannah and Jacksonville Harbor expansion projects); and to the introduction of additional funding partners (e.g., the EPA) that are supporting new streamgages. Nonfederal partners funded approximately half the costs of the USGS Streamgaging Network from FY2012 to FY2018. Cooperative partners include tribal, regional, state, and local agencies related to natural resources, water management, environmental quality, transportation, and regional and city planning. Irrigation districts, riverkeeper partnerships, and utility agencies and companies also fund the program. Contributions by nongovernmental partners to streamgages are very limited (1% in FY2018) and are not eligible for cost-sharing through the USGS CMF program. From FY2003 to FY2019, USGS funding for FPS streamgages increased from $11.7 million to $24.7 million (in 2018 dollars; Figure 7 ). However, USGS funding has not met the SECURE Water Act of 2009 mandate for an entirely federally funded suite of not fewer than 4,700 streamgage sites. In FY2018, 35% of FPSs were funded solely by the USGS FPS program funds. The USGS must rely on other federal agencies or nonfederal partners to fund the rest of the FPSs: 27% were funded by a combination of USGS CMF and partner funds, 24% were funded by a combination of other federal agencies and nonfederal partners, and 14% were funded solely by other federal agencies (not the USGS). USGS funding for CMF has remained relatively level, ranging from $27.5 million to $30.7 million (in 2018 dollars) over 15 years, aside from a drop in FY2007 ( Figure 7 ). For the entire USGS Streamgaging Network, the nonfederal cost-share contribution has increased from near 50% in the early 1990s to an average of about 63% in FY2018. With CMF appropriations remaining level, and demand for streamgages from stakeholders rising, the USGS cost-share available has declined. Cost-share commitments for long-term streamgages are generally renewed at consistent percentages, but JFAs for newer streamgages may include less contribution from the USGS. Increasingly, the USGS may opt to only provide matching funds for installation and operation in the first year, with the agreement that the partner provides full funding in subsequent years. Congress may consider funding levels and policy priorities for the USGS Streamgaging Network. Congressional appropriations may affect the size of the network and the design of streamgages. Congress may provide direction regarding the policy priorities when considering the mandates of the SECURE Water Act of 2009 and initiating the NextGen system. Congress determines the amount of federal funding for the USGS Streamgaging Network and may direct its allocation to FPS, CMF, and other initiatives. The USGS and numerous stakeholders have raised funding considerations including user needs, priorities of partners, federal coverage, infrastructure repair, disaster response, inflation, and technological advances. Congress may consider whether to maintain, decrease, or expand the network, and whether to invest in streamgage restoration and modernization. The USGS uses appropriated funding to develop and maintain the USGS Streamgaging Network. While some stakeholders advocate for maintaining or expanding the network, others may argue that Congress should consider reducing the network in order to prioritize other activities. Congress may provide funding to maintain existing streamgages. The Administration continues to request funding for the Groundwater and Streamflow Information Program, which funds the USGS Streamgaging Network. The FY2020 budget request states that "one of the highest goals of the USGS is to maintain long-term stability of a 'Federal needs backbone network' for long-term tracking and forecasting/modeling of streamflow conditions." Some stakeholders may advocate to maintain the current network as it provides hydrologic information for diverse applications (see section on " Streamgage Uses "). The FY2020 budget requests FPS funding at FY2019 enacted levels. If inflation increases costs, level funding may not fully maintain the current operations of FPSs. In addition, 71% of the network, including some FPSs, are funded by other federal and nonfederal partners, which makes those streamgages potentially vulnerable for discontinuation. According to the Government Accountability Office, maintaining streamgages through partners can be a challenge due to both the changing priorities and financial limitations of the partners. Congress may consider reducing the network, either for FPSs, cooperative streamgages, or both. The USGS has discontinued some streamgages because of other funding priorities or because cooperators decided to no longer fund them and alternative funding was not available for the operating costs. Closures may affect individual streamgages or a collection of streamgages. The Administration requested reductions for the Groundwater and Streamflow Information Program in FY2018, FY2019, and FY2020 compared to previous congressional appropriations. For FY2018, the Administration requested a decrease of $742,000 for the Groundwater and Streamflow Information Program, which the budget justification said would diminish the USGS's ability to execute its core activities including strengthening the national streamgaging and groundwater monitoring networks. For FY2019, the proposed reduction included a decrease of $160,000 for U.S.-Canada Transboundary Streamgages. The FY2019 and FY2020 requests proposed a decrease for Tribal Water CMF, which would result in a loss of CMF funding for select streamgages. Congress did not make these cuts in FY2018 and FY2019, and is considering appropriations for FY2020. Reducing the USGS Streamgaging Network could alleviate federal spending on streamgages and allow other entities to operate streamgages tailored to their needs. On the other hand, discontinuing currently operational streamgages may result loss of data acquisition, discontinuation of long-term datasets, and decreased coverage in some basins. Some stakeholders have proposed that entities with specific needs build and operate their own streamgages separate from the USGS network. Some states, such as California and Oregon, already operate their own streamgaging networks. This approach may contain some challenges (e.g., the data may be of higher or lower quality, the data be restricted for public use, or the host may use different standards). However, if individual streamgages were operated at the same level of quality as USGS streamgages, the USGS could incorporate such data into the NWIS network. Some also argue that disparate data sets could be available on a shared platform with USGS streamgages; such a platform could include information on methods of collection, quality, and accuracy. Congress may increase funding to expand the network, which could include establishing the remaining locations for FPS, providing more funds for cooperative streamgages, or pursuing new initiatives like the NextGen system. Congress mandated completion of a national network of no less than 4,700 streamgages in the SECURE Water Act of 2009. At the close of FY2018, 3,640 of the 4,760 FPSs designated by the USGS were operational, with 52% of their funding coming from the USGS. The USGS estimates that $125 million in additional funding each year would be needed to complete the network; however, an average of only about $25 million (in 2018 dollars) was appropriated annually for FPSs between FY2014 and FY2019. While some stakeholders have advocated for Congress to provide full appropriations for FPSs to meet the mandate based on network needs, Congress may consider other funding priorities (e.g., the NextGen system). Congress may also consider if other federal agencies and nonfederal cooperative partners could provide more funding for FPSs. These entities may not be interested in financing some of the designated streamgages in the FPS network, particularly those in isolated river basins with little anthropogenic activity. Some stakeholders advocate for more federal funding to expand the cooperative part of the network, which addresses more localized needs. Some may argue against more federal funding for cooperative streamgages as it lacks a direct statutory mandate (unlike FPSs). Others have proposed increasing nontraditional funding sources for streamgages. They suggest that businesses, homeowner associations, non-for-profit organizations, academic institutions, and other nontraditional entities could provide funding for streamgaging; therefore, increasing the amount of nonfederal investment. Contributions by nongovernmental partners to streamgages are currently relatively limited (1% in FY2018) and are not eligible for federal matching funds. Congress could potentially encourage wider participation by nontraditional partners through such means as authorizing cooperative matching opportunities for public-private partnerships. Traditional stakeholders may oppose making matching funds available to entities not currently eligible, which could result in more competition for limited funds. Congress increased the Groundwater and Streamflow Information Program appropriations by $1.5 million in FY2018 and $8.5 million in FY2019. These increases were directed to streamgages for the NextGen system (see section on " NextGen System "). Congress may consider expanding the network through the NextGen system based on results from the pilot project. Increases solely directed to the NextGen system may intensify funding constraints for FPSs and CMF streamgages. Streamgages are vulnerable to hazards if not properly hardened. The SECURE Water Act directed the USGS to ensure all FPSs were flood hardened by FY2019. According to the USGS, structural restoration is usually funded because of emergencies; for example, disaster supplemental appropriations may provide funds for hardening streamgages, or funds are diverted from operational budgets to repair affected streamgages. The 2017 hurricane season resulted in damage to more than 100 streamgages. In response, Congress provided $4.6 million in the Bipartisan Budget Act of 2018 to repair, replace, and restore these streamgages and recover their data, and for hydrologists to reconstruct stream channel measurements. When the USGS does not receive disaster supplemental funding from Congress, the agency is not reimbursed for funding it redirects in order to provide around-the-clock monitoring during the events and equipment repair during and after the events. Some stakeholders have advocated for Congress to provide funds specifically for strengthening and restoring infrastructure, especially to withstand natural disasters. These stakeholders estimate that $238 million is needed to update half of the streamgages in the network to enable them to withstand major flood events and to meet new data transmitting requirements. Under budget constraints, increases in congressional appropriations are often prioritized to maintain or expand the network instead of restoration. Congress might consider investments in new technologies for the USGS Streamgaging Network. While regarded as reliable, many of the current streamgage operations are based on labor-intensive and more expensive techniques. Some stakeholders suggest that investing in modern technological and computational capabilities could provide enhanced streamflow information with reduced costs. Others raise that these approaches may not provide the quality and consistency of data expected of USGS streamgages and may reduce funds available for existing operations. The SECURE Water Act of 2009 directed the USGS to equip all FPSs with modernized telemetry systems by FY2019. According to stakeholders, the current U.S. streamgage telemetry and information infrastructure may be vulnerable to failure, and the existing data collection platforms and computer networks might eventually be inefficient for real-time and detailed data. In September 2018, an error in telemetry equipment resulted in an outage of 11% of the network. The USGS stated that redundancy in telemetry using cellular signals or camera streaming could have alleviated the problem, which affected the network for weeks. The IMAGES Act of 2018 ( H.R. 4905 ) introduced in the 115 th Congress would have directed FEMA to work with USGS to modernize hardware and increase the speed of data transmittal, but the legislation did not specify funding amounts. Some stakeholders have suggested a figure of $112 million as the amount needed to upgrade the enterprise data management systems, information technology infrastructure, and real-time data delivery capabilities. Past increases of appropriations for streamgages have prioritized continued operation and network expansion over technological improvements. To mitigate costs for such upgrades, federal science agencies are considering cloud computing that could also benefit cloud providers if other users develop applications on the cloud network using the data already hosted there. The FY2020 budget request for the USGS outlines enhancement and modernization of NWIS with a centralized platform meeting the Federal Cloud First Computing Strategy. Some argue that Congress should fund alternative data infrastructure to ensure capacity and reliability of increased data while reducing the cost, though others may argue these strategies are not ready for full implementation. The USGS suggests that modern models and computational methods to estimate streamflow in ungaged or sparsely gaged basins may provide an alternative approach to conventional streamgaging. These methods require more observational data, particularly for reference river basins, than that provided by the current streamgage network. In an effort to assess this approach, the USGS initiated a NextGen system pilot project in the Delaware River Basin with $1.5 million in FY2018 ( Figure 8 ), and the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $8.5 million for the NextGen system. Reports accompanying FY2019 Interior appropriations bills by the House and Senate in the 115 th Congress addressed the NextGen system. The Senate committee report encouraged the USGS to have a cost-effective strategy for the NextGen system ( S.Rept. 115-276 ), and the House committee report directed the USGS to provide the committee with a report on the NextGen system, explaining the limitations of the current water monitoring system, the enhancements and modernization needed, and costs to implement the system over a 10-year period and operate and maintain the system ( H.Rept. 115-765 ). The USGS says the funding will allow further the NextGen system implementation in the Delaware River Basin; continued progress in modernizing USGS data infrastructure; and the selection of the next basin. Advances by the NextGen system to estimate streamflow at ungagged locations based on modeling of highly measured reference basins could also result in reduced need for streamgages, lower costs, and expansion of coverage of streamflow data. Others may suggest that modeling streamflow may not provide adequate data as physical measurements, and initiating the NextGen system may result in decreased funding available for traditional operations. Congress may also consider directing the USGS to pursue innovative observation technologies: satellite-based or airborne platforms, ultrasound sensors for river stage-height measurement, radar technology for stream velocity, and autonomous vehicles for Light Detection and Ranging (LIDAR) and other types of remote sensing. The USGS is currently evaluating combining cameras and radars with advanced imagery analysis and installing these combined technologies on drone platforms to collect streamflow in difficult or inaccessible areas. Data coverage could also potentially increase with high-density sensing and sensor networks that use miniaturization, artificial intelligence, and economy of scale. Statistical advances to estimate streamflow at locations without streamgages could also result in reduced need for streamgages. Some suggest that such technologies may eventually satisfy streamflow information needs at lower cost, while others caution that advanced technologies may not provide as robust and reliable data as traditional methods. Congress may consider outlining the future direction for the USGS Streamgaging Network through oversight or legislation. At the close of FY2018, 3,640 of the 4,760 FPS locations designated by the USGS were operational, with 52% of their funding coming from the USGS. As the USGS faces a deadline by the SECURE Water Act of 2009 to operate no less than 4,700 FPSs by FY2019, Congress directed the USGS through appropriations legislation to invest in the NextGen system. Congress may consider pursuing both the FPS mandate and the NextGen system, amending the SECURE Water Act of 2009 to facilitate completion of FPSs, or replacing the FPS mandate with the Next Gen system. Congress may consider pursuing both FPS coverage and the NextGen system. This approach could allow the USGS to meet the SECURE Water Act mandate while fully exploring new methods to obtain streamflow information. Financial constraints may limit this approach and pursuing both initiatives simultaneously may result in duplication of resources and coverage. Congress may consider revising the SECURE Water Act of 2009 to facilitate completion of FPSs (i.e., extending the deadline for FPSs, reassessing the program goals, and changing the number of FPSs). Extending the mandate may provide more time to complete the FPS network. Some suggest that the national interests have evolved and the national goals and FPS locations should be reassessed. For example, monitoring streamflow for ecological purposes was not considered in the original design but has become an increased priority. The SECURE Water Act of 2009 directed the USGS to incorporate principles of adaptive management by conducting period reviews of the FPSs to assess whether the law's objectives were being adequately addressed. An analysis of the network could reveal whether some currently funded FPS sites are no longer in the national interest and funding could be reallocated to complete other sites. Changes in the national goals may also result in the discontinuation of long-term streamgages or the need for new streamgages, and coverage may increase or decrease in various river basins. Congress may consider replacing FPSs with the NextGen system by authorizing the NextGen system as a pilot program or broader program. For example, the Weather Research and Forecasting Innovation Act of 2017 ( P.L. 115-25 ) required NOAA to conduct a pilot program for commercial weather data. The act stipulated program criteria, authorization of appropriations, reporting requirements, and future directs for NOAA based on the success of the pilot program. Congress could provide similar mandates in legislation including which basins are chosen for NextGen system improvements and whether the basins are determined by an external study, the Administration, or Congress. While some acknowledge new streamgaging approaches are forthcoming, others may suggest that modeling streamflow may not provide as adequate data compared to traditional streamgages and altering the network design may result in loss of coverage at specific sites or across basins.
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Streamgages are fixed structures at streams, rivers, lakes, and reservoirs that measure water level and related streamflow—the amount of water flowing through a water body over time. The U.S. Geological Survey (USGS) in the Department of the Interior operates streamgages in every state, the District of Columbia, and the territories of Puerto Rico and Guam. The USGS Streamgaging Network encompasses 10,300 streamgages, which record water levels or streamflow for at least a portion of the year. Approximately 8,200 of these streamgages measure streamflow year round as part of the National Streamflow Network. The USGS also deploys temporary rapid deployment gages to measure water levels during storm events, and select streamgages measure water quality. Streamgages provide foundational information for diverse applications that affect a variety of constituents. The USGS disseminates streamgage data free to the public and responds to over 670 million requests annually. Direct users of streamgage data include a variety of agencies at all levels of government, private companies, scientific institutions, and recreationists. Data from streamgages inform real-time decisionmaking and long-term planning on issues such as water management and energy development, infrastructure design, water compacts, water science research, flood mapping and forecasting, water quality, ecosystem management, and recreational safety. Congress has provided the USGS with authority and appropriations to conduct surveys of streamflow since establishing the first hydrological survey in 1889. Many streamgages are operated cooperatively with nonfederal partners, who approach the USGS and sign joint-funding agreements to share the cost of streamgages and data collection. The USGS Cooperative Matching Funds (CMF) Program provides up to a 50% match with tribal, regional, state, and local partners, as authorized by 43 U.S.C. §50. The average nonfederal cost-share contribution has increased from 50% in the early 1990s to 63% in FY2018. In the early 2000s, the USGS designated federal priority streamgage (FPS) locations based on five identified national needs. The SECURE Water Act of 2009 (Title IX, Subtitle F, of P.L. 111-11) directed the USGS to operate by FY2019 no less than 4,700 federally funded streamgages. In FY2018, 3,640 of the 4,760 FPSs designated by the USGS were operational, with 52% of their funding from the USGS. Congressional appropriations and agreements with 1,400 nonfederal partners funded USGS streamgages at $189.5 million in FY2018. The USGS share included $24.7 million for FPSs and $29.8 million for cooperative streamgages through CMF. A dozen other federal agencies provided $40.7 million. Nonfederal partners, mostly affiliated with CMF, provided $94.3 million. In FY2019, Congress appropriated level funding for FPS and CMF streamgages. Congress directed an additional $8.5 million to pilot a Next Generation Integrated Water Observing System (NextGen), establishing dense networks of streamgages in representative watersheds in order to model streamflow in analogous watersheds. The President's budget request for FY2020 does not include NextGen system funding and would reduce CMF for streamgages by $250,000. The USGS uses appropriated funding to develop and maintain the USGS Streamgaging Network. The USGS and numerous stakeholders have raised funding considerations including user needs, priorities of partners, federal coverage, infrastructure repair, disaster response, inflation, and technological advances. Some stakeholders advocate for maintaining or expanding the network. Others may argue that Congress should consider reducing the network in order to prioritize other activities and that other entities operate streamgages tailored to localized needs. Congress might also consider whether to invest in streamgage restoration and new technologies. Congress may consider outlining the future direction for the USGS Streamgaging Network through oversight or legislation. As the USGS faces a deadline by the SECURE Water Act of 2009 to operate no less than 4,700 FPSs by FY2019, Congress directed the USGS through appropriations legislation to invest in the NextGen system. Congress may consider such policy options as pursuing both the FPS mandate and the NextGen system simultaneously, amending the SECURE Water Act of 2009, and the relative emphasis of the NextGen system.
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The U.S. Department of Agriculture (USDA), under the authority of Congress as enunciated in periodic farm legislation, provides support to the U.S. farm economy through a variety of federal farm programs. Direct support can often involve the transfer of billions of dollars each year. For example, USDA's Commodity Credit Corporation (CCC) outlays on farm support programs have averaged $13.7 billion per year from 1996 through 2017. Program payments vary across commodities and regions as well as by size of farm operations. This variation has generated considerable interest—by both the general public and Congress—in who is eligible to participate in farm programs and, thus, may receive payments. The concern over program eligibility also derives, in part, from instances where farm payments have accrued to individuals who have never engaged in farming. Program eligibility requirements and payment limits are central to how many U.S. farm programs operate and how support dollars are distributed across the nation. In particular, eligibility requirements and payment limits determine who receives federal farm program payments and how much they receive. A number of statutory and regulatory requirements govern federal farm program eligibility for benefits under various programs. A key aspect of eligibility for major farm revenue support programs is the requirement that a person be "actively engaged in farming" (AEF)—that is, that a person contribute either labor or management time (or both) to the farm's operation. Not all farm programs are subject to the same AEF criteria, and the criteria often apply differently based on the type of legal entity owning the farm operation. This is the first of two reports on the subject of program eligibility and payment limits. This report focuses on current requirements to successfully be determined as AEF and thus eligible for certain farm program payments. Another report (CRS Report R44739, U.S. Farm Program Eligibility and Payment Limits ) focuses on farm program payment limits, conservation compliance, and adjusted gross income (AGI) restrictions. This report begins by briefly discussing the historical development of congressional efforts to define and tighten eligibility criteria for farm program payments. This is followed by a description of all of the key terms and concepts involved in defining a farm business and farm program payment recipient, including the three major types of farm business organizations (sole proprietorship, partnership, and corporation). Then the report discusses current requirements used to define a person or entity as being "actively engaged in farming" (AEF) by type of legal entity. This is followed by a description of a 2015 USDA rule—released subsequent to the 2014 farm bill ( P.L. 113-79 )—that clarifies what constitutes AEF for nonfamily members of a farming operation, how more than one nonfamily person may qualify as an active farm manager (subject to a limit of three farm managers), and the recordkeeping requirements necessary to meet this new criteria. Finally, the report discusses several issues that may be of potential interest to Congress concerning regulations governing the implementation and monitoring of AEF criteria. A 2014 discussion of farm program payment limit and eligibility issues by farmdoc daily states: Payment limits are a technical and legal issue. Any decision on the number of entities receiving payments should be made with due diligence, including careful consideration of the business and legal implications, and should be discussed with both the Farm Service Agency (FSA) and a lawyer who is an expert on payment limits. This report is not a legal brief, nor does it represent a CRS legal analysis. Nor does this report intend to discuss the merits, or lack thereof, of federal farm program payments. Given its complexities, a review of U.S. farm program eligibility and annual payment limit policy can facilitate a conceptual understanding of issues of potential interest to Congress. The initial attempt to restrict payments to actual farmers was in 1987, when Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203 , §§1301-1307). According to the Government Accountability Office (GAO), Congress was motivated to pass the Farm Program Payments Integrity Act after hearing several concerns about farm payments going to individuals not involved in farming. This law required that an individual or entity meet AEF criteria to receive farm commodity payments. Since their establishment, AEF criteria have been a requirement for payment eligibility for most farm revenue support programs. Since 1996, an average of about $9 billion per year in farm support program payments have been subject to the AEF criteria. Thus, significant taxpayer resources are at stake. However, designing a transparent and comprehensive definition of what it means to be AEF has proven difficult. In 2004, GAO contended that USDA regulations failed to specify a measurable standard for what constituted "a significant contribution of active personal management." Furthermore, GAO argued that, by not specifying such a measurable standard, USDA allowed individuals with little or no involvement in a farming operation to qualify for payments. As a consequence of such criticism, the definition of AEF has evolved over the years as Congress and USDA—via its regulatory powers—have attempted to tighten payment eligibility criteria. For example, the 2008 farm bill ( P.L. 110-246 ) added more specificity to the definition of person and legal entity . It limited qualifying payments via direct attribution to persons or legal entities with ownership interests in joint ventures that pooled the resources of multiple payment recipients. It also expanded a separate payment limit to the spouses of qualifying farm payment recipients. Yet GAO continued to argue that further specificity was needed for AEF criteria. The 2014 farm bill ( P.L. 113-79 , §1604) required USDA, in new regulations, to add more specificity to the role that a nonfamily producer who is a member of a legal entity—primarily a partnership or joint venture—must have to qualify for farm program benefits. In general, family farms receive special treatment in which every adult family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements. Prior to the 2018 farm bill, family membership was based on lineal ascendants or descendants but was also extended to siblings and spouses. The 2018 farm bill (§1703) further extended the definition of family member to include first cousins, nieces, and nephews. As a result, the current set of laws and rules governing farm program eligibility—particularly for family members of a farm operation—remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. Critics contend that current USDA eligibility criteria—especially for providing active personal management—remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of partnership members to increase the farm business's payment limit and expand its farm payment receipts. Many types of farm business entities own and operate some sort of agricultural production activity. For purposes of determining the extent to which the participants of a farm operation qualify as potential farm program participants, three major categories are considered ( Table 1 ). 1. Sole proprietorship or family farm . The farm business is run by a single operator or multiple adult family members—the linkage being common family lineage—where each qualifying member is subject to an individual payment limit. Thus, a family farm potentially qualifies for an additional payment limit for each family member (18 years or older) associated with the principal operator who participates in the farming operation. Family farm or sole proprietorships comprised nearly 87% of U.S. farm operations in 2012. 2. Joint operation . Each member is treated separately and individually for purposes of determining eligibility and payment limits. Thus, a partnership's potential payment limit is equal to the number of qualifying members (plus any special exemptions such as spouses) times the individual payment limit. 3. Corporation. A legally defined association of joint owners or shareholders that is treated as a single person for purposes of determining eligibility and payment limits. This includes corporations, limited liability companies, and similar entities. Most incorporated farm operations are family held. These three categories represent over 98% of U.S. farm operations ( Table 1 ). Special rules exist for evaluating both the eligibility of and relevant payment limits for institutional and other exceptional types of potential legal entities. However, because of their small number (less than 2% of U.S. farm operations) and unique nature, they are not discussed further in this report. Generally, program eligibility begins with identification of participants. Identifying who or what is participating and therefore how payments may be attributed is the cornerstone to most farm program eligibility. To be eligible to receive any farm program payment, every person or legal entity—including both U.S. and non-U.S. citizens—must provide a name and address, and have either a social security number (SSN) in the case of a person, or a Taxpayer Identification Number (TIN) or Employee Identification Number (EIN) in the case of a legal entity with multiple persons having ownership interests. In this latter situation, each person with an interest must have a TIN or EIN and must declare an interest share in the joint entity using the requisite USDA forms. All participants in programs subject to payment eligibility and payment limitation requirements must submit to USDA two completed forms. The first, CCC-901 (Members' Information), identifies the participating persons and/or entities (through four levels of attribution if needed) and their interest share in the operation. The second form, CCC-902 (Farm Operating Plan), identifies the nature of each person's or entity's stake—that is, capital, land, equipment, active personal labor, or active personal management—in the operation. These forms need be submitted only once (not annually) but must be kept current in regard to any change in the farming operation. Critical changes to a farming operation might include adding a new family member, changing the land rental status from cash basis to share basis, purchasing additional base acres equivalent to at least 20% of the previous base, or substantially altering the interest share of capital or equipment contributed to the farm operation. This information is critical in determining the extent to which each person is actively engaged in the farming operation as described below. AEF criteria are a required component of eligibility for payments under the principal revenue support programs of the 2018 farm bill, including the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs and benefits under the Marketing Assistance Loan (MAL) program. In addition, two direct payment programs established by the Secretary of Agriculture under the authority of the Commodity Credit Corporation Charter Act require that payment recipients meet all AEF criteria—the Cotton Ginning Cost-Share program and the Market Facilitation Program. Finally, benefits under the Trade Adjustment Assistance for Farmers also require that participants meet AEF requirements. To be eligible for payments under any of these programs, participants—individuals as well as other types of legal entities—must meet specific requirements concerning their "active participation" in the farming operation. In contrast, AEF criteria are not applicable for other farm programs including crop insurance and conservation programs ( Table 4 ). The AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. This section briefly reviews the specific requirements for each type of legal entity to qualify as AEF. To understand what it means to be AEF, consider first the case of a single producer. The 2014 farm bill (§1111) defined a producer as an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop and is entitled to a share of the crop that is produced on the farm. The 2018 farm bill retained this definition of a producer. A person, as an individual producer, must meet the following three AEF criteria: P1. The person, independently and separately from other individuals with an interest in the farm business, makes a significant contribution to the operation of: a. capital, equipment, or land; and b. active personal labor, active personal management, or a combination of personal labor and active personal management; P2. The person's share of profits or losses is commensurate with his/her contribution to the farming operation; and P3. The person shares in the risk of loss from the farming operation. However, with respect to the latter two criteria (P2 and P3), USDA has generally interpreted them as having been met if a person or entity participating in a farm program receives income based on the farm's operating results and, thus shares in the profits and losses from the crop. The criteria for meeting ownership or rental control of farm assets (P1.a.) are straightforward. The active personal labor and/or management requirement (P1.b.) are described in more detail below. "Active personal labor" means personally providing physical activities necessary in a farming operation, including activities involved in land preparation, planting, cultivating, harvesting, and marketing of agricultural commodities in the farming operation. Other physical activities include those required to establish and maintain conserving cover crops on Conservation Reserve Program acreages and those physical activities necessary in livestock operations. The personal labor contribution by an individual must be at least the smaller of 1,000 hours annually or 50% of the total hours needed to conduct a farming operation comparable in size to the individual's ownership interest in the operation. The requirement for active personal management is less specific. For an individual it means personally providing and participating in management activities "critical to the profitability of the farming operation." Such management activities may be performed under one or more of the following categories: Capital (which includes arranging financing and managing capital), acquiring equipment, acquiring land and negotiating leases, managing insurance, and managing participation in USDA programs; Labor (which includes hiring and managing of hired labor); and Agronomics and marketing (which includes selecting crops and making planting decisions), acquiring and purchasing crop inputs, managing crops and making harvest decisions, and pricing and marketing of crop production. The GAO, in a 2013 report to Congress, pointed out that this broad definition of active personal management made it very difficult for USDA to determine whether individual contributions are significant. Furthermore, GAO suggested that, under this broad definition, management responsibilities could be distributed among farm operation members so as to increase the number of individuals who can claim eligibility for payments based on management contributions. In terms of evaluating an individual's eligibility for program payments, the "active" personal labor requirement clearly implies that a person must be routinely "on site" to undertake physical activities in support of the farming operation. The "active" personal management requirement is less clear on physical location and potentially allows a person to make significant contributions of active personal management without physically visiting the farming operation. Current law allows for special treatment of a spouse. If one spouse is determined to be actively engaged in farming, then the other spouse shall also be determined to have met the requirement. Thus, a married farmer and spouse qualify for a doubling of the individual payment limit. Family membership in a farm business is defined by being a sibling, spouse, lineal ancestor (e.g., great-grandparent, grandparent, or parent), lineal descendant (e.g., son, daughter, grandchild, or great-grandchild), niece, nephew, or cousin of the principal operator. Every adult family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements. An exception is also made for landowners who may forgo the AEF labor and management requirement and still be deemed in compliance with all AEF requirements if the landowner receives income based on the farm's operating results and, thus, shares in the risk of profits (P2) and losses (P3) from the crop. Any person or legal entity that does not satisfy the AEF requirements will not be eligible for farm program benefits under relevant programs. For example, a landowner who rents farmland to another farming operation for a fixed rental rate (i.e., under a fixed cash-rental arrangement) would bear no risk nor be subject to any potential loss from the farming operation. In other words, the landowner would fail to meet AEF criteria P2 and P3 described earlier. In such cases, the landowner would not be eligible for the relevant farm program benefits. Similarly, a landlord who rents land to a farming operation for a share of the crop that is guaranteed in volume or value independent of the actual harvest results would also not bear any risk and, thus, not be eligible for farm program benefits. In the case of a joint operation, the amount of farm payments that can be earned in a year depends on the number of qualifying members and their ownership share. Each partner or member must separately meet all of the AEF criteria required for a person. In particular, each partner or member with an ownership interest must contribute active personal labor and/or active personal management to the farming operation (but subject to certain exemptions, such as the spousal and landlord exceptions listed above). The contribution must be identifiable and documentable, separate and distinct from the contributions made by any other partner or member, and critical to the profitability of the farming operation. Since a partnership's potential payment limit is equal to the number of qualifying members (plus qualifying exemptions) times the individual payment limit, the partnership's total limit could be expanded by the addition of each new qualifying member. Similarly, the partnership's total limit could be reduced by one individual payment limit for each member that fails to meet the AEF requirements and any other eligibility criteria. There is an exception to the AEF criteria for certain partnerships. When a partnership owns all of the land it uses for farming (i.e., no land is rented), then its members are automatically deemed to be actively engaged in farming, provided that the partners receive income based on the farm's operating results and, thus, share in the risk of profits and losses from the crop. In the case of a nonfamily member of a joint venture seeking to satisfy AEF criteria, his or her individual labor and management contributions must be recorded in a special log to verify that a "significant contribution" has been achieved. This is described later in this report in the section entitled " Recordkeeping Requirement of Personal Hours Worked ." In the case of a corporation or similar entity with multiple owners (or shareholders), the entity is essentially treated as a single individual. It is considered as "actively engaged in farming" with respect to a farming operation if: C1.The corporation makes a significant contribution of capital, equipment, or land (or a combination thereof); C2.Each member with an ownership interest in the corporate entity makes a significant contribution of personal labor or active personal management—whether compensated or not—to the operation that are: a. performed on a regular basis; b. identifiable and documentable; and c. separate and distinct from such contributions of other members; C3.The collective contribution of corporate members is significant and commensurate with contributions to the farming operation; and C4.The corporation also meets the AEF criteria cited above for a person of (P2) sharing commensurate profits or losses, and (P3) bearing commensurate risk. If any member of the corporation fails to meet the labor and management requirements of C2 above, then any program payment or benefit to the corporation will be reduced by an amount commensurate with the ownership share held by that member. An exception to this requirement applies if (a) at least 50% of the entity's stock is held by members that are "actively engaged in providing labor or management," and (b) the total annual farm program payments received collectively by the stockholders or members of the entity is less than one payment limitation. There is an additional exception to the AEF criteria for certain corporate entities. When a corporation owns all of the land it uses for farming (i.e., no land is rented), then the corporation is automatically deemed to meet the AEF criteria provided the corporation receives income based on the farm's operating results and, thus, shares in the risk of profits and losses from the crop. When considering institutional recipients of farm payments subject to AEF criteria (i.e., ignoring family and individual payment recipients and recipients of farm payments not subject to AEF criteria), USDA data for 2015 suggests that there were 95,417 qualifying institutional arrangements ( Table 2 ). A nonfamily member of a farming operation is, by default, anyone who fails to meet the criteria of family membership. The 2014 farm bill (§1604) required USDA to add more specificity to the role that a nonfamily producer who is a member of a legal entity—primarily a partnership or joint venture—must play to qualify for farm program benefits. In the rule, USDA was directed to explicitly 1. Define what constitutes a " significant contribution of active personal management " for the purpose of payment eligibility. 2. Consider limits on the number of persons per farming operation who may be considered actively engaged in farming based on a significant contribution of active personal management . Such consideration should take into account: the size, nature, and management requirements of a farming operation; the changing nature of active personal management due to advancements of farming operations; and the degree to which these new regulations will adversely impact the long-term viability of the farming operation. 3. Exclude operations comprised solely of family members from these provisions. 4. Include a plan for monitoring the status of compliance reviews. The resulting USDA rule, published on December 16, 2015, specifies how legal entities comprised, either entirely or in part, of nonfamily members may be determined eligible for payments, based on a contribution of active personal management. The provisions of this rule do not apply to persons or entities comprised entirely of family members. It is noteworthy that, based on 2012 evidence in Table 1 , nonfamily farm operations comprise a relatively small share (less than 9%) of total farm operations. USDA estimated that the rule's limit on the number of farm managers could affect around 1,400 general partnerships and joint ventures, reducing USDA outlays (and benefits to producers) by about $50 million total for crop years 2016 through 2018, with an annual impact of $4 million to $38 million. As a result of the rule, several additional requirements now apply to nonfamily farming operations seeking to qualify more than one farm manager. Specifically, in addition to the existing AEF requirements, a limit is placed on the number of nonfamily members of a farming operation that can be qualified as a farm manager. Also, an additional recordkeeping requirement now applies for each member of such farming operations contributing any active personal management. This rule restricts the number of nonfamily farm managers per farming operation to o ne f arm m anager , with the following exceptions: Two f arm m anagers permissible . If one person of the farming operation meets the AEF requirements by making a contribution of active personal management, and that farming operation seeks to qualify a second farm manager, the farming operation must also meet the requirement that it is either a large operation or a complex operation. T hree f arm m anagers permissible . To qualify a total of three farm managers, the operation is required to meet the requirements for both size and complexity. No m ore t han t hree f arm m anagers . Under no circumstances is a nonfamily farming operation allowed to qualify more than three persons as farm managers. If a farming operation (comprised, in part, of nonfamily members) seeks to qualify one or more nonfamily farm managers as actively engaged in farming, then all persons that provide any management to the farming operation are required to maintain contemporaneous records or activity logs of their management activities, including the management activities that may not qualify as active personal management under this rule. Specifically, activity logs must include information about the location of where the management activity was performed (either on-site or remote) and the time expended or duration of the management and/or labor (see below) performed for the farming operation. In addition, a person's contributions must be identifiable and documentable, separate and distinct from the contributions of other members of the farm operation, and critical to the profitability of the farming operation. The new definition for a significant contribution of active personal management (for nonfamily members only) requires an annual contribution of 500 hours of management or at least 25% of the total management required for that operation. Eligible management activities must be performed under one or more of the management categories listed earlier in the report section entitled " Active Personal Management ." The final rule also takes into consideration all of the actions of the farming operation associated with the financing. Passive management activities such as attendance at board meetings or on conference calls, or watching commodity markets or input markets (without making trades), are not considered as making a significant contribution of active personal management. The final rule, in response to public comment on the difficulty in discriminating between management and labor for farming operations, expanded the measurable standard of what constitutes a significant contribution to include a potential combination of both active personal labor and active personal management. A minimum hourly requirement for a significant contribution of active personal labor of 1,000 hours was established and joined with the hourly standard of 500 hours adopted for defining a significant contribution of active personal management. USDA published a table showing the qualifying minimum combinations of hours contributed to management and labor activities. The table includes five minimum thresholds of combined hours, ranging from 550 hours with predominantly management-identified hours to 950 hours with predominantly labor-identified hours. Since 1987, when Congress first introduced the term "actively engaged in farming" and required that an individual or entity meet AEF criteria to receive farm program payments, U.S. legislators have continued their efforts to limit payments to those who are actual farmers. However, long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA's new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations. These concerns include the lack of specificity in eligibility criteria that continues to allow for as many as three nonfamily farm managers (each, plus their spouses, qualifying for a full payment limit) and no limit on the number of potential farm managers from family-held farm operations. This is noteworthy because family-operated farm businesses represent over 91% of all farm operations. As an example of the lack of specificity, critics point out that the 2014 farm bill provision (§1604) permits exceptions under the rationale of "concern for the long-term viability" of the farming operation. Furthermore, critics contend that, under the current monitoring system, it can be difficult for USDA to verify the management claims of farm operation partners. Several of these concerns are briefly described here. GAO has undertaken several studies of program eligibility and of USDA efforts to monitor and enforce program payment limits. GAO has cited three principal hindrances to USDA oversight and enforcement of AEF regulations for members—both family and nonfamily alike—of a farming operation that claim AEF compliance by providing active personal management: (1) the definition of active personal management is broad and can be interpreted to include many potential activities, (2) requirements of what constitutes significant contributions of management are subjective, and (3) it is difficult to verify individuals' evidence of claimed contributions of active personal management and personal labor—often depending on interviews with individual payment recipients. GAO has said that the three concerns cited above prevent USDA from rigorously enforcing payment eligibility criteria. As a result, large farm operations can distribute various management activities among a partnership's members so as to increase the number of individuals who can claim eligibility for payments based on different types of management contributions. Furthermore, broad regulations allow members to claim that they are making a significant management contribution without physically visiting the farming operation. Thus, the federal government risks distributing payments to individuals who may have little actual involvement in farming operations. In a 2010 regulation, USDA recognized that it has the regulatory authority to tighten eligibility criteria but that it is unlikely to use that authority unless explicitly directed to do so by Congress: The definition of what constitutes a significant contribution is provided by regulation, not by statute and could be changed. We recognize the difficulty in determining the significance of a management contribution under the current definition and the desirability of a measurable, quantifiable standard. However, unlike labor, the significance of a management contribution is not appropriately measured by the amount of time a person spends doing the claimed contribution. The current regulatory definition of a significant contribution of active personal management has been in effect for over 20 years; Congress has not mandated a more restrictive definition during that time, including in the 2008 Farm Bill. As a result, GAO stated that "it appears unlikely that FSA will change its regulatory definition of active personal management in view of its 2010 statements in the Federal Register ." USDA data from 2015 ( Table 3 ) demonstrated that partnerships and joint ventures with larger numbers of members relied more heavily on active personal management criteria to meet AEF qualifications. Congress—in the 2014 farm bill (§1604)—explicitly directed USDA to design new regulations for AEF criteria but only for nonfamily members of farming operations. Furthermore, Congress directed that the new AEF criteria avoid any new regulatory obligations that would add to any paperwork or management burden of family farm operations. USDA released the rule in 2015. Under the 2014 farm bill and 2015 USDA rule, a farm operation—operated primarily by nonfamily members—that meets both the size and complexity criteria discussed above could qualify three farm managers (and potentially their spouses) in addition to those persons qualifying under the personal labor criteria. Thus, a large nonfamily farming operation could have a payment limit that is over $1 million per year. Family-managed farm operations have no limit on the number of potential qualifying members and, thus, on the overall payment limit. Members of Congress may be interested in reviewing the number of farm managers allowed, possibly by establishing an explicit limit on the number a farming operation could claim. For example, everyone on a farm operation who qualifies as a working farmer (i.e., provides land, capital, or equipment and meets the personal labor requirement) could remain eligible to participate in farm programs and receive program payments. However, a restriction could be developed whereby only a single farm manager would be eligible to qualify without providing any farm labor. The spouses of the qualifying persons—both workers and manager—could continue to qualify for payments. The 2014 farm bill (§1604(b)(3)) instructed USDA to consider the extent to which new regulations would "adversely impact" the long-term viability of the farming operation. The basis for determining whether a "significant contribution" of managerial activity has occurred is a subjective assessment. Some wonder whether it might negate any farm manager limit—even on nonfamily farm operations—since one could argue that all farm managers are critical for a farm's long-term viability. The farm manager restrictions related to the 2015 USDA regulation are relevant only for nonfamily members of a farming operation. The 2014 farm bill (§1604(c)) explicitly directs USDA to not apply any new restrictions to farm operations comprised solely of family members. An adult family member is considered actively engaged in farming if he or she receives income based on the farm's operating results. It is assumed that such a family member meets any input or labor requirements, and no recordkeeping is required to verify that sufficient labor hours have been worked on the farm operation or that sufficient managerial time has been made. Various Members of Congress will likely be interested in monitoring the success of USDA's efforts to impose new payment disciplines on nonfamily participants while preventing new management burdens on family farms. Furthermore, they will likely be interested in the extent, if any, to which large farm operations are able to avoid eligibility and payment requirements.
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In 1987, Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203, §§1301-1307), which requires that an individual or legal entity be "actively engaged in farming" (AEF) to be eligible for federal commodity revenue support programs. AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. Designing a transparent and comprehensive AEF definition has proven difficult and has evolved over the years. The current set of laws and rules governing farm program eligibility—for both family and nonfamily members on farm operations—remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. In particular, critics contend that current U.S. Department of Agriculture (USDA) eligibility criteria—especially for providing active personal management—remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of new farm operation members simply to expand an operation's farm payment receipts. Three major categories of legal entities are subject to AEF requirement for program payment eligibility: an individual, a partnership, and a corporation. An individual must meet three specific AEF criteria. First, independently and separately from other individuals with an interest in the farm business, the person makes a significant contribution to the operation of: (a) capital, equipment, or land; and (b) active personal labor and/or active personal management. Second, the person's share of profits or losses is commensurate with his/her contribution to the farming operation. Third, the person shares in the risk of loss from the farming operation. An individual that meets the AEF criteria is eligible for farm program payments but subject to annual payment limits. If a married person meets the AEF requirements, any spouse will also be considered to have met the AEF requirements, thus effectively doubling the individual payment limit. Also, every family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements and is eligible for a separate payment limit. Another exception to AEF requirements is made for landowners provided they receive income based on the farm's operating results. A general partnership is an association of multiple persons whereby each member is treated separately and individually for purposes of determining eligibility and payment limits. A partnership's potential payment limit is equal to the limit for a single person times the number of persons or legal entities that comprise the operation's ownership and meet the AEF requirements. Thus, adding a new member can potentially provide an additional payment limit. A corporation is an association of joint owners that is treated as a single person for purposes of determining eligibility and payment limits, provided that the entity meets the AEF and other eligibility criteria. Adding a new member generally does not affect a corporation's payment limit but only increases the number of members that can share a single payment limit. In accordance with a provision in the 2014 farm bill (P.L. 113-79; §1604), USDA added more specificity to the role that a nonfamily member of a partnership or joint venture must play to qualify for farm program benefits. However, considerable issues remain that may be of interest to Congress. Long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA's new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations.
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Central governance in Yemen, embodied by the decades-long rule of former President Ali Abdullah Saleh, began to unravel in 2011, when political unrest broke out throughout the Arab world. Popular youth protests in Yemen were gradually supplanted by political elites jockeying to replace then-President Saleh. Ultimately, infighting among various centers of Yemeni political power broke out in the capital, and government authority throughout the country eroded. Soon, militias associated with Al Qaeda in the Arabian Peninsula (AQAP) seized territory in one southern province. Concerned that the political unrest and resulting security vacuum were strengthening terrorist elements, the United States, Saudi Arabia, and other members of the international community attempted to broker a political compromise. A transition plan was brokered, and in 2012 former Vice President Abdu Rabbu Mansour Hadi became president. With the support of the United States, Saudi Arabia, and the United Nations Security Council, President Hadi attempted to reform Yemen's political system. Throughout 2013, key players convened a National Dialogue Conference aimed at reaching broad national consensus on a new political order. However, in January 2014 it ended without agreement. One antigovernment group in particular, the northern Yemeni Houthi movement, sought to use military force to reshape the political order. Within weeks of the National Dialogue Conference concluding, it launched a military offensive against various tribal allies of President Hadi. The Houthi were joined by the forces still loyal to former President Saleh, creating an alliance of convenience that was a formidable opponent to President Hadi and his allies. In 2014, Houthi militants took over the capital of Sanaa (also spelled Sana'a) and violated several power-sharing arrangements. In 2015, Houthi forces advanced southward from the capital all the way to Aden on the Arabian Sea. In March 2015, after President Hadi, who had fled to Saudi Arabia, appealed for international intervention, Saudi Arabia and a hastily assembled international coalition launched a military offensive aimed at restoring Hadi's rule and evicting Houthi fighters from the capital and other major cities. In April 2015, the United Nations Security Council passed Resolution (UNSCR) 2216 demanding that Houthi-Saleh forces end their use of violence and that all Yemeni parties avoid "further unilateral actions that could undermine the political transition in Yemen." The United States agreed to provide limited assistance to the coalition military operations, assistance which has evolved over time in response to conditions in the conflict and in light of congressional scrutiny. In early December 2017, the Houthi-Saleh alliance unraveled, culminating in the killing of former President Saleh on December 4, 2017. Since Saleh's death, the coalition has made military gains, advancing northward along the Red Sea coast toward the port of Hudaydah (also spelled Hodeidah, Hudayda). Nevertheless, Houthi forces remain ensconced in northern Yemen and remain in control of the capital. The war has exacerbated a humanitarian crisis in Yemen that began in 2011; as of January 2019, over half of the population required emergency food assistance. Access restrictions to certain areas of Yemen make it problematic for governments and aid agencies to count the war's casualties. One U.S. and European-funded organization, the Armed Conflict Location & Event Data Project (ACLED), estimates that 60,000 Yemenis have been killed since January 2016. UNHCR estimates that 3.9 million Yemenis were displaced internally as of January 2019. In January 2019, the United Nations Panel of Experts on Yemen released their annual report covering 2018. This report noted that Yemen continues to "slide towards humanitarian and economic catastrophe." Though the actual ground war remains confined to "relatively small areas," the effect of the conflict on the economy, as well as the growing presence of armed groups and deep-rooted corruption, has impacted ordinary Yemenis within both Houthi-held areas and liberated areas. On December 6, 2018, the warring parties to the conflict in Yemen convened in Sweden under the auspices of the United Nations to discuss various de-escalation proposals and a possible road map to a comprehensive peace settlement. The talks were the first formal negotiations since 2016. After a week of negotiations, all sides agreed to the Stockholm Agreement, which consists of three components: a cease-fire around the port city of Hudaydah, a prisoner swap, and a statement of understanding that all sides would form a committee to discuss the war-torn city Taiz. Though fighting continues along several fronts, on December 13, 2018, Special Envoy of the United Nations Secretary-General for Yemen Martin Griffiths brokered a cease-fire centered on the besieged Red Sea port city of Hudaydah, Yemen's largest port. As part of the deal, the coalition and the Houthis agreed to redeploy their forces outside Hudaydah city and port. The United Nations agreed to chair a Redeployment Coordination Committee (RCC) to monitor the cease-fire and redeployment. On January 16, the United Nations Security Council (UNSCR) passed UNSCR 2452, which authorized (for a 6-month period) the creation of the United Nations Mission to support the Hudaydah Agreement (UNMHA), of which the RCC was a significant component. For nearly two months, implementation of the Stockholm Agreement stalled. According to U.N. Special Envoy Griffiths, "The initial timelines were rather ambitious….We are dealing with a complex situation on the ground." The Stockholm Agreement did not specify which local actors were to assume responsibility for security in Hudaydah after both parties redeployed. On February 17, the United Nations announced that "The parties reached an agreement on Phase 1 of the mutual redeployment of forces" whereby the Houthis would withdraw from Hudaydah port and the Saudi-led coalition would move out of the eastern outskirts of Hudaydah city. Still, the warring parties have yet to agree on the identities of local police forces to take over security in Hudaydah. As of March 2019, the parties had made "significant progress towards an agreement to implement phase one of the redeployments of the Hudayda agreement." Until a final redeployment is reached, the Houthis remain ensconced in Hudaydah, with barricades, trenches and roadblocks still present throughout the city. The Houthis want local coast guard units to assume control. The coalition claims, however, that the leaders of the local coast guards are loyal to the Houthis, and U.N. observers may have difficulty in verifying the neutrality of security personnel in Hudaydah. U.N. officials have reported to the Security Council that the Houthis fear that a withdrawal from Hudaydah will make their forces vulnerable to attack by the coalition. Meanwhile, in Jordan, several meetings between the Houthis and the Hadi government have taken place over a planned prisoner exchange as called for in the Stockholm Agreement. Although some exchanges of wounded personnel and prisoners have taken place, the talks have not produced a comprehensive agreement to date. Overall, many observers remain skeptical that the cease-fire reflects a broader impulse to end the war, seeing it instead as a means of easing international pressure on the coalition. Since the signing of the Stockholm Agreement, the Saudi-led coalition has conducted airstrikes in Sanaa in retaliation for a Houthi drone attack against a Yemeni military parade. In late January, artillery fire struck a camp for internally displaced people in Yemen's northwestern Hajjah province, killing eight civilians and wounding 30 others. According to reporting by the United Nations, implementation of the Stockholm Agreement has been hindered by an overall lack of trust and a reluctance to make operational concessions outside of a comprehensive political agreement. In 2019, the Trump Administration has continued to support United Nations-led efforts in addressing the humanitarian situation and working toward a comprehensive peace in Yemen. At the same time, the United States has continued to cooperate with Saudi Arabia and the UAE in countering terrorism and attempting to limit Iran's influence in Yemen. For the Trump Administration, U.S. officials have supported the continued defense of Saudi Arabia against Houthi missile and rocket strikes, while also openly calling on coalition members to use air power judiciously to minimize civilian casualties. After ending U.S. refueling support at the coalition's request in November 2018, the Administration has argued against congressional attempts to block arms sales or to end or condition U.S. assistance, arguing that continued U.S. assistance is more likely to achieve the objectives of limiting civilian casualties and maintaining strategic ties to Gulf partners than a punitive approach. To address congressional concerns over errant coalition airstrikes against Yemeni civilians, on November 11, 2018, the United States halted in-flight refueling support for coalition aircraft at the request of the coalition. A month later, then-U.S. Ambassador-designate to Yemen Christopher Henzel noted in his Senate confirmation hearing that "At our urging, the Saudi-led coalition has incorporated the no-strike list into its target development procedures, stopped the use of cluster munitions, changed its rules of engagement to incorporate U.S. recommendations, and established the Joint Incident Assessment team. The United States will continue to press the coalition and the Republic of Yemen government to minimize civilian casualties and expand urgent humanitarian efforts throughout the country." In early February 2019, CENTCOM Commander General Joseph Votel testified before the Senate Armed Services Committee regarding the U.S. role in assisting Saudi Arabia. General Votel remarked that: The United States will continue to support our regional partners developing processes and procedures to counter ballistic missiles (CBM) and counter unmanned armed aerial systems (C-UAS) to help mitigate threats to civilian populations and critical infrastructure…. We continue to share our own experiences and processes in an effort to improve Saudi Arabia's operational performance and reduce civilian casualties. CENTCOM's security cooperation with Saudi Arabia remains a critical link in our efforts to strengthen partners in the region and meet current and future challenges. The work of U.S. advisors is essential to the success of our mission, and Saudi Arabia underwrites the lion's share of their presence. In February 2019, CNN reported that Saudi Arabia and the UAE had provided U.S. military equipment (armored vehicles) to local Yemeni units fighting the Houthis in possible violation of end-user foreign military sale or direct commercial sale agreements. The coalition has denied these charges, while the U.S. State Department has said that it is "seeking additional information" on the issue. At the February 2019 Ministerial to Promote a Future of Peace and Security in the Middle East in Warsaw, Poland, members of the self-described "quad" (United States, United Kingdom, Saudi Arabia, and the United Arab Emirates) met to coordinate their policy toward the Yemen conflict. The quad emphasized the importance of implementing the Stockholm Agreement, the problematic role Iran plays in arming and financing the Houthis, and the need for additional humanitarian assistance. The foreign ministers comprising the quad also "expressed full support for Saudi Arabia and its legitimate national security concerns and called for an immediate end to such attacks by Houthi forces and their allies." On February 13, 2019, the House passed (248-177) H.J.Res. 37 , a joint resolution "Directing the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress." Prior to its passage by the House, the White House issued a Statement of Administration Policy in which the Administration argued that "the premise of the joint resolution is flawed" because the United States has provided only "limited support to member countries of the Saudi-led coalition" and U.S. forces providing such intelligence and logistics support are not engaged in hostilities. As amended and passed by the House, Section 4 of H.J.Res. 37 includes a rule of construction stating that "Nothing in this joint resolution may be construed to influence or disrupt any intelligence, counterintelligence, or investigative activities conducted by, or in conjunction with, the United States Government…" The Senate companion resolution, S.J.Res. 7 , was introduced on January 30, 2019 and passed by the Senate (54-46) on March 13, 2019. As amended, S.J.Res. 7 includes rules of construction stating that "nothing in this joint resolution may be construed to influence or disrupt any intelligence, counterintelligence or investigative activities relating to threats in or emanating from Yemen conducted by, or in conjunction with, the United States Government…" (Section 4) and that "nothing in this joint resolution may be construed as authorizing the use of military force" (Section 7). On February 7, 2019, Ranking Member on the Senate Foreign Relations Committee Senator Robert Menendez introduced S. 398 , the Saudi Arabia Accountability and Yemen Act of 2019. This bill, which was originally introduced in the 115 th Congress, would, among other things, require the end of in-flight refueling for Saudi-led coalition operations in Yemen, suspend certain arms sales to the kingdom, sanction persons blocking humanitarian access in Yemen, and sanction persons supporting the Houthis in Yemen. Although Houthi militia forces most likely do not depend on Iran for all of their armaments, financing, and manpower, many observers agree that Iran and its Lebanese ally Hezbollah have aided Houthi forces with advice, training, and arms shipments. In 2016, one unnamed Hezbollah commander interviewed about his group's support for the Houthis remarked "After we are done with Syria, we will start with Yemen, Hezbollah is already there.... Who do you think fires Tochka missiles into Saudi Arabia? It's not the Houthis in their sandals, it's us." In repeated public statements by high-level Saudi officials, Saudi Arabia has cited Iran's illicit support for the Houthis as proof that Iran is to blame for the Yemen conflict. Reports and allegations of Iranian involvement in Yemen have become more frequent as the war has continued, and from Iran's perspective, aiding the Houthis would seem to be a relatively low-cost way of keeping Saudi Arabia mired in the Yemen conflict. However, Iran had few institutionalized links to the Houthis before the civil conflict broke out in 2015, and questions remain about the degree to which Iran and its allies can control or influence Houthi behavior. At present, Iranian aid to the Houthis does not appear to match the scale of its commitments to proxies in other parts of the Middle East, such as in Syria, Lebanon, and Iraq. Prior to the 2015 conflict, the central government in Yemen had acquired variants of Scud-B missiles from the Soviet Union and North Korea. The Houthis took control of these missiles as part of their seizure of the capital. Since 2016, the Houthis have been firing what they call the "Burkan" short-range ballistic missile (claimed range of 500-620 miles) into Saudi Arabia (the latest version is the Burkan-2H). In November 2017, after the Houthis fired a Burkan-2H deep into Saudi Arabian territory, the Saudi-led coalition and U.S. officials said that the Burkan-2H is an Iran-manufactured Qaim missile. In January 2018, the United Nations Panel of Experts on Yemen concluded that Iran was in noncompliance with UNSCR 2216 for failing to prevent the transfer to Houthi forces of Iranian-made short-range ballistic missiles. On February 26, 2018, Russia vetoed a draft U.N. Security Council resolution that would have expressed U.N. concern that Iran is in noncompliance with the international arms embargo created by UNSCR 2216. In summer 2018, the United Nations Panel of Experts on Yemen provided a confidential report to the United Nations Security Council suggesting that Iran may be continuing to violate the international arms embargo by supplying the Houthis with advanced weaponry. After the U.N. experts visited Saudi Arabia and inspected debris from missiles fired by the Houthis, their report noted that these weapons showed "characteristics similar to weapons systems known to be produced in the Islamic Republic of Iran" and that there was a "high probability" that the missiles were manufactured outside of Yemen, shipped in sections to the country, and reassembled by the Houthis. In May 2018, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated five Iranian individuals who have "provided ballistic missile-related technical expertise to Yemen's Houthis, and who have transferred weapons not seen in Yemen prior to the current conflict, on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)." In testimony to the Senate Select Committee on Intelligence in January 2019, Director of National Intelligence Daniel Coats stated: In Yemen, Iran's support to the Huthis, including supplying ballistic missiles, risks escalating the conflict and poses a serious threat to US partners and interests in the region. Iran continues to provide support that enables Huthi attacks against shipping near the Bab el Mandeb Strait and land-based targets deep inside Saudi Arabia and the UAE, using ballistic missiles and UAVs. The U.N. Panel of Experts on Yemen reported in January 2019 that the panel "has traced the supply to the Houthis of unmanned aerial vehicles and a mixing machine for rocket fuel and found that individuals and entities of Iranian origin have funded the purchase." For Saudi Arabia, according to one prominent analyst, the Houthis embody what Iran seeks to achieve across the Arab world: that is, the cultivation of an armed nonstate, non-Sunni actor who can pressure Iran's adversaries both politically and militarily (akin to Hezbollah in Lebanon). A decade before the current conflict began in 2015, Saudi Arabia supported the central government of Yemen in various military campaigns against a Houthi insurgency which began in 2004. In 2014, when Houthi militants took over the capital and violated several power-sharing arrangements, Saudi leaders expressed increasing alarm about Houthi advances. In March 2015, after President Hadi, who had fled to Saudi Arabia, appealed for international intervention, Saudi Arabia quickly assembled an international coalition and launched a military offensive aimed at restoring Hadi's rule and evicting Houthi fighters from the capital and other major cities. Saudi-led coalition forces began conducting air strikes against Houthi-Saleh forces and imposed strict limits on sea and air traffic to Yemen. From the outset, Saudi leaders sought material and military support from the United States for the campaign. In March 2015, President Obama authorized "the provision of logistical and intelligence support to GCC-led military operations," and the Obama Administration announced that the United States would establish "a Joint Planning Cell with Saudi Arabia to coordinate U.S. military and intelligence support." U.S. CENTCOM personnel were deployed to provide related support, and U.S. mid-air refueling of coalition aircraft began in April 2015 and ended in November 2018. In the years since, the Saudi military and its coalition partners have provided advice and military support to a range of pro-Hadi forces inside Yemen, while waging a persistent air campaign against the Houthis and their allies. Saudi ground forces and Special Forces have conducted limited cross-border operations, and Saudi naval forces limit the entry and exit of vessels from Yemen's ports. Separately, a United Nations Verification and Inspection Mechanism (UNVIM) has operated since May 2016 to assist in validating commercial sea and air traffic in support of the arms embargo imposed by Resolution 2216. According to President Trump's December 2018 letter to Congress consistent with the War Powers Resolution, U.S. Armed Forces, "in a non-combat role," continued to provide military advice and limited information, logistics, and other support to regional forces combatting the Houthi insurgency in Yemen; however, aerial refueling of regional forces' aircraft ended in November 2018. United States forces are present in Saudi Arabia for this purpose. Such support does not involve United States Armed Forces in hostilities with the Houthis for the purposes of the War Powers Resolution. As the Saudi-led coalition's campaign against the Houthis continues and Yemen fragments, the United States has sustained counterterrorism operations against Al Qaeda in the Arabian Peninsula (AQAP) and various affiliates of the Islamic State. In total, CENTCOM conducted 36 air strikes in Yemen in 2018. According to President Trump's December 2018 letter to Congress consistent with the War Powers Resolution, "a small number of United States military personnel are deployed to Yemen to conduct operations against al-Qa'ida in the Arabian Peninsula (AQAP) and ISIS‑Yemen." In December 2018, General Frank McKenzie testified before the Senate Armed Services Committee stating that "they [AQAP] have an aspiration to attack the United States. They are prevented from generating that only because of the direct pressure that remains on them. So that is a clear, unequivocal national interest of the United States." Some observers contend that AQAP's power inside Yemen has diminished considerably as a result of losses sustained from U.S. counterterrorism operations and of competing Yemeni factions vying for supremacy. According to Gregory D. Johnsen, resident scholar at the Arabia Foundation, "AQAP is weaker now than it has been at any point since it was formed in 2009." In August 2018, U.S. officials claimed that one of the most high-value targets in the AQAP organization, bomb maker Ibrahim al Asiri, had been killed in a U.S. air strike last year. Asiri was a Saudi national who was believed to have created the explosive devices used in the 2009 Christmas Day attempted bombing of Northwest Airlines Flight 253, in a 2009 attack against former Saudi Arabian intelligence chief Mohammed bin Nayef, and in the October 2010 air cargo packages destined for Jewish sites in Chicago. In January 2019, U.S. officials confirmed that Jamal al-Badawi, an al Qaeda operative involved in the October 2000 bombing of the USS Cole in Aden, was killed in a precision strike in Marib governorate on January 1. Al-Badawi had been indicted by a federal grand jury in 2003 for the murder of U.S. nationals and U.S. military personnel. To date, two American soldiers have died in the ongoing U.S. counterterrorism campaign against AQAP and other terrorists inside Yemen. In January 2017, Ryan Owens, a Navy SEAL, died during a counterterrorism raid in which between 4 and 12 Yemeni civilians also were killed, including several children, one of whom was a U.S. citizen. The raid was the Trump Administration's first acknowledged counterterror operation. In August 2017, Emil Rivera-Lopez, a member of the elite 160th Special Operation Aviation Regiment, died when his Black Hawk helicopter crashed off the coast of Yemen during a training exercise. According to the United Nations, Yemen's humanitarian crisis is the worst in the world, with close to 80% of Yemen's population of nearly 30 million needing some form of assistance. The U.N.Office for the Coordination of Humanitarian Affairs (OCHA) estimates that two-thirds of the population is food insecure, one-third are suffering from extreme levels of hunger, and 230 out of Yemen's 333 districts were at risk of famine as of January 2019. In sum, the United Nations notes that humanitarian assistance is "increasingly becoming the only lifeline for millions of Yemenis." As noted above, on February 17, the parties to the conflict began to implement the Stockholm Agreement. The deal calls for main roads to reopen from Hudaydah to Sanaa and Taiz and humanitarian access to the Red Sea Mills grain storage facility, which holds enough grain to provide food for 3.7 million Yemenis for a month. Access to the Mills has been cut off since September 2018. On February 26 in Geneva, the United Nations and the Governments of Sweden and Switzerland hosted the third annual pledging conference for the crisis in Yemen. Saudi Arabia and the UAE each pledged $750 million. For 2019, the United Nations is seeking $4 billion from donors for programs in Yemen. The 2018 humanitarian appeal sought a little over $3 billion, of which donors have provided $2.58 billion to date. The United States, Saudi Arabia, the United Arab Emirates, and Kuwait combined accounted for 66.8% of all contributions to the 2018 appeal. Between FY2018 and FY2019, the United States has provided $720.8 million in emergency humanitarian aid for Yemen. Most of these funds ($498 million) are provided through USAID's Office of Food for Peace to support the World Food Programme in Yemen. Since March 2015, the United States has been the largest contributor of humanitarian aid to Yemen, with more than $1.71 billion in U.S. funding provided since FY2015. The United States provided a total of $566.2 million in humanitarian assistance in FY2018. Funds were provided to international aid organizations from USAID's Office of Foreign Disaster Assistance (OFDA), USAID's Food for Peace (FFP), and the U.S. Department of State's Bureau of Population, Refugees, and Migration (State/PRM). Humanitarian conditions continue to be undermined both by economic disruptions caused by the fracturing of the country's financial system and by access constraints imposed by parties to the conflict. Remote regions of northern Yemen deep in Houthi territory are often the most challenging areas in which to deliver food aid. In most other parts of the country, food is available for purchase in the marketplace but prices are unaffordable for wide swaths of the population. According to the Food and Agriculture Organization of the United Nations, "The average cost of the minimum survival food basket—comprised of the minimum items required for a household to survive for one month—remains more than 110 percent higher than prior to the conflict's escalation in March 2015." One cause of inflationary prices is the depreciation of the national currency (rial). Yemen has two competing central banks, one in Sanaa (run by the Houthis) and one in Aden (run by the Hadi government). The Houthis in Sanaa have depleted the original central bank's foreign currency reserves and have been unable to pay public sector salaries. The central bank in Aden has liberally printed money, which has driven down the value of the rial. According to the Economist Intelligence Unit's outlook for 2019, "rapid currency depreciation for most of 2018 significantly increased the price of imports [most Yemeni food is imported], and, despite a rally in the rial in late 2018, is a trend that is likely to continue throughout the forecast period as the Aden-based authorities continue to print money..." In 2018, Saudi Arabia agreed to lend $2 billion with the central bank in Aden to help the Hadi government finance food imports. However, according to one report, as of November 2018, "only a little over $170 million had been authorized for payment." One of the key aspects of the 2015 United Nations Security Council Resolution (UNSCR) 2216 is that it authorizes member states to prevent the transfer or sale of arms to the Houthis and also allows Yemen's neighbors to inspect cargo suspected of carrying arms to Houthi fighters. In March 2015, the Saudi-led coalition imposed a naval and aerial blockade on Yemen, and ships seeking entry to Yemeni ports required coalition inspection, leading to delays in the off-loading of goods and increased insurance and related shipping costs. Since Yemen relies on foreign imports for as much as 90% of its food supply, disruptions to the importation of food exacerbate already strained humanitarian conditions resulting from war. To expedite the importation of goods while adhering to the arms embargo, the European Union, Netherlands, New Zealand, the United Kingdom, and the United States formed the U.N. Verification and Inspection Mechanism (UNVIM), a U.N.-led operation designed to inspect incoming sea cargo to Yemen for illicit weapons. UNVIM, which began operating in February 2016, can inspect cargo while also ensuring that humanitarian aid is delivered in a timely manner. However, Saudi officials argue that coalition-imposed restrictions and strict inspections of goods and vessels bound for Yemen are still required because of Iranian weapons smuggling to Houthi forces. Saudi officials similarly argue that the delivery of goods to ports and territory under Houthi control creates opportunities for Houthi forces to redirect or otherwise exploit shipments for their material or financial benefit. According to the latest reporting from United Nations Office for the Coordination of Humanitarian Affairs (U.N.OCHA), over the last several months, the volume of cargo discharged at Hudaydah and Saleef ports dropped, and now is 20% less than when the conflict began in 2015. Yemen is experiencing the world's largest ongoing cholera outbreak. Since late 2016, there have been more than 1.3 million suspected cholera cases and nearly 2,800 associated deaths. Cholera is a diarrheal infection that is contracted by ingesting food or water contaminated with the bacterium Vibrio cholerae . Yemen's water and sanitation infrastructure have been devastated by the war. Basic municipal services such as garbage collection have deteriorated and, as a result, waste has gone uncollected in many areas, polluting water supplies and contributing to the cholera outbreak. In addition, international human rights organizations have accused the Saudi-led coalition of conducting air strikes that have unlawfully targeted civilian infrastructure, such as water wells, bottling facilities, health facilities, and water treatment plants. Humanitarian organizations working in the WASH sector have improved cholera prevention and reduced the frequency of new cases, but have not eliminated the crisis. According to U.N.OCHA's 2019 Yemen Humanitarian Needs Overview, "Public water and sanitation systems require increased support to provide minimum services and avoid collapse. Some 22 per cent of rural and 46 per cent of urban populations are connected to partially functioning public water networks, and lack of electricity or public revenue creates significant reliance on humanitarian support." As of January 2019, 17.8 million people in Yemen are living without access to safe water and sanitation, and 19.7 million lack access to adequate health care. While the Stockholm Agreement has the potential to lead to a broader, nation-wide cease-fire, the longer it takes to implement, the greater risk of the agreement's collapse and the prospect for renewed conflict in Hudaydah. Although fighting has continued along several fronts since December 2018, the Stockholm Agreement has provided the Saudi-led coalition with the possibility of gradually extricating itself its intervention in Yemen. If the cease-fire collapses, then the coalition would have to weigh the benefits of trying to evict the Houthis from Hudaydah militarily with the humanitarian costs to the Yemeni people and the reputational damage it would incur within the international community. Even if the United Nations is able to make progress toward a comprehensive peace agreement, Yemen is still beset by multiple political conflicts and violence. In the south, regional secessionists are at odds with what remains of President Hadi's internationally recognized government. In the partially Houthi-besieged city of Taiz, Yemen's third-largest city, rival militias backed by the coalition have engaged in internecine warfare and have been accused by human rights groups of committing war crimes. Many key questions about the future of Yemen remain unanswered. In the context of the current Houthi-Saudi-led coalition conflict, few observers have insight into whether or under what conditions the Houthis might be willing to relinquish their heavy or advanced weaponry used to threaten Saudi Arabia, the United Arab Emirates, and maritime shipping. Iran, now involved in Yemen in new ways, may prove unwilling to sever ties that vex its Saudi adversaries. Political and military compromise between the coalition and the Houthis could bring fighting to an end, but might also entrench an anti-U.S. and anti-Saudi Houthi movement as a leading force in a new order in Yemen. The complexity of Yemen's internal politics and the short-term need to resolve the current conflict have overshadowed domestic and international consideration of what the future of Yemeni governance may be. Overall, the prospects for returning to a unified Yemen appear dim. According to the United Nations Panel of Experts on Yemen, "The authority of the legitimate Government of Yemen has now eroded to the point that it is doubtful whether it will ever be able to reunite Yemen as a single country." While the country's unity is a relatively recent historical phenomenon (dating to 1990), the international community had widely supported the reform of Yemen's political system under a unified government just a few years ago. In 2013, Yemenis from across the political spectrum convened a National Dialogue Conference aimed at reaching broad national consensus on a new political order. However, in January 2014 it ended without agreement, and the Houthis launched a war. The failure of the 2013 National Dialogue Conference aimed at reaching broad national consensus on a new political order continues to violently reverberate throughout Yemen. If some semblance of normalcy is to return to the country, local players will have to return to addressing key issues, such as the power of a central government, the devolution of power to regional authorities, and the composition of national security forces. The longer these issues remain unresolved, the greater the prospect for Yemen's dissolution into competing self-declared autonomous regions.
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This report provides information on the ongoing crisis in Yemen. Now in its fifth year, the war in Yemen shows no signs of abating. The war has killed thousands of Yemenis, including combatants as well as civilians, and has significantly damaged the country's infrastructure. The difficulty of accessing certain areas of Yemen has made it problematic for governments and aid agencies to count the war's casualties. One U.S. and European-funded organization, the Armed Conflict Location & Event Data Project (ACLED), estimates that 60,000 Yemenis have been killed since January 2016. Though fighting continues along several fronts, on December 13, 2018, Special Envoy of the United Nations Secretary-General for Yemen Martin Griffiths brokered a cease-fire centered on the besieged Red Sea port city of Hudaydah, Yemen's largest port. As part of the deal, the coalition and the Houthis agreed to redeploy their forces outside Hudaydah city and port. The United Nations agreed to chair a Redeployment Coordination Committee (RCC) to monitor the cease-fire and redeployment. On January 16, the United Nations Security Council (UNSCR) passed UNSCR 2452, which authorized (for a six-month period) the creation of the United Nations Mission to support the Hudaydah Agreement (UNMHA), of which the RCC is a significant component. As of late March 2019, the Stockholm Agreement remains unfulfilled, although U.N. officials claim that the parties have made "significant progress towards an agreement to implement phase one of the redeployments of the Hudayda agreement." Although both the Obama and Trump Administrations have called for a political solution to the conflict, the two sides in Yemen appear to fundamentally disagree over the framework for a potential political solution. The Saudi-led coalition demands that the Houthi militia disarm, relinquish its heavy weaponry (ballistic missiles and rockets), and return control of the capital, Sanaa, to the internationally recognized government of President Abdu Rabbu Mansour Hadi, who is in exile in Saudi Arabia. The coalition asserts that there remains international consensus for these demands, insisting that the conditions laid out in United Nations Security Council Resolution (UNSCR) 2216 (April 2015) should form the basis for a solution to the conflict. The Houthis reject UNSCR 2216 and seem determined to outlast their opponents while consolidating their control over northern Yemen. Since the December 2017 Houthi killing of former President Ali Abdullah Saleh, a former Houthi ally, there is no apparent single Yemeni rival to challenge Houthi rule in northern Yemen. Armed groups, including Islamist extremists, operate in other parts of the country, and rival political movements and trends advance competing visions for the long-term reestablishment of national governance in the country. The reconciliation of Yemeni factions and the redefinition of the country's political system, security sector, and social contract will likely require years of additional diplomatic engagement. According to the United Nations, Yemen's humanitarian crisis is the worst in the world, with close to 80% of Yemen's population of nearly 30 million needing some form of assistance. Two-thirds of the population is considered food insecure; one-third is suffering from extreme levels of hunger; and the United Nations estimates that 230 out of Yemen's 333 districts are at risk of famine. In sum, the United Nations notes that humanitarian assistance is "increasingly becoming the only lifeline for millions of Yemenis." For additional information on Yemen, including a summary of relevant legislation, please see CRS Report R45046, Congress and the War in Yemen: Oversight and Legislation 2015-2019, by Jeremy M. Sharp and Christopher M. Blanchard.
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This report provides background information and potential oversight issues for Congress on war-related and other international emergency or contingency-designated funding since FY2001. Since the terrorist attacks of September 11, 2001, Congress has appropriated approximately $2 trillion in discretionary budget authority designated for emergencies or OCO/GWOT in support of the broad U.S. government response to the 9/11 attacks and for other related international affairs activities. This figure includes $1.8 trillion for the Department of Defense (DOD), $154 billion for the Department of State and U.S. Agency for International Development (USAID), and $3 billion for the Department of Homeland Security (DHS) and Coast Guard (see Figure 1 ). This CRS report is meant to serve as a reference on certain funding designated as emergency requirement s or for Overseas Contingency Ope rations/Global War on Terrorism (OCO/GWOT), as well as related budgetary and policy issues. It does not provide an estimate of war costs within the OCO/GWOT account (all of which may not be for activities associated with war or defense) or such costs in the DOD base budget or other agency funding (which may be related to war activities, such as the cost of health care for combat veterans). For additional information on the FY2019 budget and related issues, see CRS Report R45202, The Federal Budget: Overview and Issues for FY2019 and Beyond , by [author name scrubbed]; CRS In Focus IF10942, FY2019 National Defense Authorization Act: An Overview of H.R. 5515 , by [author name scrubbed] and [author name scrubbed]; and CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations , by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. For additional information on the Budget Control Act as amended, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions , by [author name scrubbed] and [author name scrubbed], and CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions , by [author name scrubbed]. For additional information on U.S. policy in Afghanistan and the Middle East, see CRS Report R45122, Afghanistan: Background and U.S. Policy , by [author name scrubbed], CRS Report R45096, Iraq: Issues in the 115th Congress , by [author name scrubbed], and CRS Report RL33487, Armed Conflict in Syria: Overview and U.S. Response , coordinated by [author name scrubbed]. Congress may consider one or more supplemental appropriations bills (colloquially called supplementals) for a fiscal year to provide funding for unforeseen needs (such as a response to a national security threat or a natural disaster), or to increase appropriations for other activities that have already been funded. Supplemental appropriations measures generally provide additional funding for selected activities over and above the amount provided through annual or continuing appropriations. Throughout the 20 th century, Congress relied on supplemental appropriations to fund war-related activities, particularly in the period immediately following the start of hostilities. For example, in 1951, a year after the start of the Korean War, Congress approved DOD supplemental appropriations totaling $32.8 billion ($268 billion in constant FY2019 dollars). In 1952, DOD supplemental appropriations totaled just $1.4 billion ($11 billion in constant FY2019), as the base budget incorporated costs related to the war effort. A similar pattern occurred, to varying degrees, during the Vietnam War and 1990-1991 Gulf War. During the post-9/11 conflicts, primarily conducted in Afghanistan and Iraq but also in other countries, Congress has, for an extended period and to a much greater degree than in previous conflicts in the 20 th century, appropriated supplemental and specially designated funding over and above the base DOD budget—that is, funding for planned or regularly occurring costs to man, train, and equip the military force. Since FY2001, DOD funding designated for OCO/GWOT has averaged 17% of the department's total budget authority (see Figure 2 ). By comparison, during the conflict in Vietnam—the only other to last more than a decade—DOD funding designated for non-base activities averaged 6% of the department's total budget authority. Supplemental appropriations can provide flexibility for policymakers to address demands that arise after funding has been appropriated. However, that flexibility has caused some to question whether supplementals should only be used to respond to unforeseen events, or whether they should also provide funding for activities that could reasonably be covered in regular appropriations acts. Congress used supplemental appropriations to provide funds for defense and foreign affairs activities related to operations in Afghanistan and Iraq following 9/11, and each subsequent fiscal year through FY2010. Initially understood as reflecting needs that were not anticipated during the regular appropriations cycle, supplemental appropriations were generally enacted as requested, and almost always designated as emergency requirements. Beginning in FY2004, DOD received some of its war-related funding in its regular annual appropriations; these funds were designated as emergency. When funding needs for war and non-war-related activities were higher than anticipated, the Bush Administration submitted supplemental requests. In the FY2011 appropriations cycle, the Obama Administration moved away from submitting supplemental appropriations requests to Congress for war-related activities and used the regular budget and appropriation process to fund operations. This approach implied that while the funds might be war-related, they largely supported predictable ongoing activities rather than unanticipated needs. In concert with this change in budgetary approach, the Obama Administration began formally using the term Overseas Contingency Op erations in place of the Bush Administration's term Global War on Terror . Both the Obama and Trump Administrations requested that OCO funding be designated in a manner that would effectively exempt such funding from the BCA limits on discretionary defense spending. Currently, there is no overall procedural or statutory limit on the amount of emergency or OCO/GWOT-designated spending that may be appropriated on an annual basis. Both Congress and the President have roles in determining how much emergency or OCO/GWOT spending is provided to federal agencies each fiscal year. Such spending must be designated as such within the President's budget request for congressional consideration. The President must separately designate the spending after Congress enacts appropriations for it to be available for expenditure. The emergency funding designation predated the OCO/GWOT designation. Through definitions statutorily established by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177 ), spending designated as emergency requirements is for "unanticipated" purposes, such as those that are "sudden ... urgent ... unforeseen ... and temporary." The BBEDCA does not further specify the types of activities that are eligible for that designation. Thus, any discretionary funding designated by Congress and the President as being for an emergency is effectively exempted from certain statutory and procedural budget enforcement mechanisms, such as the BCA limits on discretionary spending. Debate of what should constitute OCO/GWOT or emergency activities and expenses has shifted over time, reflecting differing viewpoints about the extent, nature, and duration of U.S. military operations in Afghanistan, Iraq, Syria, and elsewhere. Over the years, both Congress and the President have at times adopted more, and at times less, expansive definitions of such designations to accommodate the strategic, budgetary, and political needs of the moment. Prior to February 2009, U.S. operations in response to the 9/11 attacks were collectively referred to as the Global War on Terror , or GWOT. Between September 2001 and February 2009, there was no separate budgetary designation for GWOT funds—instead, funding associated with those operations was designated as an emergency requirement. The term OCO was not applied to the post-9/11 military operations in Iraq and Afghanistan until 2009. In February 2009, the Obama Administration released A New Era of Responsibili ty: Renewing America's Promise , a presidential fiscal policy document. That document did not mention or reference GWOT; instead, it used the term OCO in reference to ongoing military operations in Iraq and Afghanistan. The first request for emergency funding for OCO—not GWOT—was delivered to Congress in April 2009. Since the FY2010 budget cycle, DOD has requested both base budget and OCO funding as part of its annual budget submission to Congress. Beginning with the National Defense Authorization Act for Fiscal Year 2010 (NDAA; P.L. 111-84 ), the annual defense authorization bills have referenced the authorization of additional appropriations for OCO rather than the names of U.S. military operations conducted primarily in Afghanistan and Iraq. In 2011, the BCA ( P.L. 112-125 ) amended the BBEDCA to create the Overseas Contingency Ope rations/Global War on Terrorism designation, which provided Congress and the President with an alternate way to exempt funding from the BCA caps without using the emergency designation. Beginning with the Consolidated Appropriations Act, 2012 ( P.L. 112-74 ), annual appropriations bills have referenced the OCO/GWOT designation. The foreign affairs agencies began formally requesting OCO/GWOT funding in FY2012, distinguishing between what is referred to as enduring, ongoing or base costs versus any extraordinary, temporary costs of the State Department and USAID in supporting ongoing U.S. operations and policies in Iraq, Afghanistan, and Pakistan. Congress, having used OCO/GWOT exemption for DOD, adopted this approach for foreign affairs, though its uses for State, Foreign Operations, and Related Programs (SFOPS) activities have never been permanently defined in statute. For the first foreign affairs OCO/GWOT appropriation, in FY2012, funds were provided for a wide range of recipient countries beyond the countries in the President's request, including Yemen, Somalia, Kenya, and the Philippines. In addition to country-specific uses, OCO/GWOT-designated funds were also appropriated for the Global Security Contingency Fund. All budgetary legislation is subject to a set of enforcement procedures associated with the Congressional Budget Act of 1974 ( P.L. 93-344 ), as well as other rules, such as those imposed by the Budget Control Act of 2011 ( P.L. 112-125 ) as amended. Those rules provide mechanisms to enforce both procedural and statutory limits on discretionary spending. Enacted on August 2, 2011, the BCA as amended sets limits on defense and nondefense spending. As part of an agreement to increase the statutory limit on public debt, the BCA aimed to reduce annual federal budget deficits by a total of at least $2.1 trillion from FY2012 through FY2021, with approximately half of the savings to come from defense. The spending limits (or caps ) apply separately to defense and nondefense discretionary budget authority. The caps are enforced by a mechanism called sequestration . Sequestration automatically cancels previously enacted appropriations (a form of budget authority) by an amount necessary to reach prespecified levels. The BCA effectively exempted certain types of discretionary spending from the statutory limits, including funding designated for OCO/GWOT. As a result, Congress and the President have designated funding for OCO to support activities that, in previous times, had been funded within the base budget. This was done, in part, as a response to the discretionary spending limits enacted by the BCA. By designating funding for OCO for certain activities not directly related to contingency operations, Congress and the President can effectively continue to increase topline defense, foreign affairs, and other related discretionary spending without triggering sequestration. Congress has repeatedly amended the legislation to raise the spending limits (thus lowering its deficit-reduction effect by corresponding amounts). Congress has passed four bills that revised the automatic spending caps initially established by the BCA, including the following: American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240 ); Bipartisan Budget Act of 2013 (BBA 2013; P.L. 113-67 ); Bipartisan Budget Act of 2015 (BBA 2015; P.L. 114-74 ); and Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ). On February 9, 2018, three days before President Donald Trump submitted his FY2019 budget request, Congress passed the Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123 ). The act raised the discretionary spending limits set by the BCA from $1.069 trillion for FY2017 to $1.208 trillion for FY2018 and to $1.244 trillion for FY2019. The BBA 2018 increased FY2019 discretionary defense funding levels (excluding OCO) by the largest amounts to date—$85 billion, from $562 billion to $647 billion, and nondefense funding (including SFOPS) by $68 billion, from $529 billion to $597 billion. It did not change discretionary spending limits for FY2020 and FY2021. DOD documents indicate the department in recent years has used OCO funding for activities viewed as unrelated to war. For example, the department's FY2019 budget request estimates $358 billion in OCO funding from FY2015 through FY2019. Of that amount, DOD categorizes $68 billion (19%) for activities unrelated to operations in Afghanistan, Iraq, and Syria. These activities are described as "EDI/Non-War," referring in part to the European Deterrence Initiative, and "Base-to-OCO," referring to OCO funding used for base-budget requirements. Similarly, a DOD Cost of War report from June 2018 shows $1.8 trillion in war-related appropriations from FY2001 through FY2018 for operations primarily conducted in Afghanistan, Iraq, and Syria. Of that total, DOD categorizes $219 billion (12%) as other than "war funds." These funds are described as "Classified," "Modularity," "Fuel (non-war)," "Noble Eagle (Base)," and "Non-War." International affairs agencies also began increasing the share of their budgets designated for OCO, and applying the designation to an increasing range of activities apparently unrelated to conflicts. OCO as a share of the international affairs budget grew from about 21% in FY2012 to nearly 35% in FY2017. Unlike DOD, however, the State Department and USAID have not specified whether any OCO-designated funds are considered part of the agencies' base budgets. According to a DOD budget document from FY2016, the Obama Administration planned to "transition all enduring costs currently funded in the OCO budget to the base budget beginning in 2017 and ending by 2020." The plan was to describe "which OCO costs should endure as the United States shifts from major combat operations, how the Administration will budget for the uncertainty surrounding unforeseen future crises, and the implications for the base budgets of DOD, the Intelligence Community, and State/OIP. This transition will not be possible if the sequester-level discretionary spending caps remain in place." The BCA remained in effect and OCO funding was used for base-budget requirements. Some defense officials and policymakers say OCO funding enables a flexible and timely response to an emergency or contingency and provides a political and fiscal safety valve to the BCA caps and threat of sequestration. They say if OCO funding were not used in such a manner and discretionary spending limits remained in place, DOD and other federal agencies would be forced to cut base budgets and revise strategic priorities. For example, former Defense Secretary Jim Mattis has said if Congress allows the FY2020 and FY2021 defense spending caps to take effect, the 2018 National Defense Strategy, which calls for the United States to bolster its military advantage against potential competitors such as Russia and China, "is not sustainable." Critics, including Acting White House Chief of Staff Mick Mulvaney, have described the OCO account as a "slush fund" for military and foreign affairs spending unrelated to contingency operations. Mulvaney, former director of the White House Office of Management and Budget (OMB), has described the use of OCO funding for base budget requirements as "budget gimmicks." Critics argue what was once generally restricted to a fund for replacing combat losses of equipment, resupplying expended munitions, transporting troops to and through war zones, and distributing foreign aid to frontline states has "ballooned into an ambiguous part of the budget to which government financiers increasingly turn to pay for other, at times unrelated, costs." OMB criteria for OCO funding include the combat losses of ground vehicles, aircraft, and other equipment; replenishment of munitions expended in combat operations; facilities and infrastructure in the theater of operations; transport of personnel, equipment, and supplies to and from the theater; among other items and activities. Determining which activities are directly related, tangentially related, or unrelated to war operations is often a point of debate. Some have questioned the use of OCO funding to purchase F-35 fighter jets: "It is jumping the shark.... There's no pretense that it has anything to do with the region." Others have argued it makes sense for the military to use OCO funding to purchase new aircraft to replace planes used in current conflicts and no longer in production: "What are the conditions that are making the combatant commanders and those with train/equip authority to say, 'We need more of this?'" Congress has appropriated approximately $2 trillion in discretionary budget authority for war-related and other international emergency or contingency-designated activities since 9/11. This figure is a CRS estimate of funding designated for emergencies or OCO/GWOT in support of the broad U.S. government response to the 9/11 attacks, as well as other foreign affairs activities, from FY2001 through FY2019. This includes $1.8 trillion for DOD, $154 billion for the Department of State and USAID, and $3 billion for DHS and the Coast Guard (see Table 1 ). These figures do not include emergency-designated funding appropriated in this period for domestic programs, such as disaster response. From FY2001 through FY2009, DOD received $1.8 trillion in appropriations for OCO/GWOT, or approximately 17% of the department's total discretionary budget authority of $10.8 trillion during the period. The department's OCO/GWOT funding peaked in FY2008 both in terms of nominal dollars, at $186.9 billion, and as a share of its discretionary budget, at 28.1% (see Figure 3 ), after the Bush Administration surged additional U.S. military personnel to Iraq. The department's OCO funding also increased as a share of its discretionary spending from FY2009 to FY2010 following the Obama Administration's deployment of more U.S. military personnel to Afghanistan, and again in FY2017 following enactment of legislation in response to the Trump Administration's request for additional appropriations. In FY2019, the department's OCO/GWOT funding totaled $68.8 billion, or 10% of its discretionary spending. In terms of appropriations titles, more than two-thirds of OCO/GWOT funding since FY2001 has been for Operation and Maintenance (O&M)—nearly double the percentage of base budget funding for O&M over the same period (see Figure 4 ). O&M funds pay for the operating costs of the military such as fuel, maintenance to repair facilities and equipment, and the mobilization of forces. DOD describes "war-related operational costs" as operations, training, overseas facilities and base support, equipment maintenance, communications, and replacement of combat losses and enhancements. In terms of the military services, more than half (55%) of OCO/GWOT funding since FY2001 has gone to the Army—more than double the percentage of base budget funding for the service during this period (see Figure 5 ). Emergency appropriations were initially provided as general "defense-wide" appropriations. Beginning in FY2003, as operations evolved and planning developed, allocations increased and were specifically provided for the services. OCO funding for DOD has not decreased at the same rate as the number of U.S. troops in Afghanistan, Iraq, and Syria has decreased. For example, the number of U.S. military personnel in Afghanistan, Iraq, and Syria decreased from a peak of 187,000 personnel in FY2008 (including 148,000 in Iraq and 39,000 in Afghanistan) to an assumed level of nearly 18,000 personnel in FY2019 (including 11,958 personnel in Afghanistan and 5,765 personnel in Iraq and Syria)—a decline of approximately 169,000 personnel (90%). Meanwhile, OCO funding decreased from a peak of $187 billion in FY2008 to $69 billion in FY2019—a decline of approximately $118 billion (63%). While the number of U.S. forces in Afghanistan, Iraq, and Syria has decreased since FY2009, the number of U.S. troops deployed or stationed elsewhere to support those personnel has fallen by a lesser degree and, in recent years, remained relatively steady. For example, the number of support forces—that is, personnel from units and forces operating outside of Afghanistan, Iraq, Syria, and other countries (including those stationed in the continental United States or otherwise mobilized) decreased from 112,000 personnel in FY2009 to an assumed level of 76,073 personnel in FY2019—a decline of 35,927 personnel (32%). In addition, when these support forces are combined with in-country force levels, the total force level decreases by a percentage more similar to the OCO budget, from 297,000 personnel in FY2009 to an assumed level of 93,796 personnel in FY2019—a decline of 203,204 personnel (68%) (see Figure 6 ). Some of these support forces serve in U.S. Central Command's area of responsibility, which includes 20 countries in West Asia, North Africa, and Central Asia, and whose forward headquarters is based in Al Udeid Air Base in Qatar. According to DOD, the reason OCO funding has not fallen in proportion to the number of U.S. troops in Afghanistan, Iraq, and Syria is "due to the fixed, and often inelastic, costs of infrastructure, support requirements, and in-theater presence to support contingency operations." For example, in FY2019, the department requested $20 billion in OCO funding for "in-theater support"—nearly 30% of the OCO request and more than any other functional category. However, some analysts have noted the U.S. military's fixed costs in Afghanistan remained relatively stable at roughly $7 billion a year from FY2005 through FY2013 until after the BCA went into effect—and have since increased to roughly $32 billion a year, suggesting "that roughly $25 billion in 'enduring' or base budget costs migrated into the Afghanistan budget, effectively circumventing the budget caps. The actual funding needed for operations in Afghanistan is roughly $20 billion in FY2019." Title 10, Section 101, of the United States Code, defines a contingency operation as any Secretary of Defense-designated military operation "in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States or against an opposing military force." Since the 1990s NATO intervention in the Balkans, DOD Financial Management Regulations (FMR) have defined contingency operations costs as those expenses necessary to cover incremental costs "that would not have been incurred had the contingency operation not been supported." Such incremental costs would not include, for example, base pay for troops or planned equipment modernization, as those expenditures are normal peacetime needs of the DOD. In September 2010, the Office of Management and Budget (OMB), in collaboration with DOD, issued criteria for the department to use in making war/overseas contingency operations funding requests (see Appendix A ). In January 2017, the Government Accountability Office (GAO) concluded the criteria for deciding whether items belong in the base budget or OCO funding "are outdated and do not address the full scope of activities" in the budget request. "For example, they do not address geographic areas such as Syria and Libya, where DOD has begun military operations; DOD's deterrence and counterterrorism initiatives; or requests for OCO funding to support requirements not related to ongoing contingency operations" it states. Section 1524 of the National Defense Authorization Act for Fiscal Year 2018 ( P.L. 115-91 ), directed the Secretary of Defense to "update the guidelines regarding the budget items that may be covered by overseas contingency operations accounts." Congress has enacted legislation directing DOD to compile reports on the costs of certain contingency operations. Section 1266 of the National Defense Authorization Act for Fiscal Year 2018 ( P.L. 115-91 ) directs the Secretary of Defense to submit the Department of Defense Supplemental and Cost of War Execution report, known as the Cost of War report, on a quarterly basis to the congressional defense committees and the GAO: "Not later than 45 days after the end of each fiscal year quarter, the Secretary of Defense shall submit to the congressional defense committees and the Comptroller General of the United States the Department of Defense Supplemental and Cost of War Execution report for such fiscal year quarter." The conference report accompanying the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019 ( P.L. 115-245 ) requires DOD to report incremental costs for operations in Afghanistan, Iraq, and other countries in the U.S. Central Command area of responsibility and directs: the Secretary of Defense to continue to report incremental costs for all named operations in the Central Command Area of Responsibility on a quarterly basis and to submit, also on a quarterly basis, commitment, obligation, and expenditure data for the Afghanistan Security Forces Fund, the Counter-Islamic State of Iraq and Syria Train and Equip Fund, and for all security cooperation programs funded under the Defense Security Cooperation Agency in the Operation and Maintenance, Defense-Wide Account. DOD's June 2018 Cost of War report to Congress details $1.5 trillion in obligations associated with certain contingency operations from FY2001 through FY2018. That figure includes $757.1 billion for those conducted primarily in Iraq—Operation Iraqi Freedom (OIF), Operation New Dawn (OND), and Operation Inherent Resolve (OIR); $727.7 billion for those conducted primarily in Afghanistan—Operation Enduring Freedom (OEF) and Operation Freedom's Sentinel (OFS); and $27.8 billion for those conducted primarily in the United States (see Table 2 and Figure 7 ). DOD's quarterly Cost of War reports are intended to provide Congress, GAO, and other stakeholders insight into the how the department obligates war-related appropriations. The reports include base and OCO obligations related to war activities, as well as obligation data broken down by certain major operations, service, component, agency, and appropriation. However, as GAO has noted, "the proportion of OCO appropriations not associated with specific operations identified in the statutory Cost of War reporting requirement has trended upward" in part because the criteria DOD uses for making OCO funding requests is outdated and not always used. More recently, the June 2018 Cost of War report does not appear to reference three recently classified overseas contingency operations targeting militants affiliated with al-Qaeda and the Islamic State of Iraq and Syria (ISIS): Operation Yukon Journey in the Middle East, Northwest Africa Counterterrorism, and East Africa Counterterrorism. Some observers have noted other limitations to Cost of War reports, such as incomplete accounting of costs, limited distribution of the documents and underlying data, and formatting that makes it difficult to reconcile the data with information contained in budget justification documents. Between FY2001 and FY2018, Congress appropriated a total of $154 billion in OCO funds for State Department and USAID. For FY2018 (the most recent full-year appropriations for foreign affairs agencies), OCO funding amounted to 22% of the total appropriations for State Department, Foreign Operations and Related Programs appropriation. The Obama Administration's FY2012 International Affairs budget request was the first to include a request for OCO funds for "extraordinary and temporary costs of operations in Iraq, Afghanistan, and Pakistan." At the time, the Administration indicated that the use of this designation was intended to provide a transparent, whole-of-government approach to the exceptional war-related costs incurred in those three countries, thus better aligning the associated military and civilian costs. This first foreign affairs OCO request identified the significant resource demands placed on the State Department as a result of the transitions from military-led to civilian-led missions in Iraq and Afghanistan, as well as the importance of a stable Pakistan for the U.S. effort in Afghanistan. The FY2012 foreign affairs OCO request included: for Iraq, funding for the U.S. Embassy in Baghdad, consulates throughout Iraq, security costs in light of the then-planned U.S. military withdrawal, a then-planned civilian-led Police Development and Criminal Justice Program, military and development assistance in Iraq, and oversight of U.S. foreign assistance through the Special Inspector General for Iraq Reconstruction; for Afghanistan, funding to strengthen the Afghan government and build institutional capacity, support State/USAID and other U.S. government agency civilians deployed in Afghanistan, provide short-term economic assistance to address counterinsurgency and stabilization efforts, and provide oversight of U.S. foreign assistance programs in Afghanistan through the Office of the Special Inspector General for Afghanistan Reconstruction; and for Pakistan, funding to support U.S. diplomatic presence and diplomatic security in Pakistan, provide Pakistan Counterinsurgency Capability Funds (PCCF) to train and equip Pakistani forces to eliminate insurgent sanctuaries and promote stability and security in neighboring Afghanistan and the region. In subsequent years, the Administration designated certain State Department activities in Syria and other peacekeeping activities as OCO, and Congress accepted and broadened this expanded use of OCO in annual appropriations. In the FY2017 budget request, the Administration further broadened its use of State OCO funds, applying the designation to funds for countering Russian aggression, counterterrorism, humanitarian assistance, and aid to Africa. In addition to OCO funds requested through the normal appropriations process, the Administration in recent years requested emergency supplemental funding (designated as OCO) to support State/USAID efforts in countering the Islamic State and to respond to global health threats such as the Ebola and Zika viruses. For FY2019, the Trump Administration requested no OCO/GWOT funding for the Department of State and USAID, although the FY2019 House and Senate SFOPS bills ( H.R. 6385 and S. 3108 , 115 th Congress) would have appropriated approximately $8 billion in OCO-designated funding for various priorities. The estimated $154.1 billion in emergency and OCO/GWOT appropriations enacted to date for State/USAID includes major non-war-related programs, such as aid for the 2004 tsunami along Indian Ocean coasts, 2010 earthquake in Haiti, 2013 Ebola outbreak in West Africa, and 2015 worldwide outbreak of the Zika virus; as well as diplomatic operations (e.g., paying staff, providing security, and building and maintaining embassies). OCO/GWOT has also funded a variety of foreign aid programs, ranging from the Economic Support Fund to counter-narcotics in Afghanistan, Pakistan, and Iraq, among other activities in other countries. Figure 8 depicts the emergency or OCO appropriations for foreign affairs activities. Since 2012, when the OCO designation was first used for foreign affairs, more OCO funds have been appropriated than were requested each year, and those have also been authorized to be used in additional countries. Since January 2002, approximately $3 billion of post-9/11 emergency and OCO-designated funding has been provided to the U.S. Coast Guard (USCG) for its traditional homeland security missions and for USCG operations in support of U.S. Navy activities. This funding has been provided at various times as either an appropriation to the Coast Guard's operating expenses accounts, or as a transfer from Navy accounts to the Coast Guard. Open-source information on the use of those funds has varied. One FY2009 supplemental appropriations request included funding as a transfer, with the intent of funding "Coast Guard operations in support of OIF and OEF, as well as other classified activities." The FY2017 OCO request for annual appropriations for Navy Operations and Maintenance included $163 million for Coast Guard operational support for the deployment of patrol boats to the Northern Arabian Gulf and a port security unit to Guantanamo Bay, among other pay and equipment expenses. The Trump Administration initially requested a total of $89 billion in OCO funding for FY2019. All the funding was requested by DOD. In an amendment to the budget after Congress raised the BCA spending caps as part of the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ), the Administration removed the OCO designation from $20 billion of the funding, in effect, shifting that amount into the DOD base budget request. In a statement on the budget amendment, Mulvaney said the request fixes "long-time budget gimmicks" in which OCO funding has been used for base budget requirements. Beginning in FY2020, "the Administration proposes returning to OCO's original purpose by shifting certain costs funded in OCO to the base budget where they belong," he wrote. Of the revised amount of $69 billion requested for DOD OCO funding in FY2019: $46.3 billion (67%) was for Operation Freedom's Sentinel (OFS) in Afghanistan and related missions; $13 billion (22%) for Operation Inherent Resolve (OIR) in Iraq and Syria and related missions; $4.8 billion (9%) for the European Deterrence Initiative (EDI) to boost the U.S. military presence in eastern Europe to deter Russian military aggression; and $0.9 billion (1%) for security cooperation (see Figure 9 ). The FY2019 OCO budget assumes a total force level (average annual troop strength) of 93,796 personnel. That figure includes: 11,958 primarily in Afghanistan (OFS); 5,765 primarily in Iraq and Syria (OIR); 59,463 for in-theater support; and 16,610 primarily in the continental United States (CONUS) or otherwise mobilized (see Figure 10 ). The number of personnel actually in-country or in-theater at any given time may exceed or fall below those assumed levels. The FY2019 force level assumes an increase of 3,153 personnel (3.5%) from the FY2018 assumed level, all of which is assumed for in-theater support. (For analysis of troop level and budget trends, see the section, " Trends in OCO Funding and Troop Levels ," earlier in this report.) As previously discussed, DOD acknowledges "OCO funding has not declined at the same rate as the in-country troop strength … due to the fixed, and often inelastic, costs of infrastructure, support requirements, and in-theater presence to support contingency operations." The departments lists the following as OCO cost drivers: In-theater support, including infrastructure costs like command, control, communications, computers, and intelligence (C4I) and base operations for U.S. Central Command (CENTCOM) locations; Persistent demand for combat support such as intelligence, surveillance, and reconnaissance (ISR) assets used to enhance force protection; Equipment reset, which lags troop level changes and procurement of contingency-focused assets like munitions, unmanned aerial vehicles and force protection capabilities that may not be linked directly to in-country operations; and International programs and deterrence activities, which are linked to U.S. engagement in contingency operations and support U.S. interests but are not directly proportional to U.S. troop presence. DOD also breaks down the FY2019 OCO budget request by functional category (see Table 3 ). By this measure, the largest portion of OCO funding was $20 billion for in-theater support, followed by operations and force protection (including the incremental cost of military operations in Afghanistan, Iraq, Syria, and other countries), at $14.7 billion; and unspecified classified programs, at $9.9 billion. According to the Congressional Budget Office (CBO), approximately $47 billion (68%) of the FY2019 OCO budget request consists of enduring activities—that is, "those that would probably continue in the absence of overseas conflicts"—that could be funded in the DOD base budget. CBO associates enduring activities with the following DOD functional categories: in-theater support, classified programs, equipment reset and readiness, European Deterrence Initiative, security cooperation, and joint improvised-threat defeat. Executive Branch budget documents for FY2019 show differing projections for how much OCO would be apportioned over the Future Years Defense Program (also known as the FYDP, pronounced "fiddip," the five-year period from FY2019 through FY2023). For example, Table 1-11 in DOD's National Defense Budget Estimates for FY2019, citing OMB data, projects five-year OCO funding at $359 billion. However, Table 1-9 of the same document puts the figure at $149 billion after assuming a higher amount of OCO funding shifting into the base budget. According to OMB, the President's initial FY2019 budget request projected increasing caps on defense discretionary base budget authority by $84 billion (15%) to $660 billion in FY2020 and by $87 billion (15%) to $677 billion in FY2021. It also projected defense funding for Overseas Contingency Operations (OCO) totaling $73 billion in FY2020 and $66 billion in FY2021. Thus, projected defense discretionary funding would total $733 billion in FY2020 and $743 billion in FY2021. FY2019 DOD budget documents show the same defense discretionary topline for FY2020 and FY2021. But they list an "Outyears Placeholder for OCO" of $20 billion in fiscal years FY2020-FY2023, and an "OCO to Base" amount of $53 billion in FY2020 and $45.8 billion in each year from FY2021-FY2023. The documents do not break down what accounts or activities are included in these amounts. The emergence of any new contingencies or conflicts would likely change DOD assumptions about OCO needs. Congress has appropriated a total of $68.8 billion for DOD OCO funding in FY2019, including the following amounts: $67.9 billion in defense funds provided in the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019 ( P.L. 115-245 ), which Congress passed on September 26, 2018; and $921 million in defense funds provided in the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 ( P.L. 115-244 ), which Congress passed on September, 21, 2018. For the Department of State and USAID, as well as the Department of Homeland Security and U.S. Coast Guard, FY2019 OCO levels have not yet been determined. They remain at prorated FY2018 levels because of continuing resolutions (CR) to fund certain agencies through December 21, 2018. The FY2019 House and Senate SFOPS bills ( H.R. 6385 and S. 3108 , 115 th Congress) would have appropriated approximately $8 billion in OCO-designated funding for various priorities. The House committee-reported version of the Homeland Security appropriations bill ( H.R. 6776 , 115 th Congress) would not have appropriated any OCO/GWOT funding for the Coast Guard, while the Senate committee-reported version of the bill ( S. 3109 , 115 th Congress) would have appropriated $165 million for OCO/GWOT funding for the Coast Guard. Any decision by the 116 th Congress to change discretionary defense and nondefense spending limits that remain in effect for FY2020 and FY2021 under the Budget Control Act (BCA; P.L. 112-25 ) could impact future OCO funding levels. Lawmakers may consider the following questions: Will Congress keep the BCA as is and rely on OCO funding that is not subject to the caps to meet agency requirements? Will Congress repeal the BCA and use less OCO funding? Will Congress amend the BCA limits for future years and continue to use OCO funding, as it has in the past? Will Congress significantly reduce DOD and international affairs funding to stay within the BCA caps and not use OCO funding? In a November 2018 report, the National Defense Strategy Commission, a bipartisan panel created by Congress, issued recommendations related to OCO and the BCA. Recommendation No. 24 states, "Congress should eliminate the final two years of caps under the BCA." Recommendation 29 states, "To better prepare for major-power competition, Congress should gradually integrate OCO spending back into the base Pentagon budget. This also requires a dollar-for-dollar increase in the BCA spending caps, should they remain in force, so that this transfer does not result in an overall spending cut." Both House and Senate FY2019 committee-reported appropriations bills from the 115 th Congress included about $8 billion in OCO funding for State/USAID. It remains to be seen if the 116 th Congress will pass this OCO level as requested or extend the continuing resolution. Congress could enact legislation to authorize and appropriate a level of base and OCO spending to meet current or revised discretionary defense spending caps in any number of ways. In FY2019 budget documents from OMB and DOD, the Trump Administration projected increasing defense spending in FY2020 and FY2021 beyond the statutory limits of the Budget Control Act of 2011 ( P.L. 112-25 ), but by differing amounts based on differing OCO projections. These figures serve as possible scenarios or options for Congress to consider. According to OMB budget documents, the President's initial FY2019 budget request projected $733 billion in defense discretionary spending in FY2020, including a base budget of $660 billion (which assumes an $84 billion, or 15%, increase in the BCA defense cap—or repeal of the legislation altogether) and an OCO defense budget of $73 billion (see Figure 11 ). According to DOD budget documents, the President's revised FY2019 budget request projected $733 billion in defense discretionary spending in FY2020, including a base budget of $713 billion (which assumes a $137 billion, or 24%, increase in the BCA defense cap—what would be the largest increase to the BCA defense caps yet—or repeal of the legislation altogether) and an OCO budget of $20 billion. Alternatively, assuming no change in the cap and congressional support for the Administration's projected $733 billion topline in FY2020, Congress could keep the BCA defense cap unchanged at $576 billion and designate an additional $157 billion for OCO. According to OMB budget documents, the President's initial FY2019 budget request projected $743 billion in defense discretionary spending in FY2021, including a base budget of $677 billion (which assumes an $87 billion, or 15%, increase in the BCA defense cap—or repeal of the legislation altogether) and an OCO budget of $66 billion (see Figure 11 ). According to DOD budget documents, the President's revised FY2019 budget request projected $743 billion in defense discretionary spending in FY2021, including a base budget of $723 billion (which assumes a $133 billion, or 23%, increase in the BCA defense cap—or repeal of the legislation altogether) and an OCO budget of $20 billion. Alternatively, assuming no change in the cap and congressional support for the Administration's projected $743 billion topline in FY2020, Congress could keep the BCA defense cap unchanged at $590 billion and designate an additional $153 billion for OCO. As previously discussed, these figures would change with different toplines for the national defense budget function (050). Former Defense Secretary Jim Mattis and the National Defense Strategy Commission have recommended that Congress increase the defense budget between 3% and 5% a year above inflation ("real growth") to meet U.S. strategic goals. President Donald Trump has said the discretionary defense spending request would total $700 billion in FY2020, a decrease of 2% in nominal terms from FY2019. Trump said, "We know what the budget—the new budget is for the Defense Department. It will probably be $700 billion." However, some media outlets have since reported that the President intends to request a discretionary defense budget of $750 billion in FY2020. Senator James Inhofe, chairman of the Senate Armed Services Committee, and Representative Mac Thornberry, ranking member of the House Armed Services Committees in the 116 th Congress, have argued, "Any cut in the defense budget would be a senseless step backward." Thornberry has also said transferring recurring OCO costs into the regular budget "makes sense … it makes for more predictable budgeting, but it's all about what happens on the topline." Representative Adam Smith, chairman of the House Armed Services Committee in the 116 th Congress, has said of the defense budget: "I think the number is too high, and it's certainly not going to be there in the future … We've got a debt, we've got a deficit, we've got infrastructure problems, we've got healthcare, education—there's a whole lot that is necessary to make our country safe, secure, and prosperous." Acting Defense Secretary Patrick Shanahan has talked about a flat topline for national defense: "When you look at the $700 billion, it's not just for one year drop down, [or] a phase, it's a drop and then held constant" over the FYDP. Under Secretary of Defense (Comptroller)/Chief Financial Officer David Norquist, who is also performing the duties of the Deputy Secretary of Defense, at one time was reportedly preparing two budgets for FY2020—one assuming $733 billion for national defense and another assuming $700 billion. An analyst has noted "returning enduring OCO costs to the base budget, particularly a vast majority of those enduring costs over a short period as DOD has outlined, could significantly complicate an agreement between congressional Democrats and Republicans to increase both the defense and nondefense BCA budget caps for FY2020 and FY2021." As analyst noted, "OCO has become an even less-defined pot of money … Congress needs to properly question the DOD budget planners on the future of OCO." In a January 2017 report, GAO concluded, "Without a reliable estimate of DOD's enduring OCO costs, decision makers will not have a complete picture of the department's future funding needs or be able to make informed choices and trade-offs in budget formulation and decision making." The department states it has not fully estimated those costs in part because of the BCA. In a response to GAO, DOD wrote, "Developing reliable estimates of enduring OCO costs is an important first step to any future effort to transition enduring OCO costs to the base budget. In the context of such an effort, the Department would consider developing and reporting formal estimates of those costs. However, until there is sufficient relief from the budgetary caps established in the Budget Control Act of 2011, the Department will need OCO to finance counterterrorism operations, in particular [OFS] and [OIR]." In an October 2018 report, the Congressional Budget Office estimated OCO funding for DOD enduring activities—that is, those that would probably continue in the absence of overseas conflicts—totaled more than $50 billion a year (in 2019 dollars) from 2006 to 2018—and are projected to total about $47 billion a year starting in FY2020. This figure appears to be consistent with projections published by DOD. According to the department's FY2019 budget documents, DOD projected $53 billion for "OCO to Base" in FY2020 and $45.8 billion for "OCO to Base" for FY2021 through FY2023. Some analysts have concluded: Uncertainty created by current reliance on OCO, particularly to fund base budget needs, could be detrimental to national security on three levels: (a) by undermining budget controls and contributing thereby to larger deficits, (b) by generating insecurity in the defense workforce and in defense suppliers, and (c) by creating long-term uncertainty in defense planning. The alternative, transitioning longer-term OCO expenses to the base budget, could be achieved through a combination of increased budget caps, targeted cuts in inefficient Defense programs, and increased revenues. For example, a potential enduring activity in the OCO budget is the European Deterrence Initiative (EDI). It was previously known as the European Reassurance Initiative (ERI), an effort that began in June 2014 to increase the number of U.S. military personnel and prepositioned equipment in Central and Eastern Europe intended in part to reassure NATO allies after Russia's military seized Crimea. As some analysts have noted, "Because it is in the OCO part of the budget request, EDI funding does not include a projection for how much funding will be allocated in future years, which can create uncertainty in the minds of allies and adversaries alike about the U.S. military's commitment to the program." On the other hand, some contend that it is precisely EDI's flexibility that allows the commander of European Command to quickly respond to changing security and posture needs in Europe, and ensure that monies intended for European deterrence will not be redirected to other DOD priorities. In its November 2018 report, the National Defense Strategy Commission quoted the late military strategist Bernard Brodie, who wrote "strategy wears a dollar sign." The panel concluded that relying on OCO funding to increase the defense budget "is not the way to provide adequate and stable resources" for the type of great power competition outlined in the Secretary of Defense's 2018 National Defense Strategy (NDS), which calls for the United States to bolster its competitive military advantage relative to threats posed by China and Russia: Because of budgetary constraints imposed by the BCA, lawmakers and the Department of Defense have increasingly relied upon the overseas contingency operations (OCO) fund to pay for warfighting operations in the greater Middle East, as well as other activities and initiatives. Yet this approach to resourcing has produced problems and distortions of its own. For one thing, the amount of money devoted to OCO since the BCA was enacted no longer corresponds to warfighting operations in the greater Middle East. Furthermore, such operations are no longer a top priority as articulated in the NDS. Finally, reorienting the military toward high-end competition and conflict will require new capabilities beyond the current program of record. OCO is not the way to provide adequate and stable resources for such a long-term endeavor, given its lack of predictability and the limitations on what OCO funds can be used to buy." Appendix A. Statutes, Guidance, and Regulations The designation of funding as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism (OCO/GWOT) is governed by several statues as well as Office of Management and Budget (OMB) guidance and the Department of Defense (DOD) Financial Management Regulation (FMR). The Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985 BBEDCA, as amended, includes the statutory definitions of emergency and unanticipated as they relate to budget enforcement through sequestration. The act also allows for appropriations to be designated by Congress and the President as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism . Such appropriations are effectively exempt from the statutory discretionary spending limits. Title 10, United States Code—Armed Forces 10 U.S.C. 101—Definitions Section 101 provides definitions of terms applicable to Title 10. While it does not define overseas contingency operations, it does include a definition of a contingency operations . Administration and Internal Guidance In addition to statutory requirements, the DOD and the Department of State are subject to guidance on OCO spending from the Administration. In October 2006 , under the Bush Administration, then-Deputy Secretary of Defense Gordon England directed the services to break with long-standing DOD regulatory policies and expand their request for supplemental funding to reflect incremental costs related to the "longer war on terror." There was no specific definition for the "longer war on terror," now one of the core missions of the DOD. In February 2009, at the beginning of the Obama Administration, the Office of Management and Budget (OMB) issued updated budget guidance that required DOD to move some OCO costs back into the base budget. However, within six months of issuing the new criteria, officials waived restrictions related to pay and that would have prohibited end-strength growth. In a letter from OMB to the then-Under Secretary of Defense (Comptroller) Robert Hale, the agency characterized its 2009 criteria as "very successful" for delineating base and OCO spending but stated, "This update clarifies language, eliminates areas of confusion and provides guidance for areas previously unanticipated." GAO subsequently reported that the revised guidance significantly changed the criteria used to build the fiscal year 2010 OCO funding request by: specifying stricter definitions for repair and procurement of equipment; limiting applicability of OCO funds for RDT&E; excluding pay and allowances for end-strength above the level requested in the budget; excluding enduring family support initiatives; and excluding base realignment and closures (BRAC) amounts. OMB again revised its guidance in September 2010 following a number of GAO reports that had concluded DOD reporting on OCO costs was of "questionable reliability," due in part to imprecisely defined financial management regulations related to OCO spending. (as of September 9, 2010) Source: Letter from Steven M. Kosiak, Associate Director for Defense and Foreign Affairs, OMB, to Robert Hale, Under Secretary of Defense, Comptroller, "Revised War Funding Criteria," September 9, 2010. DOD Financial Management Regulations DOD incorporated the September 2010 OMB criteria for war costs into the Financial Management Regulation. Table 1 includes the general cost categories DOD uses in accounting for costs of contingency operations. Appendix B. Transfer Authorities, Special Purpose Accounts In addition to the supplemental appropriations and emergency or OCO/GWOT designation, the Department of Defense and the Department of State also have the authority to shift funds from one budget account to another in response to operational needs. For DOD, these transfers (sometimes called reprogramings ) are statutorily authorized by 10 U.S.C. 2214—Transfer of funds: procedures and limitations. This authority allows the Secretary of Defense to reallocate funds for higher priority items, based on unforeseen military requirements, after receiving written approval from the four congressional defense committees. DOD may also reprogram funds within an account from one activity to another, as long as the general purpose for the use of those funds remains unchanged. Specific limits to transfer or reprogramming authorities have also been added to these general authorities through provisions in annual defense authorization and appropriation acts. The FY2019 defense appropriations bill sets the base budget transfer cap at $4 billion and the OCO transfer cap at $2 billion. The Department of State's OCO transfer authority has been provided in appropriations acts and has specifically authorized the Administration to transfer OCO funds only to other OCO funds within Title VIII SFOPS appropriations, not between OCO and base accounts. The transfer authority is capped, specified by account, and requires regular congressional notification procedures. Overseas Contingency Operations Transfer Fund (OCOTF) The OCOTF was established for DOD in FY1997 as a no year transfer account (meaning amounts are available until expended) in order to provide additional flexibility to meet operational requirements. Transfers from the OCOTF are processed using existing reprogramming procedures. A quarterly report is submitted to the congressional oversight committees, documenting all transfers from the OCOTF to DOD components base budget accounts. Beginning in FY2002, funds to support Southwest Asia, Kosovo, and Bosnia contingency requirements were appropriated directly to DOD components' Operation and Maintenance (O&M) and Military Personnel accounts rather than to the OCOTF for later disbursement. FY2014 was the last year the Administration requested a direct appropriation to the OCOTF. Contingency Operations Funded in the DOD Base Budget As first mandated by section 8091 of the Department of Defense Appropriations Act, 2008 ( P.L. 110-116 ), Congress has required DOD to provide separate annual budget justification documents detailing the costs of U.S. armed forces' participation in all named contingency operations where the total cost of the operation exceeds $100 million or is staffed by more than 1,000 U.S. military personnel. Funding for certain DOD contingency operations has been moved to the base budget request, and is no longer designated as emergency or OCO/GWOT requirements. This movement of funding from the OCO request to the base budget request typically occurs as the operational activities of an enduring contingency operation evolve over time and DOD determines that certain elements of the associated military operations have become stable enough to be planned, financed, and executed within the base budget. For example, funding for Operation Noble Eagle, which provides fighter aircraft on 24/7 alert at several U.S. military bases, was moved from the GWOT request to the base budget request in 2005. Contingency operations and other activities funded wholly or in part through DOD's base budget have included: NATO Operations in the Balkans . The U.S. Army and U.S. Air Force provide support to the North Atlantic Treaty Organization-led operations in the Balkans region. Most U.S. forces are deployed to Kosovo in support of the NATO-led Kosovo Force (KFOR). A small number of U.S. personnel are deployed to the NATO headquarters in Sarajevo in Bosnia and Herzegovina; Joint Task Force - Bravo . U.S. forces support this task force, which operates from Soto Cano Air Base in Honduras and supports joint, combined, and interagency exercises and operations in Central America to counter the influence of transnational organized crime; carry out humanitarian assistance and disaster relief; and build military capacity with regional partners and allied nations to promote regional cooperation and security; Operation Juniper Shield. Previously known as Operation Enduring Freedom-Trans Sahara (OEF-TS), this operation supports efforts to defeat violent extremist organizations in East Africa. This operation also provides military-to-military engagement with partner African countries, as well as readiness for crisis response and evacuation of U.S. military, diplomatic, and civilian personnel; Operation Noble Eagle . This operation funds the continuing efforts to defend the United States from airborne attacks, maintain the sovereignty of the United States airspace, and defend critical U.S. facilities from potentially hostile threats or unconventional attacks; Operation Enduring Freedom- Horn of Africa . This operation was established to support efforts to defeat violent extremist organizations in East Africa; provide military-to-military engagement with partner African countries, as well as readiness for crisis response and evacuation of U.S. military, diplomatic, and civilian personnel throughout East Africa; Operation Enduring Freedom- Caribbean and Central America . A U.S. regional military operation initiated in 2008, under the operational control of Special Operations Command-South, this operation was established to focus on counterterrorism to support DOD's overall military objectives and the larger fight against terrorism. Operation Observant Compass . This operation was established to support the deployment of approximately 100 U.S. military personnel assisting the Ugandan People's Defense Force and neighboring partner African countries in countering the Lord's Resistance Army operations. Operation Spartan Shield. This operation was established to support ongoing U.S. Central Command missions. Other Congressionally Authorized Funds or Programs Through the OCO authorization and appropriation process, Congress has created numerous funds and programs that are designed to finance specific overseas contingency operations-related activities that do not fit into traditional budgetary accounts. Many of these funds and programs are supplied with amounts that are available until expended—however, authorization for the specified fund or program has an expiration date, thereby requiring further congressional action for reauthorization of affected funds or programs. Congress has also provided increased transfer authority to provide greater flexibility for U.S. government activities in situations that are typically unpredictable. Examples of these types of congressionally authorized OCO programs or funds have included: Afghan istan Security Forces Fund (ASFF) and Counter-ISIS Train and Equip Fund (CTEF) . These funds were established to provide funding and support for the training, equipping, and expansion of selected military and security forces in support of U.S. objectives; Counterterrorism Partnership s Fund . This fund was established to provide funding and support to partner nations engaged in counterterrorism and crisis response activities; Command er's Emergency Response Program. This program was established to support infrastructure improvements, such as road repair and construction and enable military commanders on the ground to respond to urgent humanitarian relief and reconstruction needs by undertaking activities that will immediately aid local populations and assist U.S. forces in maintaining security gains; Joint Improvised Explosive Device (IEDs) Defeat Fund . This fund was established to coordinate and focus all counter-IED efforts, including ongoing research and development, throughout DOD. Due to the enduring nature of the threat, DOD began moving associated funding to the base budget in FY2010; Mine Resistant Ambush Protected Vehicle (MRAP) Fund . This fund was intended to expedite the procurement and deployment of MRAPs to Iraq and Afghanistan; European Deterrence Initiative (EDI) . Initially the European Reassurance Initiative (ERI), this effort was established to provide funding and support to NATO allies and partners to "reassure allies of the U.S. commitment to their security and territorial integrity as members of the NATO Alliance, provide near-term flexibility and responsiveness to the evolving concerns of our allies and partners in Europe, especially Central and Eastern Europe, and help increase the capability and readiness of U.S. allies and partners;" Global Security Contingency Fund . This fund was established to provide funding for the Department of State and the Department of Defense "to facilitate an interagency approach to confronting security challenges;" Complex Crise s Fund . This fund was established to provide funding through the State Department and USAID "to help prevent crises and promote recovery in post-conflict situations during unforeseen political, social, or economic challenges that threaten regional security;" Migration and Refugee Assistance Fund . This fund was established to provide funding to respond to refugee crises in Africa, the Near East, South and Central Asia, and Europe and Eurasia; and Ukraine Security Assistance Initiative . This initiative was established to provide assistance, including training, equipment, lethal weapons, of a defensive nature; logistics support; supplies and services; sustainment; and intelligence support to the military and national security forces of Ukraine. This is an update to a report originally co-authored by [author name scrubbed], former CRS Specialist in Defense Readiness and Infrastructure. It references research previously compiled by [author name scrubbed], former CRS Specialist in U.S. Defense Policy and Budget; Christopher Mann, Analyst in Defense Policy and Trade; [author name scrubbed], Analyst in U.S. Defense Acquisition Policy; [author name scrubbed], CRS Specialist on Congress and the Legislative Process; and [author name scrubbed], CRS Analyst in Public Finance. [author name scrubbed], Research Assistant, helped compile the graphics.
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Congressional interest in Overseas Contingency Operation (OCO) funding has continued as Members debate ways of funding priorities without breaching discretionary spending limits set in law. Since the terrorist attacks of September 11, 2001, Congress has appropriated approximately $2 trillion in discretionary budget authority designated as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism (OCO/GWOT) in support of the broad U.S. government response to the 9/11 attacks and for other related international affairs activities. This figure amounts to approximately 9.4% of total discretionary spending during this period. Congress has used supplemental appropriation acts or designated funding for emergency requirements or OCO/GWOT—or both—in statute. These funds are not subject to limits on discretionary spending in congressional budget resolutions or to the statutory discretionary spending limits established by the Budget Control Act of 2011 (BCA; P.L. 112-125). The Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177) allows emergency funding to be excluded from budget control limits. The BCA added the OCO/GWOT designation to the BBEDCA exemption, thereby providing Congress and the President with an alternate way to exclude funding from the BCA spending limits. While there is no overall statutory limit on the amount of emergency or OCO/GWOT spending, both Congress and the President have fundamental roles in determining how much of the spending to provide each fiscal year. Congress must designate any such funding in statute on an account-by-account basis. The President is also required to designate it as such after it is appropriated to be available for expenditure. Debate over what should constitute OCO/GWOT or emergency activities and expenses has shifted over time, reflecting differing viewpoints about the extent, nature, and duration of U.S. military operations in Afghanistan, Iraq, Syria, and elsewhere. Funding designated for OCO/GWOT has also been used to fund base-budget requirements of the DOD and State Department and to prevent or respond to crises abroad, including armed conflict, as well as human-caused and natural disasters. Some defense officials and policymakers argue OCO funding allows for flexible response to contingencies, and provides a "safety valve" to the spending caps and threat of sequestration—the automatic cancellation of budget authority largely through across-the-board reductions of nonexempt programs and activities—under the BCA. Critics, however, have described OCO/GWOT as a loophole or "gimmick"—morphing from an account for replacing combat losses of equipment, resupplying expended munitions, and transporting troops through war zones, to a "slush fund" for activities unrelated to contingency operations. Congress appropriated approximately $103 billion for OCO in FY2017 (8.5% of all discretionary appropriations), $78 billion for OCO in FY2018 (5.5% of all discretionary appropriations), and $68.8 billion for OCO so far in FY2019. Discretionary appropriations for FY2019 are not yet final; a continuing resolution expired December 21, 2018. Following passage of the Bipartisan Budget Act of 2018 (P.L. 115-123), which raised discretionary budget caps for defense and foreign affairs agencies in FY2018 and FY2019, the Administration proposed shifting some OCO funding into the base, or regular, budget. Although Congress has generally not followed Administration requests for reduced funding for foreign affairs and domestic activities and has increased funding for defense, the President has asked cabinet secretaries to propose spending cuts of 5% in FY2020. Such proposals, if requested in a budget submission, may create difficult choices for Congress in FY2020 and FY2021—the final two years of the BCA discretionary spending limits. Congress's decisions on OCO/GWOT designations will affect how much agency funding is available for military operations and foreign affairs activities overseas, how much is subject to the BCA caps, and how much is incorporated into regular budgets and long-term budget projections.
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The Small Business Administration (SBA) administers several programs to support small business owners and prospective entrepreneurs. For example, it provides education programs to assist with business formation and expansion; loan guaranty programs to enhance small business owners' access to capital; and programs to increase small business opportunities in federal contracting, including oversight of the service-disabled veteran-owned small business federal procurement goaling program. The SBA also provides direct loans for owners of businesses of all sizes, homeowners, and renters to assist their recovery from natural disasters. The Military Reservist Economic Injury Disaster Loan (MREIDL) program is also of interest to veterans. It provides direct loans of up to $2 million to small business owners who are not able to obtain credit elsewhere meet ordinary and necessary operating expenses that they could have met but are not able to because an essential employee has been called up to active duty in his or her role as a military reservist or member of the National Guard due to a period of military conflict. The SBA provides management and technical assistance to more than 100,000 veterans each year through its various training partners (e.g., Small Business Development Centers, Women's Business Centers, SCORE [formerly the Service Corps of Retired Executives], and Veterans Business Outreach Centers [VBOCs]). In addition, the SBA's Office of Veterans Business Development (OVBD) administers several programs to assist veteran-owned small businesses. The SBA's OVBD received an appropriation of $12.7 million for FY2018. The SBA has always assisted veteran small business owners and aspiring veteran entrepreneurs. In recent years, they have focused increased attention on assisting veterans transition from the military to the civilian labor force. For example, the SBA's OVBD, in partnership with Syracuse University, launched the Operation Boots to Business: From Service to Startup initiative for transitioning servicemembers in July 2012. The program consists of a two-day introductory course on entrepreneurship followed by an eight-week, online course to prepare servicemenmbers and military spouses "for post-service career success as business owners." Congress provided the SBA's OVBD an additional $7 million in FY2014 to expand the Boots to Business initiative "nationwide to the 250,000 yearly transitioning servicemembers in all branches of the military." The initiative's two-day Introduction to Entrepreneurship course is currently offered at 213 military institutions worldwide and is "a standard portion of the curricula offered at the revised Transition Assistance Program (TAP) to servicemembers." TAP is administered by the Department of Defense (DOD) in cooperation with the Department of Labor (DOL), Department of Veterans Affairs (VA), Department of Education (DOE), Department of Homeland Security (DHS), Office of Personnel Management (OPM), and the SBA. Congress has approved additional appropriations to continue the initiative, and it was expanded in 2014 to include veterans of all eras, active duty servicemembers (including National Guard and Reserves), and their partner or spouse via the Boots to Business: Reboot initiative. In FY2017, 17,320 servicemembers participated in the Boots to Business program. During the 114 th Congress, legislation was introduced and reported favorably by the Senate Committee on Small Business and Entrepreneurship to provide the Boots to Business initiative statutory authorization ( S. 1866 , the Veterans Small Business Ownership Improvements Act of 2015). Similar legislation was introduced during the 115 th Congress ( S. 121 , the Veterans Small Business Ownership Improvements Act, and H.R. 5193 , the Veteran Entrepreneurship Training Act of 2018). To date, nearly 70,000 servicemembers have participated in the initiative. The expansion of federal employment training programs targeted at specific populations, such as women and veterans, has led some Members and organizations to ask if these programs should be consolidated. In their view, eliminating program duplication among federal business assistance programs across federal agencies, and within the SBA, would lower costs and improve services. Others argue that keeping these business assistance programs separate enables them to offer services that match the unique needs of underserved populations, such as veterans. Instead of consolidating these programs, their focus is on improving communication and cooperation among the federal agencies providing assistance to entrepreneurs. This report examines the economic circumstances of veteran-owned businesses drawn from the Bureau of the Census's 2012 Survey of Business Owners (SBO). It also provides a brief overview of veterans' employment experiences, comparing unemployment and labor force participation rates for veterans, veterans who have left the military since September 2001, and nonveterans. The report also describes employment assistance programs offered by several federal agencies to assist veterans transitioning from the military to the civilian labor force and examines, in greater detail, the SBA's veteran business development programs, the SBA's efforts to enhance veterans' access to capital, and the SBA's veteran contracting programs. It also discusses the SBA's Military Reservist Economic Injury Disaster Loan program and P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, which authorized and made permanent the SBA's recent practice of waiving the SBAExpress loan program's one time, up-front loan guarantee fee for veterans (and their spouse). From 1972 to 2012, the U.S. Bureau of the Census's SBO was sent every five years, for years ending in "2" and "7," to a stratified random sample of nonfarm businesses in the United States that file Internal Revenue Service tax forms as individual proprietorships, partnerships, or any type of corporation, and with receipts of $1,000 or more. It asked for information about the cha racteristics of the businesses and their owners. About 66% of the 1.75 million businesses that received the 2012 SBO responded. The SBO provided "the only comprehensive, regularly collected source of information on selected economic and demographic characteristics for businesses and business owners by gender, ethnicity, race, and veteran status." The SBO provided estimates of the number of employer and nonemployer firms and their sales and receipts, annual payroll, and employment. Data aggregates were provided by gender, ethnicity, race, and veteran status for the United States by North American Industry Classification System (NAICS) classification; the kind of business; and state, metropolitan and micropolitan statistical area, and county. This information was combined with data collected through the Census Bureau's main economic census and administrative records to provide a variety of searchable data products on Census's website, https://www.census.gov/programs-surveys/sbo.html , including the most detailed economic information available on veterans and veteran-owned firms. The Census Bureau has discontinued the SBO and is currently collecting data on business receipts, payroll, and employment by demographic characteristics, such as gender, ethnicity, race, and veteran status through its new, annual American Business Survey (ABS). The first set of data from the ABS is scheduled to be released in December 2019. Although now somewhat dated, the 2012 SBO provides the most detailed economic information available on veterans and veteran-owned firms. The Bureau of the Census estimates that in 2012 about 9.2% of nonfarm firms in the United States (2.54 million of 27.62 million) were owned by veterans. Four states had more than 100,000 veteran-owned firms: California (254,873), Texas (215,217), Florida (187,074), and New York (138,670). Of the 2.54 million veteran-owned, nonfarm firms in 2012, 82.3% (2.09 million) had no paid employees and 17.7% (450,807) had paid employees. This ratio is similar to comparable national figures of 80.4% (22.20 million) with no paid employees and 19.6% (5.42 million) with paid employees. 84.3% (2.14 million) were owned by a male, 15.1% were owned by a female (384,549), and 0.6% (14,035) were owned equally by a male and a female. Veteran-owned firms were more likely than other firms in 2012 to be owned by a male. The comparable national figures are 54.3% (14.99 million) were owned by a male, 36.0% (9.93 million) were owned by a female, and 9.0% (2.50 million) were owned equally by a male and a female. 85.1% (2.16 million) were owned by a Caucasian, 10.7% (270,702) were owned by an African American, 2.1% (52,933) were owned by an Asian, 1.3% (34,174) were owned by an American Indian or Alaska Indian, 0.3% (7,011) were owned by a native Hawaiian or other Pacific Islander, and 2.2% (56,091) were owned by "some other race." Veteran-owned firms were somewhat more likely than other firms in 2012 to be owned by a Caucasian and somewhat less likely to be owned by an Asian. The comparable national figures for 2012 are 78.7% (21.74 million) were owned by a Caucasian, 9.4% (2.59 million) were owned by an African American, 7.0% (1.94 million) were owned by an Asian, 1.0% (274,238) were owned by an American Indian or Alaska Indian, 0.2% (55,077) were owned by a native Hawaiian or other Pacific Islander, and 4.3% (1.18 million) were owned by "some other race." 3.3% (76,250 of the 2,299,501 reporting) were owned by an individual under the age of 35, 22.6% (520,472) were owned by an individual aged 35 to 54, and 74.5% (1,712,779) were owned by an individual aged 55 or older. Veteran-owned firms were more likely than other firms in 2012 to be owned by an individual aged 55 or older. The comparable national figures (minus veterans) for 2012 are 14.7% (2,943,446 of the 19,990,309 reporting) of nonfarm firms were owned by an individual under the age of 35; 48.1% (9,613,854) were owned by an individual aged 35 to 54; and 37.2% (7,433,009) were owned by an individual aged 55 or older. 7.3% (167,052 of the 2,292,035 reporting) were owned by an individual who reported that he or she had a service-connected disability. In addition, 99.8% of veteran-owned employer firms (441,799) had fewer than 500 employees and 0.2% (686) had at least 500 employees. This ratio is similar to comparable national figures for 2012, according to which 99.7% (5.41 million) had fewer than 500 employees and 0.3% (17,724) had at least 500 employees. In 2012, veteran-owned firms employed more than 5.5 million persons, reported a total payroll of $220.8 billion, and generated more than $1.47 trillion in total sales/receipts. Veteran-owned employer firms employed 5.5 million persons (about 4.8% of total U.S. employment); reported a total payroll of $220.8 billion (about 4.2% of total U.S. payroll); generated $1.375 trillion in total sales/receipts (about 4.2% of total U.S. receipts); and had average sales/receipts of $3.1 million. Veteran-owned nonemployer firms generated 6.4% ($94.5 billion) of the total sales/receipts generated by veteran-owned firms; and had average sales/receipts of $45,198. The comparable national figures for sales/receipts in 2012 were $6.0 million for employer firms and $47,679 for nonemployer firms. As shown in Table 1 , in 2012, veterans most frequently used personal or family savings to start or acquire a business (886,471 veterans, or 59.4% of respondents), followed by a personal or business credit card (148,856 veterans, or 10.0% of respondents), a business loan from a bank or financial institution (116,045 veterans, or 7.8% of respondents), and personal or family assets other than the owner's savings (92,748 veterans, or 6.2% of respondents). As shown in Table 2 , the source of capital most frequently used by veterans to expand or make capital improvements to an existing business in 2012 was personal or family savings (313,296 veterans, or 20.8% of respondents). The next most frequently used source of capital to expand or make capital improvements to an existing business was a personal or business credit card (114,815 veterans, or 7.6% of respondents), followed by business profits or assets (82,182 veterans, or 5.5% of respondents), and a government-guaranteed business loan from a bank or financial institution (64,499 veterans, or 4.3% of respondents). The Department of Labor's Bureau of Labor Statistics (BLS) provides monthly updates of the employment status of the nation's veterans. The BLS reports that as of January 2019, there were about 19.0 million veterans. There were 9.4 million veterans in the civilian labor force (i.e., they were either employed or unemployed and available for work, except for temporary illness, and had made specific efforts to find employment sometime during the four-week period ending with the reference week). Of those veterans in the civilian labor force, about 9.0 million were employed and about 344,000 were unemployed. In recent years, the unemployment rate among veterans as a whole has generally been lower than the unemployment rate for nonveterans 18 years and older. However, veterans who have left the military since September 2001 have experienced higher unemployment than other veterans and, in some years, higher than nonveterans as well. In January 2019, the unemployment rate for nonveterans 18 years and older was 4.3%, which was higher than for veterans as a whole (3.7%), for veterans who left the military prior to September 2001 (3.3%), and for veterans who left the military since September 2001 (4.2%). Veterans who have left the military since September 2001 also have a higher labor force participation rate (78.0%) than other veterans (40.0%) and nonveterans aged 18 and older (62.7%). The higher labor force participation rate for veterans who left the military since September 2001 was not wholly unexpected. They entered the civilian workforce more recently and have had less time to develop a reason (e.g., health issue, family responsibility, discouragement, retirement) to withdraw from the civilian workforce than other veterans and nonveterans aged 18 and older. The lower labor force participation rate for other veterans was also not wholly unexpected. They entered the civilian workforce earlier and have had more time to develop a reason to withdraw from the civilian workforce than veterans who left the military since September 2001 and nonveterans aged 18 and older. Several federal agencies, including the SBA, sponsor employment and business development programs to assist veterans in their transition from the military into the civilian labor force. As discussed, the expansion of federal employment and business development training programs targeted at specific populations, such as women and veterans, has led some Members and organizations to ask if these programs should be consolidated. Others question if the level of communication and coordination among federal agencies administering these programs has been sufficient to ensure the programs are being administered in the most efficient and effective manner. In an effort to assist veteran entrepreneurs, the SBA has either provided or supported management and technical assistance training for veteran-owned small businesses since its formation as an agency. The SBA provides management and technical assistance to more than 100,000 veterans each year through its various training partners (e.g., Small Business Development Centers, Women's Business Centers, SCORE [formerly the Service Corps of Retired Executives], and Veterans Business Outreach Centers [VBOCs]). In addition, the SBA's OVBD administers several programs to assist veteran-owned businesses, including the Entrepreneurship Bootcamp for Veterans with Disabilities Consortium of Universities, which provides "experiential training in entrepreneurship and small business management to post-9/11 veterans with disabilities" at eight universities; the Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE) program, administered through a cooperative agreement with Syracuse University, which offers women veterans a 15-day, online course focused on entrepreneurship skills and the "language of business," followed by a 3-day conference (offered twice a year at varying locations) in which participants "are exposed to successful entrepreneurs and CEOs of Fortune 500 companies and leaders in government" and participate in courses on business planning, marketing, accounting and finance, operations and production, human resources, and work-life balance; the Operation Endure and Grow Program, administered through a cooperative agreement with Syracuse University, which offers an eight-week online training program "focused on the fundamentals of launching and/or growing a small business" and is available to National Guard members and reservists and their family members; the Boots to Business initiative, which is "an elective track within the Department of Defense's revised Training Assistance Program called Transition Goals, Plans, Success (Transition GPS) and has three parts: the Entrepreneurship Track Overview —a 10-minute introductory video shown during the mandatory five-day Transition GPS course which introduces entrepreneurship as a post-service career option; Introduction to Entrepreneurship —a two-day classroom course on entrepreneurship and business fundamentals offered as one of the three Transition GPS elective tracks; and Foundations of Entrepreneurship —an eight-week, instructor-led online course that offers in-depth instruction on the elements of a business plan and tips and techniques for starting a business"; the Boots to Business: Reboot initiative, which expanded the Boots to Business initiative in 2014 to include veterans of all eras, active duty servicemembers (including National Guard and Reserves), and their partner/spouse; the Veterans Institute for Procurement (VIP) program, which is designed to increase the ability of veteran-owned businesses to win government contracts by providing "an accelerator-like, in-residence educational training program for owners, principals, and executives of veteran-owned businesses, consisting of a three-day comprehensive certification program instructed by professional service experts, government officials, and agency representatives"; and the VBOC program, which provides veterans and their spouse management and technical assistance training at 22 locations, including assistance with the Boots to Business initiatives, the development and maintenance of a five-year business plan, and referrals to other SBA resource partners when appropriate for additional training or mentoring services. The SBA also continues to work closely with the Interagency Task Force for Veterans Small Business Development, which was established by executive order on April 26, 2010, held its first public meeting on October 15, 2010, and issued its first report on November 1, 2011, to identify "gaps in ensuring that transitioning military members who are interested in owning a small business get needed assistance and training." The task force's second report, issued on November 29, 2012, focused on progress made since the initial report. The task force continues to meet on a quarterly basis to foster communication and monitor agency progress in assisting transitioning servicemembers. The SBA's OVBD, which serves as the SBA's focal point for its veteran assistance programs, was created by P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999. The act addressed congressional concerns that the United States generally, and the SBA in particular, was not, at that time, doing enough to meet the needs of veteran entrepreneurs, especially service-disabled veteran entrepreneurs. At that time, several Members of Congress argued that "the needs of veterans have been diminished systematically at the SBA" as evidenced by the agency's elimination of direct loans, including direct loans to veterans, in 1995; and a decline in the SBA's "training and counseling for veterans … from 38,775 total counseling sessions for veterans in 1993 to 29,821 sessions in 1998." To address these concerns, the act authorized the establishment of the federally chartered National Veterans Business Development Corporation (known as the Veterans Corporation and reconstituted, without a federal charter, in 2012 as Veteranscorp.org). Its mission is to (1) expand the provision of and improve access to technical assistance regarding entrepreneurship for the Nation's veterans; and (2) to assist veterans, including service-disabled veterans, with the formation and expansion of small business concerns by working with and organizing public and private resources, including those of the Small Business Administration, the Department of Veterans Affairs, the Department of Labor, the Department of Commerce, the Department of Defense, the Service Corps of Retired Executives…, the Small Business Development Centers…, and the business development staffs of each department and agency of the United States. P.L. 106-50 reemphasized the SBA's responsibility "to reach out to and include veterans in its programs providing financial and technical assistance." It included veterans as a target group for the SBA's 7(a), 504 Certified Development Company (504/CDC), and Microloan lending programs. It also required the SBA to enter into a memorandum of understanding with SCORE to, among other things, establish "a program to coordinate counseling and training regarding entrepreneurship to veterans through the chapters of SCORE throughout the United States." In addition, it directed the SBA to enter into a memorandum of understanding with small business development centers, the VA, and the National Veterans Business Development Corporation "with respect to entrepreneurial assistance to veterans, including service-disabled veterans." The act specified that the following services were to be provided: (1) Conducting of studies and research, and the distribution of information generated by such studies and research, on the formation, management, financing, marketing, and operation of small business concerns by veterans. (2) Provision of training and counseling to veterans concerning the formation, management, financing, marketing, and operation of small business concerns. (3) Provision of management and technical assistance to the owners and operators of small business concerns regarding international markets, the promotion of exports, and the transfer of technology. (4) Provision of assistance and information to veterans regarding procurement opportunities with Federal, State, and local agencies, especially such agencies funded in whole or in part with Federal funds. (5) Establishment of an information clearinghouse to collect and distribute information, including by electronic means, on the assistance programs of Federal, State, and local governments, and of the private sector, including information on office locations, key personnel, telephone numbers, mail and electronic addresses, and contracting and subcontracting opportunities. (6) Provision of Internet or other distance learning academic instruction for veterans in business subjects, including accounting, marketing, and business fundamentals. (7) Compilation of a list of small business concerns owned and controlled by service-disabled veterans that provide products or services that could be procured by the United States and delivery of such list to each department and agency of the United States. Such list shall be delivered in hard copy and electronic form and shall include the name and address of each such small business concern and the products or services that it provides. The SBA's OVBD was established to address these statutory requirements by promoting "veterans' small business ownership by conducting comprehensive outreach, through program and policy development and implementation, ombudsman support, coordinated agency initiatives, and direct assistance to veterans, service-disabled veterans, reserve and National Guard members, and discharging active duty service members and their families." As mentioned previously, the OVBD provides, or supports third parties to provide, management and technical assistance training services to more than 100,000 veterans each year. These services are provided through funded SBA district office outreach; OVBD-developed and distributed materials; websites; partnering with DOD [Department of Defense], DOL [Department of Labor] and universities; agreements with regional veterans business outreach centers; direct guidance, training and assistance to Agency veteran customers; and through enhancements to intra-agency programs used by the military and veteran communities. The expansion of the SBA's veteran outreach efforts has led some Members and organizations to ask if the nation's veterans might be better served if some of the veteran employment and business development programs offered by federal agencies were consolidated. For example, as mentioned previously, DOD, in cooperation with several federal agencies, operates the recently revised Transition Assistance Program, Transition GPS, which provides employment information and training to exiting servicemembers to assist them in transitioning from the military into the civilian labor force. In addition, DOL's Jobs for Veterans State Grants program provides states funding for Disabled Veterans' Outreach Program specialists and Local Veterans' Employment Representatives to provide outreach and assistance to veterans, and their spouses, seeking employment. DOL also administers the Veterans Workforce Investment Program, which provides grants to fund programs operated by eligible state and local government workforce investment boards, state and local government agencies, and private nonprofit organizations to provide various services designed to assist veterans' transitions into the civilian labor force. The DOL-administered Homeless Veterans Reintegration Program provides grants to fund programs operated by eligible state and local government workforce investment boards, state and local government agencies, and private nonprofit organizations that provide various services designed to assist homeless veterans achieve meaningful employment and to aid in the development of a service delivery system to address problems facing homeless veterans. Advocates of consolidating veteran employment and business development programs argue that eliminating program duplication among federal agencies would result in lower costs and improved services. For example, H.R. 4072 , the Consolidating Veteran Employment Services for Improved Performance Act of 2012, which was introduced during the 112 th Congress and ordered to be reported by the House Committee on Veterans' Affairs on April 27, 2012, would have transferred several veteran employment training programs from the DOL to the VA. In addition, in 2011, 2012, 2013, 2014, and 2015, the House Committee on Small Business, in its "Views and Estimates" letter to the House Committee on the Budget, recommended that funding for the SBA's VBOCs be either eliminated or transferred to the Department of Veterans Affairs because, as it stated in 2012, "the SBA already provides significant assistance to veterans who are seeking to start or already operate small businesses. The VBOCs duplicate services already available from the SBA, other entrepreneurial development partners and programs available from the Department of Veterans Affairs." In 2014, the House Committee on Small Business also recommended that if additional funds were to be provided to VBOCs, those funds should come from the SBA's Boots to Business initiative. Advocates of consolidating federal veteran employment and business development programs cite U.S. Government Accountability Office (GAO) reports that have characterized the broader category of federal support for entrepreneurs, including veteran entrepreneurs, as fragmented and having overlapping missions. For example, in 2012, GAO identified 53 programs within the SBA and the Departments of Commerce, Housing and Urban Development, and Agriculture designed to support entrepreneurs, including 36 programs that provide entrepreneurs technical assistance, such as business training, counseling, and research and development support. GAO found that "the overlap among these programs raise[s] questions about whether a fragmented system is the most effective way to support entrepreneurs" and suggested agencies should "determine whether there are more efficient ways to continue to serve the unique needs of entrepreneurs, including consolidating programs." Instead of consolidating programs, some argue that improved communication and cooperation among the federal agencies providing entrepreneur support programs, and among the SBA's management and technical assistance training resource partners, would enhance program efficiencies while preserving the ability of these programs to offer services that match the unique needs of various underserved populations, such as veterans. For example, during the 111 th Congress, the House passed H.R. 2352 , the Job Creation Through Entrepreneurship Act of 2009, on May 20, 2009, by a vote of 406-15. The Senate did not take action on the bill. In its committee report accompanying the bill, the House Committee on Small Business concluded at that time that each ED [Entrepreneurial Development] program has a unique mandate and service delivery approach that is customized to its particular clients. However, as a network, the programs have established local connections and resources that benefit entrepreneurs within a region. Enhanced coordination among this network is critical to make the most of scarce resources available for small firms. It can also ensure that best practices are shared amongst providers that have similar goals but work within different contexts. The bill was designed to enhance oversight and coordination of the SBA's management and technical assistance training programs by requiring the SBA to coordinate these programs "with State and local economic development agencies and other federal agencies as appropriate" and to "report annually to Congress, in consultation with other federal departments and agencies as appropriate, on opportunities to foster coordination, limit duplication, and improve program delivery for federal entrepreneurial development activities." In a related development, as mentioned previously, the Obama Administration formed the Interagency Task Force for Veterans Small Business Development by executive order on April 26, 2010. The SBA's representative chairs the task force, which is composed of senior representatives from seven federal agencies and four representatives from veterans' organizations. One of the task force's goals is to improve "collaboration, integration and focus across federal agencies, key programs (e.g., the Transition Assistance Program), veterans' service organizations, states, and academia." On November 1, 2011, the task force issued 18 recommendations, including recommendations designed to increase and augment federal entrepreneurial training and technical assistance programs offered to veterans. For example, it recommended the development of a "standardized, national entrepreneurship training program specifically for veterans" that "could utilize expert local instructors, including academics and successful small business owners, to provide training in skills used to create and grow entrepreneurial ventures and small business. The national program could provide engaging training modules and workshops dedicated to the basics of launching a business." The task force also recommended the development of a web portal "that allows veterans to access entrepreneurship resources from across the government." Since then, the task force has met quarterly and its annual reports document its efforts to address the 18 recommendations. The SBA administers several loan guaranty programs, including the 7(a) and the 504/CDC programs, to encourage lenders to provide loans to small businesses "that might not otherwise obtain financing on reasonable terms and conditions." The SBA's 7(a) loan guaranty program is considered the agency's flagship loan guaranty program. Its name is derived from Section 7(a) of the Small Business Act of 1953 (P.L. 83-163, as amended), which authorizes the SBA to provide business loans to American small businesses. The 7(a) program provides SBA-approved lenders a guaranty of up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000, up to the program's maximum gross loan amount of $5 million (up to $3.75 million maximum guaranty). In FY2018, the average approved 7(a) loan amount was $420,401. Proceeds from 7(a) loans may be used to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. Specific uses include to acquire land (by purchase or lease); improve a site (e.g., grading, streets, parking lots, and landscaping); purchase, convert, expand, or renovate one or more existing buildings; construct one or more new buildings; acquire (by purchase or lease) and install fixed assets; purchase inventory, supplies, and raw materials; finance working capital; and refinance certain outstanding debts. The 7(a) program's loan maturity for working capital, machinery, and equipment (not to exceed the life of the equipment) is typically 5 years to 10 years, and the loan maturity for real estate is up to 25 years. Interest rates are negotiated between the borrower and lender but are subject to maximum rates. As shown in Table 3 , the number and amount of veteran 7(a) loan approvals have generally increased since FY2012. In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25.4 billion, including 3,084 loans to veterans (5.3%) totaling $969 million (3.8%). In FY2018, the average approved veteran 7(a) loan amount was $314,360. The SBA's 504/CDC loan guaranty program is administered through nonprofit certified development companies (CDCs). It provides long-term fixed rate financing for major fixed assets, such as land, buildings, equipment, and machinery. Of the total project costs, a third-party lender must provide at least 50% of the financing, the CDC provides up to 40% of the financing through a 100% SBA-guaranteed debenture, and the applicant provides at least 10% of the financing. The 504/CDC program's name is derived from Section 504 of the Small Business Investment Act of 1958 (P.L. 85-699, as amended), which provides the most recent authorization for the sale of 504/CDC debentures. In FY2018, the average approved 504/CDC loan amount was $806,324. As shown in Table 4 , in recent years, the amount of veteran 504/CDC loan approvals peaked in FY2012, declined in FY2013 and FY2014, increased in FY2015, FY2016, and FY2017, and declined somewhat in FY2018. In FY2018, the SBA approved 5,874 504/CDC loans totaling $4.75 billion, including 158 loans to veterans (2.7%) totaling $95 million (2.0%). In FY2018, the average approved veteran 504/CDC loan amount was $601,202. The SBA administers several 7(a) loan guaranty subprograms that offer streamlined and expedited loan procedures to encourage lenders to provide loans to specific groups of borrowers identified by the SBA as having difficulty accessing capital. In the past, the Patriot Express program (2007-2013) encouraged lenders to provide loans to veterans and their spouses. It provided loans of up to $500,000 (with a guaranty of up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000). The SBA considered the Patriot Express program a success, but some veterans' organizations expressed concern that many veterans, especially during and immediately following the Great Recession (December 2007 to June 2009), experienced difficulty finding lenders willing to provide them Patriot Express loans. In addition, GAO reported in September 2013 that with the exception of loans approved in 2007, Patriot Express loans defaulted at a higher rate than regular 7(a) loans and loans made under the SBAExpress program (a 7(a) loan guaranty subprogram offering streamlined borrower application and lender approval procedures). Over its history, the Patriot Express program disbursed 9,414 loans totaling more than $791 million. On January 1, 2014, the SBA implemented a new, streamlined application process for 7(a) loans of $350,000 or less. As part of an overall effort to streamline and simplify its loan application process, the SBA also eliminated several 7(a) subprograms, including the Patriot Express program. In anticipation of ending the Patriot Express program, the SBA announced on November 8, 2013, that it would waive the up-front, one-time loan guaranty fee for loans to a veteran or veteran's spouse under the SBAExpress program from January 1, 2014, through the end of FY2014 (called the Veterans Advantage Program). The SBA announced that this fee waiver was part "of SBA's broader efforts to make sure that veterans have the tools they need to start and grow a business." The Obama Administration continued this fee waiver for veterans through the end of FY2015. During the 113 th Congress, S. 2143 , the Veterans Entrepreneurship Act, would have authorized and made the Veterans Advantage Program's fee waiver permanent. P.L. 113-235 , the Consolidated and Further Continuing Appropriations Act, 2015, provided statutory authorization for the fee waiver for FY2015. During the 114 th Congress, P.L. 114-38 , the Veterans Entrepreneurship Act of 2015, authorized and made the SBA's practice of waiving the SBAExpress loan program's one time, up-front guaranty fee for veterans (and their spouse) permanent beginning on or after October 1, 2015, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero. The SBA has waived this fee every year since then. The SBAExpress program is designed to increase the availability of credit to small businesses by permitting lenders to use their existing documentation and procedures in return for receiving a reduced SBA guaranty on loans. It provides a 50% loan guaranty on loan amounts up to $350,000. In FY2018, the SBA approved 27,794 SBAExpress loans (46.1% of total 7(a) program loan approvals) totaling $1.98 billion (7.8% of total 7(a) program amount approvals). The SBA also waived the up-front, one-time loan guaranty fee for smaller 7(a) loans (including those to veterans) in FY2014, FY2015, FY2016, FY2017, and FY2018; and is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reduce the up-front one-time guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan in FY2019. In FY2015 and FY2016, the SBA also waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans exceeding $150,000. In FY2017, the SBA waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $500,000. In FY2018, the SBA waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $350,000. As mentioned previously, the SBA has indicated in both testimony at congressional hearings and in press releases that it viewed the Patriot Express program and its own overall effort to enhance veterans' access to capital as a success. For example, when the SBA announced its veterans' fee waiver for the SBAExpress program, it also announced that its lending to veteran-owned small businesses had nearly doubled since 2009 and that "in FY2013, SBA supported $1.86 billion in loans for 3,094 veteran-owned small businesses." Congressional testimony provided by various veteran service organizations provides a somewhat different perspective. The SBA's self-evaluation of its success in assisting veterans access capital has focused primarily on the agency's efforts to streamline the loan application approval process (e.g., minimizing paperwork requirements and reducing the time necessary for the SBA to review and approve applications submitted by local lenders) and aggregate lending amounts (e.g., the number and amount of loans approved). In contrast, veteran service organizations focus primarily on program outcomes, especially the likelihood of a veteran being approved for a SBA loan by a local lender. For example, a representative of the American Legion testified at a congressional hearing in 2010 that, at that time, being turned down for a SBA Patriot Express loan by a private lender "is probably the largest, most frequent complaint that we receive from our business owners." At that same congressional hearing, a representative of the Vietnam Veterans of America testified in response to that statement that "I would have to concur … in talking with some of the veterans with regard to the Patriot Express Loan, they are having difficulties also to acquire that capital. The rationale seems to be … the banks in general seem to be tightening the credit, their lending practices, so that is … what we are hearing." More recently, GAO reported in 2013 that "selected loan recipients, lenders, and veteran service organizations said that a low awareness of the Patriot Express program among the military community was among the most frequently cited challenges." No empirical assessments of veterans' experiences with either the SBA's Patriot Express or SBAExpress loan programs exist that would be useful for determining the relative ease or difficulty for veteran-owned small business owners of accessing capital through the SBA's loan programs. Since 2010, many lenders report that they have eased their credit standards, at least somewhat, for small business loans, suggesting the experiences of veterans seeking a SBA loan guaranty today may be improved compared with their experiences in 2010. However, GAO found in 2013 that many veterans were not fully aware of the SBA's Patriot Express program and that "over half of the Patriot Express loan recipients, six of the eight lenders, and two veteran service organizations … said that [the] SBA could do more to increase outreach to veteran entrepreneurs and better market the program to the military community." GAO reported that low awareness of the SBA's Patriot Express program and the SBA's participating lenders were a continuing challenge for the SBA. One option to provide additional information concerning veterans' experiences with the SBA's lenders would be to survey veterans who have received a SBA guaranteed loan. The survey could include questions concerning these veterans' views of the programs, including the application process. However, obtaining a comprehensive list of veterans to survey who have been turned down for a SBA guaranteed loan by a private lender would be difficult given privacy concerns. In a related development concerning veterans' access to capital, legislation was introduced during the 114 th Congress ( S. 1870 , the Veterans Entrepreneurial Transition Act of 2015, and its House companion bill, H.R. 3248 ) to authorize a three-year pilot program, administered by the SBA, to provide grants to no more than 250 GI-Bill benefit-eligible veterans to start or acquire a qualifying business. The grant amount would have been calculated according to a formula related to the unused portion of the recipient's GI-Bill benefits. Recipients would have been required to complete specified training and meet other program requirements, such as having an approved business plan. S. 1870 was ordered to be reported with an amendment in the nature of a substitute by the Senate Committee on Small Business and Entrepreneurship on July 29, 2015. In addition, H.R. 5698 , the Strengthening Technical Assistance, Resources, and Training to Unleash the Potential of Veterans Act of 2016 (STARTUP Vets Act of 2016), and its companion bill in the Senate, S. 2273 , would have authorized the SBA to provide up to $1.5 million in grants annually "from amounts made available to the Office of Veterans Business Development" to organizations to create and operate business incubators and accelerators that provide technical assistance and training to veterans (including their spouse and dependents) to enable them "to effectively transfer relevant skills to launch and accelerate small business concerns owned and controlled by covered individuals; and to create an avenue for high-performing covered individuals to meet and collaborate on business ideas." During the 115 th Congress, S. 1056 , the Veteran Small Business Export Promotion Act, and H.R. 2835 , To amend the Small Business Act, would have permanently waived "the guarantee fee for loans of not more than $150,000 provided to veterans and spouses of veterans under the [SBA's] Export Working Capital, International Trade, and Export Express programs." Since 1978, federal agency heads have been required to establish federal procurement contracting goals, in consultation with the SBA, "that realistically reflect the potential of small business concerns" to participate in federal procurement. Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting the goals to the SBA. The SBA negotiates the goals with each federal agency and establishes a small business eligible baseline for evaluating the agency's performance. The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement, such as contracts awarded to mandatory and directed sources, awarded and performed overseas, funded predominately from agency-generated sources, not covered by Federal Acquisition Regulations, and not reported in the Federal Procurement Data System (e.g., contracts or government procurement card purchases valued less than $3,000). These exclusions typically account for 18% to 20% of all federal prime contracts each year. The SBA then evaluates the agencies' performance against their negotiated goals annually, using data from the Federal Procurement Data System–Next Generation, managed by the U.S. General Services Administration, to generate the small business eligible baseline. This information is compiled into the official Small Business Goaling Report, which the SBA releases annually. Over the years, federal government-wide procurement contracting goals have been established for small businesses generally ( P.L. 100-656 , the Business Opportunity Development Reform Act of 1988, and P.L. 105-135 , the HUBZone Act of 1997—Title VI of the Small Business Reauthorization Act of 1997); small businesses owned and controlled by socially and economically disadvantaged individuals ( P.L. 100-656 ); women ( P.L. 103-355 , the Federal Acquisition Streamlining Act of 1994); small businesses located within a Historically Underutilized Business Zone, or HUBZone ( P.L. 105-135 ); and small businesses owned and controlled by a service-disabled veteran ( P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999). The current federal small business contracting goals are at least 23% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year; 5% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses for each fiscal year; 5% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses; 3% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses; and 3% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses. There are no punitive consequences for not meeting the small business procurement goals. However, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and heightens public awareness of the issue of small business contracting. For example, agency performance as reported in the SBA's report is often cited by Members during their questioning of federal agency witnesses in congressional hearings. As shown in Table 5 , the FY2017 Small Business Goaling Report , using data in the Federal Procurement Data System, indicates that federal agencies met the federal contracting goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017. Federal agencies awarded 23.88% of the value of their small business eligible contracts ($442.5 billion) to small businesses ($105.7 billion), 9.10% to small disadvantaged businesses ($40.2 billion), 4.71% to women-owned small businesses ($20.8 billion), 1.65% to HUBZone small businesses ($7.3 billion), and 4.05% to service-disabled veteran-owned small businesses ($17.9 billion). The percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017 is also provided in the table for comparative purposes. In a related development, on November 17, 2015, the House passed H.R. 1694 , the Fairness to Veterans for Infrastructure Investment Act of 2015. The bill would have revised the requirement that 10% of the award of contracts for federal-aid highway, federal public transportation, and highway safety research and development programs be set-aside for small businesses owned and controlled by socially and economically disadvantaged individuals. The bill would have required the set-aside to include veteran-owned small businesses. In another related development, the U.S. Supreme Court's decision in Kingdomware Technologies, Inc. v. United States (decided on June 16, 2016) requiring the VA to grant VOSBs certain preferences when awarding procurement contracts could result in the VA awarding additional contracts to VOSBs. In addition, the prevention of fraud in federal small business contracting programs, and in the SBA's loan programs as well, has been a priority for both Congress and the SBA for many years, primarily because reports of fraud in these programs emerge with some regularity. Of particular interest to veterans, GAO has found that "the lack of an effective government-wide fraud-prevention program" has left the service-disabled veteran-owned small business program "vulnerable to fraud and abuse." Under the Small Business Act, a small business owned and controlled by a service-disabled veteran can qualify for a federal government procurement set-aside (a procurement in which only certain businesses may compete) or a sole-source award (awards proposed or made after soliciting and negotiating with only one source) if the small business is at least 51% unconditionally and directly owned and controlled by one or more service-disabled veteran. A veteran is defined as a person who has served "in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable." A disability is service related when it "was incurred or aggravated ... in [the] line of duty in the active military, naval, or air service." Federal agencies may set aside procurements for service-disabled veteran-owned small businesses only if the contracting officer reasonably expects that offers will be received from at least two responsible small businesses and the award will be made at a fair market price (commonly known as the "rule of two" because of the focus on there being at least two small businesses involved). Federal agencies may award sole contracts to service-disabled veteran-owned small businesses when (1) the contracting officer does not reasonably expect that two or more service-disabled veteran-owned small businesses will submit offers; (2) the anticipated award will not exceed $4.0 million ($6.5 million for manufacturing contracts); and (3) the award can be made at a fair and reasonable price. Otherwise, sole-source awards may only be made to service-disabled veteran-owned small businesses under other authority, such as the Competition in Contracting Act. Service-disabled veteran-owned small businesses are not eligible for price evaluation preferences in unrestricted competitions. The VA is statutorily required to establish annual goals for the awarding of VA contracts to both service-disabled veteran-owned small businesses and small businesses owned by other veterans. The VA is authorized to use "other than competitive procedures" in meeting these goals. For example, it may award any contract whose value is below the simplified acquisition threshold (generally $250,000 ) to a veteran-owned business on a sole-source basis, and it may also make sole-source awards of contracts whose value (including options) is between $250,000 and $5 million, provided that certain conditions are met. When these conditions are not met, the VA is generally required to set aside the contract for service-disabled or other veteran-owned small businesses. Service-disabled veteran-owned small businesses can generally self-certify as to their eligibility for contracting preferences available under the Small Business Act. However, in an effort to address fraud in VA contracting, veteran-owned and service-disabled veteran-owned small businesses must be listed in the VA's VetBiz database and have their eligibility verified by the VA to be eligible for preferences in certain VA contracts. Firms that fraudulently misrepresent their size or status have long been subject to civil and criminal penalties under Section 16 of the Small Business Act; SBA regulations implementing Section 16; and other provisions of law, such as the False Claims Act, Fraud and False Statements Act, Program Fraud Civil Remedies Act, and Contract Disputes Act. Several bills were introduced during the 112 th Congress to address fraud in small business contracting programs in various ways. Of particular interest to veterans, S. 3572 , the Restoring Tax and Regulatory Certainty to Small Businesses Act of 2012, and S. 633 , the Small Business Contracting Fraud Prevention Act of 2011, would have, among other changes, amended Section 16 of the Small Business Act to expressly include service-disabled veteran-owned small businesses among the types of small businesses subject to penalties for fraud under that section . The bills would also have required service-disabled veteran-owned small businesses to register in the VA's VetBiz database, or any successor database, and have their status verified by the VA to be eligible for contracting preferences for service-disabled veteran-owned small businesses under the Small Business Act. In addition, during the 113 th Congress, S. 2334 , the Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013, and its companion bill in the House, H.R. 2882 , and H.R. 4435 , the Howard P. "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015, which was passed by the House on May 22, 2014, included a provision that would have authorized the transfer of the VetBiz database's administration and the verification of service-disabled veteran owned small businesses from the VA to the SBA. Advocates of requiring service-disabled veteran-owned small businesses to register in the VetBiz database and have their status verified by the VA (or the SBA) to be eligible for contracting preferences under the Small Business Act argue that doing so would reduce fraud. As then-Senator Snowe stated on the Senate floor when she introduced S. 633 , "Our legislation attempts to remedy the spate of illegitimate firms siphoning away contracts from the rightful businesses trying to compete within the SBA's contracting programs." Others worry that requiring service-disabled veteran-owned small businesses to register in the VetBiz database and have their status verified by the VA (or the SBA) to be eligible for contracting preferences under the Small Business Act may add to the paperwork burdens of small businesses. They seek alternative ways to address the need to reduce fraud in federal small business procurement programs that do not increase the paperwork requirements of small businesses. Still others note that the effectiveness of any change to prevent fraud in veteran-owned and service-disabled veteran-owned small business procurement programs largely depends upon how the change is implemented. For example, in July 2011, the VA's Office of Inspector General concluded that the VA's implementation of its veteran-owned and service-disabled veteran-owned small business procurement fraud prevention programs needed improvement: We project that VA awarded ineligible businesses at least 1,400 VOSB [Veteran Owned Small Business] and SDVOSB [Service-Disabled Veteran Owned Small Business] contracts valued at $500 million annually and that it will award about $2.5 billion in VOSB and SDVOSB contracts to ineligible businesses over the next 5 years if it does not strengthen oversight and verification procedures. VA and the Office of Small and Disadvantaged Business Utilization (OSDBU) need to improve contracting officer oversight, document reviews, completion of site visits for "high-risk" businesses, and the accuracy of VetBiz Vendor Information Pages information. P.L. 106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999, signed into law on August 17, 1999, authorized the SBA's Military Reservist Economic Injury Disaster Loan (MREIDL) program. The SBA published the final rule establishing the program in the Federal Register on July 25, 2001, with an effective date of August 24, 2001. The Senate Committee on Small Business provided, in its committee report on the Veterans Entrepreneurship and Small Business Development Act of 1999, the following reasons for supporting the authorization of the MREIDL Program: During and after the Persian Gulf War in the early 1990's, the Committee heard from reservists whose businesses were harmed, severely crippled, or even lost, by their absence. Problems faced by reservists called to active duty and their small businesses were of a varied nature and included cash-flow problems, difficulties with training an appropriate alternate manager on very short notice to run the business during the period of service, lost clientele upon return, and on occasion, bankruptcy. These hardships can occur during a period of national emergency or during a period of contingency operation when troops are deployed overseas. To help such reservists and their small businesses, the Committee seeks to provide credit and management assistance to small businesses when an essential employee (i.e., an owner, manager or vital member of the business' staff) is a reservist called to active duty. The Committee believes that financial assistance in the form of loans, loan deferrals and managerial guidance are effective ways to minimize the adverse financial demands of the call to active duty. They not only ameliorate financial difficulties but also strengthen small businesses. The House Committee on Small Business also supported the program's authorization, indicating in its committee report that the program will also fulfill a long unmet need to assist our military reservists who are small business owners. Often these individuals, called to service at short notice, come back from fighting to protect our freedoms only to find their businesses in shambles. H.R. 1568 will establish loan deferrals, technical and managerial assistance, and loan programs for these citizen soldiers so that while they risk their lives they need not risk their livelihoods. As mentioned previously, the SBA provides direct loans for owners of businesses of all sizes, homeowners, and renters to assist their recovery from natural disasters. The SBA's MREIDL program provides disaster assistance in the form of direct loans of up to $2 million to help small business owners who are not able to obtain credit elsewhere to (1) meet ordinary and necessary operating expenses that they could have met but are not able to meet; or (2) enable them to market, produce, or provide products or services ordinarily marketed, produced, or provided by the business that cannot be done because an essential employee has been called up to active duty in his or her role as a military reservist or member of the National Guard due to a period of military conflict. Under specified circumstances, the SBA may waive the $2 million limit (e.g., the small business is in immediate danger of going out of business, is a major source of employment, employs 10% or more of the workforce within the commuting area in which the business is located). P.L. 106-50 defines an essential employee as "an individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful day-to-day operations of that small business concern." The act defines a military conflict as (1) a period of war declared by Congress; or (2) a period of national emergency declared by Congress or the President; or (3) a period of contingency operation. A contingency operation is designated by the Secretary of Defense as an operation in which our military may become involved in military actions, operations, or hostilities (peacekeeping operations). The SBA is authorized to make such disaster loans either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis. The loan term may be up to a maximum of 30 years and is determined by the SBA in accordance with the borrower's ability to repay the loan. The loan's interest rate is the SBA's published interest rate for an Economic Injury Disaster Loan at the time the application for assistance is approved by the SBA. Economic Injury Disaster Loan interest rates may not exceed 4%. The SBA is not required by law to require collateral on disaster loans. However, the SBA has established collateral requirements for disaster loans based on "a balance between protection of the Agency's interest as a creditor and as a provider of disaster assistance." The SBA generally does not require collateral to secure a MREIDL loan of $50,000 or less. Larger loan amounts require collateral, but the SBA will not decline a request for a MREIDL loan for a lack of collateral if the SBA is reasonably certain the borrower can repay the loan. The SBA disbursed one MREIDL loan in FY2014, none in FY2015, three in FY2016, and three in FY2017. Since the MREIDL's inception through December 31, 2017, the SBA has disbursed 352 MREIDL loans amounting to $32.97 million. Of these 352 loans, 85 loans (24.2% of the total number of MREIDL loans disbursed), amounting to $7.8 million (23.8% of the total amount of MREIDL loans disbursed), have been charged off (a declaration that the debt is unlikely to be collected) by the SBA. Because the MREIDL program is relatively small and noncontroversial, this report does not present a discussion of the congressional issues affecting the program. Congress has demonstrated a continuing interest in federal programs designed to assist veterans transition from military to civilian life. For example, the SBA's veteran business development programs, loan guaranty programs, and federal procurement programs for small businesses generally, including service-disabled veteran-owned small businesses, have all been subject to congressional hearings during the past several Congresses. Also, as has been discussed, several bills have been introduced in recent Congresses to address the SBA's management of these programs and fraud. Given the many factors that influence business success, measuring the effectiveness of the SBA's veteran assistance programs, especially the programs' effect on veteran job retention and creation, is both complicated and challenging. For example, it is difficult to determine with any degree of precision or certainty the extent to which any changes in the success of a small business result primarily from that business's participation in the SBA's programs or from changes in the broader economy. That task is made even more challenging by the absence of performance outcome measures that could serve as a guide. In most instances, the SBA uses program performance measures that focus on indicators that are primarily output related, such as the number and amount of loans approved for veteran-owned small businesses and the number and amount of federal contracts awarded to service-disabled veteran-owned small businesses. Both GAO and the SBA's Office of Inspector General have recommended that the SBA adopt more outcome-related performance measures for the SBA's loan guaranty programs, such as tracking the number of borrowers that remain in business after receiving a SBA guaranteed loan to measure the extent to which the SBA contributed to their ability to stay in business. Other performance-oriented measures that Congress might also consider include requiring the SBA to survey veterans who participate in its business development programs or who have received a SBA guaranteed loan. This survey could provide information related to the difficulty the veterans experienced in obtaining a loan from the private sector, their experiences with the SBA's loan application process, and the role the SBA loan had in creating or retaining jobs. The SBA could also survey service-disabled veteran-owned small businesses that were awarded a federal contract to determine the extent to which the SBA was instrumental in their receiving the award and the extent to which the award contributed to their ability to create jobs or expand their scope of operations.
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Several federal agencies, including the Small Business Administration (SBA), provide training and other assistance to veterans seeking civilian employment. For example, the Department of Defense (DOD), in cooperation with the SBA, Department of Labor, Department of Veterans Affairs, and several other federal agencies, operates the Transition Goals Plans Success program (Transition GPS), which provides employment information and entrepreneurship training to exiting military servicemembers to assist them in transitioning from the military to the civilian labor force. In recent years, the unemployment rate among veterans as a whole has generally been similar to or lower than the unemployment rate for nonveterans 18 years and older. However, veterans who have left the military since September 2001 have experienced higher unemployment than other veterans and, in some years, higher unemployment than nonveterans. As a result, Congress has focused much of its attention on finding ways to assist veterans who have left the military since September 2001. The SBA provides management and technical assistance services to more than 100,000 veterans each year through its various management and technical assistance training partners (e.g., Small Business Development Centers, Women's Business Centers [WBCs], Service Corps of Retired Executives [SCORE], and Veterans Business Outreach Centers [VBOCs]). The SBA's Office of Veterans Business Development (OVBD) also administers several programs to assist veterans, including the Operation Boots to Business: From Service to Startup initiative, which is part of DOD's Transition GPS program. The expansion of federal employment training programs targeted at specific populations, such as women and veterans, has led some Members and organizations to ask if these programs should be consolidated. In their view, eliminating program duplication among federal business assistance programs across federal agencies, and within the SBA, would result in lower costs and improved services. Others argue that keeping these business assistance programs separate enables them to offer services that match the unique needs of various underserved populations, such as veterans. In their view, instead of considering program consolidation as a policy option, the focus should be on improving communication and cooperation among the federal agencies providing assistance to entrepreneurs. This report opens with an examination of the economic circumstances of veteran-owned businesses drawn from the Bureau of the Census's 2012 Survey of Business Owners (SBO). It then provides a brief overview of veterans' employment experiences, comparing unemployment and labor force participation rates for veterans, veterans who have left the military since September 2001, and nonveterans. The report also describes employment assistance programs offered by several federal agencies to assist veterans in their transition from the military to the civilian labor force and examines, in greater detail, the SBA's veteran business development programs, the SBA's efforts to assist veterans' access to capital, and the SBA's veteran contracting programs. It also discusses the SBA's Military Reservist Economic Injury Disaster Loan program and P.L. 114-38, the Veterans Entrepreneurship Act of 2015, which authorized and made permanent the SBA's recent practice of waiving the SBAExpress loan program's one time, up-front loan guarantee fee for veterans (and their spouse).
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The federal child nutrition programs provide assistance to schools and other institutions in the form of cash, commodity food, and administrative support (such as technical assistance and administrative funding) based on the provision of meals and snacks to children. In general, these programs were created (and amended over time) to both improve children's nutrition and provide support to the agriculture economy. Today, the child nutrition programs refer primarily to the following meal, snack, and milk reimbursement programs (these and other acronyms are listed in Appendix A ): National School Lunch Program (NSLP) (Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.)); School Breakfast Program (SBP) (Child Nutrition Act, Section 4 (42 U.S.C. 1773)); Child and Adult Care Food Program (CACFP) (Richard B. Russell National School Lunch Act, Section 17 (42 U.S.C. 1766)); Summer Food Service Program (SFSP) (Richard B. Russell National School Lunch Act, Section 13 (42 U.S.C. 1761)); and Special Milk Program (SMP) (Child Nutrition Act, Section 3 (42 U.S.C. 1772)). The programs provide financial support and/or foods to the institutions that prepare meals and snacks served outside of the home (unlike other food assistance programs such as the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) where benefits are used to purchase food for home consumption). Though exact eligibility rules and pricing vary by program, in general the amount of federal reimbursement is greater for meals served to qualifying low-income individuals or at qualifying institutions, although most programs provide some subsidy for all food served. Participating children receive subsidized meals and snacks, which may be free or at reduced price. Forthcoming sections discuss how program-specific eligibility rules and funding operate. This report describes how each program operates under current law, focusing on eligibility rules, participation, and funding. This introductory section describes some of the background and principles that generally apply to all of the programs; subsequent sections go into further detail on the workings of each. Unless stated otherwise, participation and funding data come from USDA-FNS's "Keydata Reports." The child nutrition programs are most often dated back to the 1946 enactment of the National School Lunch Act, which created the National School Lunch Program, albeit in a different form than it operates today. Most of the child nutrition programs do not date back to 1946; they were added and amended in the decades to follow as policymakers expanded child nutrition programs' institutional settings and meals provided: The Special Milk Program was created in 1954, regularly extended, and made permanent in 1970. The School Breakfast Program was piloted in 1966, regularly extended, and eventually made permanent in 1975. A program for child care settings and summer programs was piloted in 1968, with separate programs authorized in 1975 and then made permanent in 1978. These are now the Child and Adult Care Food Program and Summer Food Service Program. The Fresh Fruit and Vegetable Program began as a pilot in 2002, was made permanent in 2004, and was expanded nationwide in 2008. The programs are now authorized under three major federal statutes: the Richard B. Russell National School Lunch Act (originally enacted as the National School Lunch Act in 1946), the Child Nutrition Act (originally enacted in 1966), and Section 32 of the act of August 24, 1935 (7 U.S.C. 612c). Congressional jurisdiction over the underlying three laws has typically been exercised by the Senate Agriculture, Nutrition, and Forestry Committee; the House Education and the Workforce Committee; and, to a limited extent (relating to commodity food assistance and Section 32 issues), the House Agriculture Committee. Congress periodically reviews and reauthorizes expiring authorities under these laws. The child nutrition programs were most recently reauthorized in 2010 through the Healthy, Hunger-Free Kids Act of 2010 (HHFKA, P.L. 111-296 ); some of the authorities created or extended in that law expired on September 30, 2015. WIC (the Special Supplemental Nutrition Program for Women, Infants, and Children) is also typically reauthorized with the child nutrition programs. WIC is not one of the child nutrition programs and is not discussed in this report. The 114 th Congress began but did not complete a 2016 child nutrition reauthorization (see CRS Report R44373, Tracking the Next Child Nutrition Reauthorization: An Overview ). There was no significant legislative activity with regard to reauthorization in the 115 th Congress. The U.S. Department of Agriculture's Food and Nutrition Service (USDA-FNS) administers the programs at the federal level. The programs are operated by a wide variety of local public and private providers and the degree of direct state involvement differs by program and state. At the state level, education, health, social services, and agriculture departments all have roles; at a minimum, they are responsible for approving and overseeing local providers such as schools, summer program sponsors, and child care centers and day care homes, as well as making sure they receive the federal support they are due. At the local level, program benefits are provided to millions of children (e.g., there were 30.0 million in the National School Lunch Program, the largest of the programs, in FY2017), through some 100,000 public and private schools and residential child care institutions, nearly 170,000 child care centers and family day care homes, and just over 50,000 summer program sites. All programs are available in the 50 states and the District of Columbia. Virtually all operate in Puerto Rico, Guam, and the Virgin Islands (and, in differing versions, in the Northern Marianas and American Samoa). This section summarizes the nature and extent to which the programs' funding is mandatory and discretionary, including a discussion of appropriated entitlement status. Table 3 lists child nutrition program and related expenditures. Most spending for child nutrition programs is provided in annual appropriations acts to fulfill the legal financial obligation established by the authorizing laws. That is, the level of spending for such programs, referred to as appropriated mandatory spending, is not controlled through the annual appropriations process, but instead is derived from the benefit and eligibility criteria specified in the authorizing laws. The appropriated mandatory funding is treated as mandatory spending. Further, if Congress does not appropriate the funds necessary to fund the program, eligible entities may have legal recourse. Congress typically considers the Administration's forecast for program needs in its appropriations decisions. For the majority of funding discussed in this report, the formula that controls the funding is not capped and fluctuates based on the reimbursement rates and the number of meals/snacks served in the programs. In the meal service programs, such as the National School Lunch Program, School Breakfast Program, summer programs, and assistance for child care centers and day care homes, federal aid is provided in the form of statutorily set subsidies (reimbursements) paid for each meal/snack served that meets federal nutrition guidelines. Although all (including full-price) meals/snacks served by participating providers are subsidized, those served free or at a reduced price to lower-income children are supported at higher rates. All federal meal/snack subsidy rates are indexed annually (each July) for inflation, as are the income eligibility thresholds for free and reduced-price meals/snacks. Subsequent sections discuss how a specific program's eligibility and reimbursements work. Most subsidies are cash payments to schools or other providers, but a smaller portion of aid is provided in the form of USDA-purchased commodity foods . Laws for three child nutrition programs (NSLP, CACFP, and SFSP) require the provision of commodity foods (or in some cases allow cash in lieu of commodity foods). Meal and snack service entails nonfood costs. Federal child nutrition per-meal/snack subsidies may be used to cover local providers' administrative and operating costs. However, the separate direct federal payments for administrative/operating costs ("State Administrative Expenses," discussed in the " Related Programs, Initiatives, and Support Activities " section) are limited. In addition to the open-ended, appropriated entitlement funds summarized above, the child nutrition programs' funding also includes certain other mandatory funding and a limited amount of discretionary funding. Some of the activities discussed in " Related Programs, Initiatives, and Support Activities ," such as Team Nutrition, are provided for with discretionary funding. Aside from the annually appropriated funding, the child nutrition programs are also supported by certain permanent appropriations and transfers. Notably, funding for the Fresh Fruit and Vegetable Program is funded by a transfer from USDA's Section 32 program, a permanent appropriation of 30% of the previous year's customs receipts. Federal subsidies do not necessarily cover the full cost of the meals and snacks offered by providers. States and localities help cover program costs, as do children's families by paying charges for nonfree or reduced-price meals/snacks. There is a nonfederal cost-sharing requirement for the school meals programs (discussed below), and some states supplement school funding through additional state per-meal reimbursements or other prescribed financing arrangements. Subsequent sections of this report delve into the details of how each of the child nutrition programs support the service of meals and snacks in institutional settings; first, it is useful to take a broader perspective of primary program elements. Table 1 is a top-level look at the different programs that displays distinguishing characteristics (what meals are provided, in what settings, to what ages) and recent program spending. Other relevant CRS reports in this area include CRS In Focus IF10266, An Introduction to Child Nutrition Reauthorization CRS Report R45486, Child Nutrition Programs: Current Issues CRS Report R42353, Domestic Food Assistance: Summary of Programs CRS Report R41354, Child Nutrition and WIC Reauthorization: P.L. 111-296 (summarizes the Healthy, Hunger-Free Kids Act of 2010) CRS Report R44373, Tracking the Next Child Nutrition Reauthorization: An Overview CRS Report R44588, Agriculture and Related Agencies: FY2017 Appropriations CRS Report RL34081, Farm and Food Support Under USDA's Section 32 Program Other relevant resources include USDA-FNS's website, https://www.fns.usda.gov/school-meals/child-nutrition-programs USDA-FNS's Healthy, Hunger-Free Kids Act page, http://www.fns.usda.gov/school-meals/healthy-hunger-free-kids-act The FNS page of the Federal Register , https://www.federalregister.gov/agencies/food-and-nutrition-service This section discusses the school meals programs: the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). Principles and concepts common to both programs are discussed first; subsections then discuss features and data unique to the NSLP and SBP, respectively. The federal school meals programs provide federal support in the form of cash assistance and USDA commodity foods; both are provided according to statutory formulas based on the number of reimbursable meals served in schools. The subsidized meals are served by both public and private nonprofit elementary and secondary schools and residential child care institutions (RCCIs) that opt to enroll and guarantee to offer free or reduced-price meals to eligible low-income children. Both cash and commodity support to participating schools are calculated based on the number and price of meals served (e.g., lunch or breakfast, free or full price), but once the aid is received by the school it is used to support the overall school meal service budget, as determined by the school. This report focuses on the federal reimbursements and funding, but it should be noted that some states have provided state financing through additional state-specific funding. Federal law does not require schools to participate in the school meals programs. However, some states have mandated that schools provide lunch and/or breakfast, and some of these states require that their schools do so through NSLP and/or SBP. The program is open to public and private schools. A reimbursable meal requires compliance with federal school nutrition standards, which have changed throughout the history of the program based on nutritional science and children's nutritional needs. Food items not served as a complete meal meeting nutrition standards (e.g., a la carte offerings) are not reimbursable meals, and therefore are not eligible for federal per-meal, per-snack reimbursements. Following rulemaking to implement provisions in the Healthy, Hunger-Free Kids Act of 2010 ( P.L. 111-296 ), USDA updated the nutrition standards for reimbursable meals in January 2012 (see " Nutrition Standards " for more information). Schools serving meals that meet the updated nutrition standards are eligible for an increased reimbursement of 6 cents per lunch. USDA-FNS administers the school meals programs federally, and state agencies (typically state departments of education) oversee and transmit reimbursements through agreements with school food authorities (SFAs) (typically local educational agencies (LEAs); usually these are school districts). Figure 1 provides an overview of the roles and relationships between these levels of government. There is a cost-sharing requirement for the programs, which amounts to a contribution of approximately $200 million from the states. There also are states that choose to supplement federal reimbursements with their own state reimbursements. The school meals programs and related funding do not serve only low-income children. All students can receive a meal at a NSLP- or SBP-participating school, but how much the child pays for the meal and/or how much of a federal reimbursement the state receives will depend largely on whether the child qualifies for a "free," "reduced-price," or "paid" (i.e., advertised price) meal. Both NSLP and SBP use the same household income eligibility criteria and categorical eligibility rules. States and schools receive the largest reimbursements for free meals, smaller reimbursements for reduced-price meals, and the smallest (but still some federal financial support) for the full-price meals. There are three pathways through which a child can become certified to receive a free or reduced-price meal: 1. Household income eligibility for free and reduced-price meals (information typically collected via household application), 2. Categorical (or automatic) eligibility for free meals (information collected via household application or a direct certification process), and 3. School-wide free meals under the Community Eligibility Provision (CEP) , an option for eligible schools that is based on the share of students identified as eligible for free meals. Each of these pathways is discussed in more detail below. The income eligibility thresholds (shown in Table 2 ) are based on multipliers of the federal poverty guidelines. As the poverty guidelines are updated every year, so are the eligibility thresholds for NSLP and SBP. Free Meals: Children receive free meals if they have household income at or below 130% of the federal poverty guidelines; these meals receive the highest subsidy rate. (Reimbursements are approximately $3.30 per lunch served, less for breakfast.) Reduced-Price Meals: Children may receive reduced-price meals (charges of no more than 40 cents for a lunch or 30 cents for a breakfast) if their household income is above 130% and less than or equal to 185% of the federal poverty guidelines; these meals receive a subsidy rate that is 40 cents (NSLP) or 30 cents (SBP) below the free meal rate. (Reimbursements are approximately $2.90 per lunch served.) Paid Meals: A comparatively small per-meal reimbursement is provided for full-price or paid meals served to children whose families do not apply for assistance or whose family income does not qualify them for free or reduced-price meals. The paid meal price is set by the school but must comply with federal regulations. (Reimbursements are approximately 30 cents per lunch served.) The above reimbursement rates are approximate; exact current-year federal reimbursement rates for NSLP and SBP are listed in Table B -1 and Table B -3 , respectively. Households complete paper or online applications that collect relevant income and household size data, so that the school district can determine if children in the household are eligible for free meals, reduced-price meals, or neither. Though these income guidelines primarily influence funding and administration of NSLP and SBP, they also affect the eligibility rules for the SFSP, CACFP, and SMP (described further in subsequent sections). In addition to the eligibility thresholds listed above, the school meals programs also convey eligibility for free meals based on household participation in certain other need-tested programs or children's specified vulnerabilities (e.g., foster children). Per Section 12 of the National School Lunch Act, "a child shall be considered automatically eligible for a free lunch and breakfast ... without further application or eligibility determination, if the child is" in a household receiving benefits through SNAP (Supplemental Nutrition Assistance Program); FDPIR (Food Distribution Program on Indian Reservations, a program that operates in lieu of SNAP on some Indian reservations) benefits; or TANF (Temporary Assistance for Needy Families) cash assistance; enrolled in Head Start; in foster care; a migrant; a runaway; or homeless. For meals served to students certified in the above categories, the state/school receive a reimbursement at the free meal amount and children receive a free meal. (See Table B -1 and Table B -3 for school year 2018-2019 rates.) Some school districts collect information for these categorical eligibility rules via paper application. Others conduct a process called direct certification —a proactive process where government agencies typically cross-check their program rolls and certify a household's children for free school meals without the household having to complete a school meals application. Prior to 2004, states had the option to conduct direct certification of SNAP (then, the Food Stamp Program), TANF, and FDPIR participants. In the 2004 child nutrition reauthorization ( P.L. 108-265 ), states were required under federal law to conduct direct certification for SNAP participants, with nationwide implementation taking effect in school year 2008-2009. Conducting direct certification for TANF and FDPIR remains at the state's discretion. The Healthy, Hunger-Free Kids Act of 2010 (HHFKA; P.L. 111-296 ) made further policy changes to expand direct certification (discussed further in the next section). One of those changes was the initiation of a demonstration project to look at expanding categorical eligibility and direct certification to some Medicaid households. The law also funded performance incentive grants for high-performing states and authorized correcting action planning for low-performing states in direct certification activities. Under SNAP direct certification rules generally, schools enter into agreements with SNAP agencies to certify children in SNAP households as eligible for free school meals without requiring a separate application from the family. Direct certification systems match student enrollment lists against SNAP agency records, eliminating the need for action by the child's parents or guardians. Direct certification allows schools to make use of SNAP's more in-depth eligibility certification process; this can reduce errors that may occur in school lunch application eligibility procedures that are otherwise used. From a program access perspective, direct certification also reduces the number of applications a household must complete. Figure 2 , created by GAO and published in a May 2014 report, provides an overview of how school districts certify students for free and reduced-price meals under the income-based and category-based rules, via applications and direct certification. A USDA-FNS study of school year 2014-2015 estimates that 11.1 million students receiving free meals were directly certified—68% of all categorically eligible students receiving free meals. HHFKA also authorized the school meals Community Eligibility Provision (CEP), an option in NSLP and SBP law that allows eligible schools and school districts to offer free meals to all enrolled students based on the percentage of their students who are identified as automatically eligible from nonhousehold application sources (primarily direct certification through other programs). Based on the statutory parameters, USDA-FNS piloted CEP in various states over three school years and it expanded nationwide in school year 2014-2015. Eligible LEAs have until June 30 of each year to notify USDA-FNS if they will participate in CEP. According to a database maintained by the Food Research and Action Center, just over 20,700 schools in more than 3,500 school districts (LEAs) participated in CEP in SY2016-2017, an increase of approximately 2,500 schools compared to SY2015-2016. For a school (or school district, or group of schools within a district) to provide free meals to all children the school(s) must be eligible for CEP based on the share (40% or greater) of enrolled children that can be identified as categorically (or automatically) eligible for free meals, and the school must opt-in to CEP. Though CEP schools serve free meals to all students, they are not reimbursed at the "free meal" rate for every meal. Instead, the law provides a funding formula: the percentage of students identified as automatically eligible (the "identified student percentage" or ISP) is multiplied by a factor of 1.6 to estimate the proportion of students who would be eligible for free or reduced-price meals had they been certified via application. The result is the percentage of meals served that will be reimbursed at the free meal rate, with the remainder reimbursed at the far lower paid meal rate. For example, if a CEP school identifies that 40% of students are eligible for free meals, then 64% of the meals served will be reimbursed at the free meal rate and 36% at the paid meal rate. Schools that identify 62.5% or more students as eligible for free meals receive the free meal reimbursement for all meals served. Some of the considerations that may impact a school's decision to participate in CEP include whether the new funding formula would be beneficial for their school meal budget; an interest in reducing paperwork for families and schools; and an interest in providing more free meals, including meals to students who have not participated in the program before. The Healthy, Hunger-Free Kids Act of 2010 (HHFKA; P.L. 111-296 ) set in motion changes to the nutrition standards for school meals, requiring USDA to update the standards within a certain timeframe. The law required that the revised standards be based on recommendations from the Institute of Medicine (IOM) (now the Health and Medicine Division) at the National Academy of Sciences. The law also provided increased federal subsidies (6 cents per lunch) for schools meeting the new requirements and funding for technical assistance related to implementation. USDA published the final regulations in January 2012. The final rule sought to align school meal patterns with the 2010 Dietary Guidelines for Americans, and, generally consistent with IOM's recommendations, increased the amount of fruits, vegetables, whole grains, and low-fat or fat-free milk in school meals. The regulations also included calorie maximums and sodium limits to phase in over time, among other requirements. The nutrition standards largely took effect in SY2012-2013 for lunches and in SY2013-2014 for breakfasts. A few other requirements were scheduled to phase in over multiple school years. Some schools experienced difficulty implementing the new guidelines, and Congress and USDA have made changes to the 2012 final rule's whole grain, sodium, and milk requirements. For SY2019-2020 and onwards, schools are operating under a final rule published December 12, 2018. The HHFKA also gave USDA the authority to regulate other foods in the school nutrition environment. Sometimes called "competitive foods," these include foods and drinks sold in a la carte lines, vending machines, snack bars and concession stands, and fundraisers. Relying on recommendations made by a 2007 IOM report, USDA-FNS promulgated a proposed rule and then an interim final rule in June 2013, which went into effect for SY2014-2015. The interim final rule created nutrition guidelines for all non-meal foods and beverages that are sold during the school day (defined as midnight until 30 minutes after dismissal). The final rule, published on July 29, 2016, maintained the interim final rules with minor modifications. Under the final standards, these foods must meet whole-grain requirements; have certain primary ingredients; and meet calorie, sodium, and fat limits, among other requirements. Schools are limited to a list of no- and low-calorie beverages they may sell (with larger portion sizes and caffeine allowed in high schools). There are no limits on fundraisers selling foods that meet the interim final rule's guidelines. Fundraisers outside of the school day are not subject to the guidelines. HHFKA and the interim final rule provide states with discretion to exempt infrequent fundraisers selling foods or beverages that do not meet the nutrition standards. The rule does not limit foods brought from home, only foods sold at school during the school day. The federal standards are minimum standards; states and school districts are permitted to issue more stringent policies. In FY2017, NSLP subsidized 4.9 billion lunches to children in close to 96,000 schools and 3,200 residential child care institutions (RCCIs). Average daily participation was 30.0 million students (58% of children enrolled in participating schools and RCCIs). Of the participating students, 66.7% (20.0 million) received free lunches and 6.5% (2.0 million) received reduced-price lunches. The remainder were served full-price meals, though schools still receive a reimbursement for these meals. Figure 3 shows FY2017 participation data. FY2017 federal school lunch costs totaled approximately $13.6 billion (see Table 3 for the various components of this total). The vast majority of this funding is for per-meal reimbursements for free and reduced-price lunches. The HHFKA also provided an additional 6-cent per-lunch reimbursement to schools that provide meals that meet the updated nutritional guidelines requirements. This bonus is not provided for breakfast, but funds may be used to support schools' breakfast programs. NSLP lunch reimbursement rates are listed in Table B -1 . In addition to federal cash subsidies, schools participating in NSLP receive USDA-acquired commodity food s . Schools are entitled to a specific, inflation-indexed value of USDA commodity foods for each lunch they serve. Also, schools may receive donations of bonus commodities acquired by USDA in support of the farm economy. In FY2017, the value of federal commodity food aid to schools totaled nearly $1.4 billion. The per-meal rate for commodity food assistance is included in Table B-4 . While the vast majority of NSLP funding is for lunches served during the school day, NSLP may also be used to support snack service during the school year and to serve meals during the summer. These features are discussed in subsequent sections, " Summer Meals " and " After-School Meals and Snacks: CACFP, NSLP Options ." Reimbursement rates for snacks are listed in Table B -2 . The School Breakfast Program (SBP) provides per-meal cash subsidies for breakfasts served in schools. Participating schools receive subsidies based on their status as a severe need or nonsevere need institution. Schools can qualify as a severe need school if 40% or more of their lunches are served free or at reduced prices. See Table B -3 for SBP reimbursement rates. Figure 4 displays SBP participation data for FY2017. In that year, SBP subsidized over 2.4 billion breakfasts in over 88,000 schools and nearly 3,200 RCCIs. Average daily participation was 14.7 million children (30.1% of the students enrolled in participating schools and RCCIs). The majority of meals served through SBP are free or reduced-price. Of the participating students, 79.1% (11.6 million) received free meals and 5.7% (835,000) purchased reduced-price meals. Federal school breakfast costs for the fiscal year totaled approximately $4.3 billion (see Table 3 for the various components of this total). Significantly fewer schools and students participate in SBP than in NSLP. Participation in SBP tends to be lower for several reasons, including the traditionally required early arrival by students in order to receive a meal and eat before school starts. Some schools offer (and anti-hunger groups have encouraged) models of breakfast service that can result in greater SBP participation, such as Breakfast in the Classroom, where meals are delivered in the classroom; "grab and go" carts, where students receive a bagged breakfast that they bring to class, or serving breakfast later in the day in middle and high schools. Unlike NSLP, commodity food assistance is not a formal part of SBP funding; however, commodities provided through NSLP may be used for school breakfasts as well. In addition to the school meals programs discussed above, other federal child nutrition programs provide federal subsidies and commodity food assistance for schools and other institutions that offer meals and snacks to children in early childhood, summer, and after-school settings. This assistance is provided to (1) schools and other governmental institutions, (2) private for-profit and nonprofit child care centers, (3) family/group day care homes, and (4) nongovernmental institutions/organizations that offer outside-of-school programs for children. (Although this report focuses on the programs that serve children, one child nutrition program (CACFP) also serves day care centers for chronically impaired adults and elderly persons under the same general per-meal/snack subsidy terms.) The programs in the sections to follow serve comparatively fewer children and spend comparatively fewer federal funds than the school meal programs. CACFP subsidizes meals and snacks served in early childhood, day care, and after-school settings. CACFP provides subsidies for meals and snacks served at participating nonresidential child care centers, family day care homes, and (to a lesser extent) adult day care centers. The program also provides assistance for meals served at after-school programs. CACFP reimbursements are available for meals and snacks served to children age 12 or under, migrant children age 15 or under, children with disabilities of any age, and, in the case of adult care centers, chronically impaired and elderly adults. Children in early childhood settings are the overwhelming majority of those served by the program. CACFP provides federal reimbursements for breakfasts, lunches, suppers, and snacks served in participating centers (facilities or institutions) or day care homes (private homes). The eligibility and funding rules for CACFP meals and snacks depend first on whether the participating institution is a center or a day care home (the next two sections discuss the rules specific to centers and day care homes). According to FY2017 CACFP data, child care centers have an average daily attendance of about 56 children per center, day care homes have an average daily attendance of approximately 7 children per home, and adult day care centers typically care for an average of 48 chronically ill or elderly adults per center. Providers must demonstrate that they comply with government-established standards for other child care programs. Like in school meals, federal assistance is made up overwhelmingly of cash reimbursements calculated based on the number of meals/snacks served and federal per-meal/snack reimbursements rates, but a far smaller share of federal aid (4.3% in FY2017) is in the form of federal USDA commodity foods (or cash in lieu of foods). Federal CACFP reimbursements flow to individual providers either directly from the administering state agency (this is the case with many child/adult care centers able to handle their own CACFP administrative functions) or through "sponsors" who oversee and provide administrative support for a number of local providers (this is the case with some child/adult care centers and with all day care homes). In FY2017, total CACFP spending was over $3.5 billion, including cash reimbursement, commodity food assistance, and costs for sponsor audits. (See Table 3 for a further breakdown of CACFP costs.) This total also includes the after-school meals and snacks provided through CACFP's "at-risk after-school" pathway; this aspect of the program is discussed later in " After-School Meals and Snacks: CACFP, NSLP Options ." As with school foods, the HHFKA required USDA to update CACFP's meal patterns. USDA's final rule revised the meal patterns for both meals served in child care centers and day care homes, as well as preschool meals served through the NSLP and SBP, effective October 1, 2017. For infants (under 12 months of age), the new meal patterns eliminated juice, supported breastfeeding, and set guidelines for the introduction of solid foods, among other changes. For children ages one and older, the new meal patterns increased whole grains, fruits and vegetables, and low-fat and fat-free milk; limited sugar in cereals and yogurts; and prohibited frying, among other requirements. Child care centers in CACFP can be (1) public or private nonprofit centers, (2) Head Start centers, (3) for-profit proprietary centers (if they meet certain requirements as to the proportion of low-income children they enroll), and (4) shelters for homeless families. Adult day care centers include public or private nonprofit centers and for-profit proprietary centers (if they meet minimum requirements related to serving low-income disabled and elderly adults). In FY2017, over 65,000 child care centers with an average daily attendance of over 3.6 million children participated in CACFP. Over 2,700 adult care centers served nearly 132,000 adults through CACFP. Participating centers may receive daily reimbursements for up to either two meals and one snack or one meal and two snacks for each participant, so long as the meals and snacks meet federal nutrition standards. The eligibility rules for CACFP centers largely track those of NSLP: children in households at or below 130% of the current poverty line qualify for free meals/snacks while those between 130% and 185% of poverty qualify for reduced-price meals/snacks (see Table 2 ). In addition, participation in the same categorical eligibility programs as NSLP as well as foster child status convey eligibility for free meals in CACFP. Like school meals, eligibility is determined through paper applications or direct certification processes. Like school meals, all meals and snacks served in the centers are federally subsidized to some degree, even those that are paid. Different reimbursement amounts are provided for breakfasts, lunches/suppers, and snacks, and reimbursement rates are set in law and indexed for inflation annually. The largest subsidies are paid for meals and snacks served to participants with family income below 130% of the federal poverty income guidelines (the income limit for free school meals), and the smallest to those who have not met a means test. See Table B -5 for current CACFP center reimbursement rates. Unlike school meals, CACFP institutions are less likely to collect per-meal payments. Although federal assistance for day care centers differentiates by household income, centers have discretion on their pricing of meals. Centers may adjust their regular fees (tuition) to account for federal payments, but CACFP itself does not regulate these fees. In addition, centers can charge families separately for meals/snacks, so long as there are no charges for children meeting free-meal/snack income tests and limited charges for those meeting reduced-price income tests. Independent centers are those without sponsors handling administrative responsibilities. These centers must pay for administrative costs associated with CACFP out of nonfederal funds or a portion of their meal subsidy payments. For centers with sponsors, the sponsors may retain a proportion of the meal reimbursement payments they receive on behalf of their centers to cover such costs. CACFP-supported day care homes serve a smaller number of children than CACFP-supported centers , both in terms of the total number of children served and the average number of children per facility. Roughly 17% of children in CACFP (approximately 757,000 in FY2017 average daily attendance) are served through day care homes. In FY2017, approximately 103,000 homes (with just over 700 sponsors) received CACFP support. As with centers, payments to day care homes are provided for up to either two meals and one snack or one meal and two snacks a day for each child. Unlike centers, day care homes must participate under the auspices of a public or, more often, private nonprofit sponsor that typically has 100 or more homes under its supervision. CACFP day care home sponsors receive monthly administrative payments based on the number of homes for which they are responsible. Federal reimbursements for family day care homes differ by the home's status as "Tier I" or "Tier II." Unlike centers, day care homes receive cash reimbursements (but not commodity foods) that generally are not based on the child participants' household income. Instead, there are two distinct, annually indexed reimbursement rates that are based on area or operator eligibility criteria Tier I homes are located in low-income areas (defined as areas in which at least 50% of school-age and enrolled children qualify for free or reduced-price meals) or operated by low-income providers whose household income meets the free or reduced-price income standards. They receive higher subsidies for each meal/snack they serve. Tier II (lower) rates are by default those for homes that do not qualify for Tier I rates; however, Tier II providers may seek the higher Tier I subsidy rates for individual low-income children for whom financial information is collected and verified. (See Table B-6 for current Tier I and Tier II reimbursement rates.) Additionally, HHFKA introduced a number of additional ways (as compared to prior law) by which family day care homes can qualify as low-income and get Tier I rates for the entire home or for individual children. As with centers, there is no requirement that meals/snacks specifically identified as free or reduced-price be offered; however, unlike centers, federal rules prohibit any separate meal charges. Current law SFSP and the NSLP/SBP Seamless Summer Option provide meals in congregate settings nationwide; the related Summer Electronic Benefits Transfer (SEBTC or Summer EBT) demonstration project is an alternative to congregate settings. SFSP supports meals for children during the summer months. The program provides assistance to local public institutions and private nonprofit service institutions running summer youth/recreation programs, summer feeding projects, and camps. Assistance is primarily in the form of cash reimbursements for each meal or snack served; however, federally donated commodity foods are also offered. Participating service institutions are often entities that provide ongoing year-round service to the community including schools, local governments, camps, colleges and universities in the National Youth Sports program, and private nonprofit organizations like churches. Similar to the CACFP model, sponsors are institutions that manage the food preparation, financial, and administrative responsibilities of SFSP. Sites are the places where food is served and eaten. At times, a sponsor may also be a site. State agencies authorize sponsors, monitor and inspect sponsors and sites, and implement USDA policy. Unlike CACFP, sponsors are required for an institution's participation in SFSP as a site. In FY2017, nearly 5,500 sponsors with 50,000 food service sites participated in the SFSP and served an average of approximately 2.7 million children daily (according to July data). Participation of sites and children in SFSP has increased in recent years. Program costs for FY2017 totaled over $485 million, including cash assistance, commodity foods, administrative cost assistance, and health inspection costs. There are several options for eligibility and meal/snack service for SFSP sponsors (and their sites) Open sites provide summer food to all children in the community. These sites are certified based on area eligibility measures, where 50% or more of area children have family income that would make them eligible for free or reduced-price school meals (see Table 2 ). Closed or Enrolled sites provide summer meals/snacks free to all children enrolled at the site. The eligibility test for these sites is that 50% or more of the children enrolled in the sponsor's program must be eligible for free or reduced-price school meals based on household income. Closed/enrolled sites may also become eligible based on area eligibility measures noted above. Summer camps (that are not enrolled sites) receive subsidies only for those children with household eligibility for free or reduced-price school meals. Other programs specified in law , such as the National Youth Sports Program and centers for homeless or migrant children. Summer sponsors get operating cost (food, storage, labor) subsidies for all meals/snacks they serve—up to one meal and one snack, or two meals per child per day. In addition, sponsors receive payments for administrative costs, and states are provided with subsidies for administrative costs and health and meal-quality inspections. See Table B -7 for current SFSP reimbursement rates. Actual payments vary slightly (e.g., by about 5 cents for lunches) depending on the location of the site (e.g., rural vs. urban) and whether meals are prepared on-site or by a vendor. Although SFSP is the child nutrition program most associated with providing meals during summer months, it is not the only program option for providing these meals and snacks. The Seamless Summer Option, run through NSLP or SBP programs, is also a means through which food can be provided to students during summer months. Much like SFSP, Seamless Summer operates in summer sites (summer camps, sports programs, churches, private nonprofit organizations, etc.) and for a similar duration of time. Unlike SFSP, schools are the only eligible sponsors , although schools may operate the program at other sites. Reimbursement rates for Seamless Summer meals are the same as current NSLP/SBP rates. Beginning in summer 2011 and (as of the date of this report) each summer since, USDA-FNS has operated Summer Electronic Benefit Transfer for Children (SEBTC or "Summer EBT") demonstration projects in a limited number of states and Indian Tribal Organizations (ITOs). These Summer EBT projects provide electronic food benefits over summer months to households with children eligible for free or reduced-price school meals. Depending on the site and year, either $30 or $60 per month is provided, through a WIC or SNAP EBT card model. In the demonstration projects, these benefits were provided as a supplement to the Summer Food Service Program (SFSP) meals available in congregate settings. Summer EBT and other alternatives to congregate meals through SFSP were first authorized and funded by the FY2010 appropriations law ( P.L. 111-80 ). Although a number of alternatives were tested and evaluated, findings from Summer EBT were among the most promising, and Congress provided subsequent funding. Summer EBT evaluations showed significant impacts on reducing child food insecurity and improving nutritional intake. Summer EBT was funded by P.L. 111-80 in the summers from 2011 to 2014. Projects have continued to operate and were annually funded by FY2015-FY2018 appropriations; most recently, the FY2018 appropriations law ( P.L. 115-141 ) provided $28 million. According to USDA-FNS, in summer 2016 Summer EBT served over 209,000 children in nine states and two tribal nations—an increase from the 11,400 children served when the demonstration began in summer 2011. Schools (and institutions like summer camps and child care facilities) that are not already participating in the other child nutrition programs can participate in the Special Milk Program. Schools may also administer SMP for their part-day sessions for kindergartners or pre-kindergartners. Under SMP, participating institutions provide milk to children for free and/or at a subsidized paid price, depending on how the enrolled institution opts to administer the program (see Table B -8 for current Special Milk reimbursement rates for each of these options) An institution that only sells milk will receive the same per-half pint federal reimbursement for each milk sold (approximately 20 cents). An institution that sells milk and provides free milk to eligible children (income eligibility is the same as free school meals, see Table 2 ), receives a reimbursement for the milk sold (approximately 20 cents) and a higher reimbursement for the free milks. An institution that does not sell milk provides milk free to all children and receives the same reimbursement for all milk (approximately 20 cents). This option is sometimes called nonpricing. In FY2017, over 41 million half-pints were subsidized, 9.5% of which were served free. Federal expenditures for this program were approximately $8.3 million in FY2017. States receive formula grants through the Fresh Fruit and Vegetable Program, under which state-selected schools receive funds to purchase and distribute fresh fruit and vegetable snacks to all children in attendance (regardless of family income). Money is distributed by a formula under which about half the funding is distributed equally to each state and the remainder is allocated by state population. States select participating schools (with an emphasis on those with a higher proportion of low-income children) and set annual per-student grant amounts (between $50 and $75). Funding is set by law at $150 million for school year 2011-2012 and inflation-indexed for every year after. In FY2017, states used approximately $184 million in FFVP funds. FFVP is funded by a mandatory transfer of funds from USDA's Section 32 program—a permanent appropriation of 30% of the previous year's customs receipts. This transfer is required by FFVP's authorizing laws (Section 19 of the Richard B. Russell National School Lunch Act and Section 4304 of P.L. 110-246 ). Up until FY2018's law, annual appropriations laws delayed a portion of the funds to the next fiscal year. After a pilot period, the Child Nutrition and WIC Reauthorization Act of 2004 ( P.L. 108-265 ) permanently authorized and funded FFVP for a limited number of states and Indian reservations. In recent years, FFVP has been amended by omnibus farm bill laws rather than through child nutrition reauthorizations. The 2008 farm bill ( P.L. 110-246 ) expanded FFVP's mandatory funding, specifically providing funds through Section 32, and enabled all states to participate in the program. The 2014 farm bill ( P.L. 113-79 ) essentially made no changes to this program but did include, and fund at $5 million in FY2014, a pilot project that requires USDA to test offering frozen, dried, and canned fruits and vegetables and publish an evaluation of the pilot. Four states (Alaska, Delaware, Kansas, and Maine) participated in the pilot in SY2014-2015 and the evaluation was published in 2017. Other proposals to expand fruits and vegetables offered in FFVP have been introduced in both the 114 th and 115 th Congress. Two of the child nutrition programs discussed in previous sections, the National School Lunch Program (NSLP) and Child and Adult Care Food Program (CACFP), provide federal support for snacks and meals served during after-school programs. NSLP provides reimbursements for after-school snacks; however, this option is open only to schools that already participate in NSLP. These schools may operate after-school snack-only programs during the school year, and can do so in two ways: (1) if low-income area eligibility criteria are met, provide free snacks in lower-income areas; or (2) if area eligibility criteria are not met, offer free, reduced-price, or fully paid-for snacks, based on household income eligibility (like lunches in NSLP). The vast majority of snacks provided through this program are through the first option. Through this program, approximately 206 million snacks were served in FY2017 (a daily average of nearly 1.3 million). This compares with nearly 4.9 billion lunches served (a daily average of 27.8 million). CACFP provides assistance for after-school food in two ways. First, centers and homes that participate in CACFP and provide after-school care may participate in traditional CACFP (the eligibility and administration described earlier). Second, centers in areas where at least half the children in the community are eligible for free or reduced-price school meals can opt to participate in the CACFP At-Risk Afterschool program, which provides free snacks and suppers. Expansion of the At-Risk After-School meals program was a major policy change included in HHFKA. Prior to the law, 13 states were permitted to offer CACFP At-Risk After-School meals (instead of just a snack); the law allowed all CACFP state agencies to offer such meals. In FY2017, the At-Risk Afterschool program served a total of approximately 242.6 million free meals and snacks to a daily average of more than 1.7 million children. Federal child nutrition laws authorize and program funding supports a range of additional programs, initiatives, and activities. Through State Administrative Expenses funding, states are entitled to federal grants to help cover administrative and oversight/monitoring costs associated with child nutrition programs. The national amount each year is equal to about 2% of child nutrition reimbursements. The majority of this money is allocated to states based on their share of spending on the covered programs; about 15% is allocated under a discretionary formula granting each state additional amounts for CACFP, commodity distribution, and Administrative Review efforts. In addition, states receive payments for their role in overseeing summer programs (about 2.5% of their summer program aid). States are free to apportion their federal administrative expense payments among child nutrition initiatives (including commodity distribution activities) as they see fit, and appropriated funding is available to states for two years. State Administrative Expense spending in FY2017 totaled approximately $279 million. Team Nutrition is a USDA-FNS program that includes a variety of school meals initiatives around nutrition education and the nutritional content of the foods children eat in schools. This includes Team Nutrition Training Grants, which provide funding to state agencies for training and technical assistance, such as help implementing USDA's nutrition requirements and the Dietary Guidelines for Americans. From 2004 to 2018, Team Nutrition also included the HealthierUS Schools Challenge (HUSSC), which originated in the 2004 reauthorization of the Child Nutrition Act. HUSSC was a voluntary certification initiative designed to recognize schools that have created a healthy school environment through the promotion of nutrition and physical activity. Farm-to-school programs broadly refer to "efforts that bring regionally and locally produced foods into school cafeterias," with a focus on enhancing child nutrition. The goals of these efforts include increasing fruit and vegetable consumption among students, supporting local farmers and rural communities, and providing nutrition and agriculture education to school districts and farmers. HHFKA amended existing child nutrition programs to establish mandatory funding of $5 million per year for competitive farm-to-school grants that support schools and nonprofit entities in establishing farm-to-school programs that improve a school's access to locally produced foods. The FY2018 appropriations law provided an additional $5 million in discretionary funding to remain available until expended. Grants may be used for training, supporting operations, planning, purchasing equipment, developing school gardens, developing partnerships, and implementing farm-to-school programs. USDA's Office of Community Food Systems provides additional resources on farm-to-school issues. Through an Administrative Review process (formerly referred to as Coordinated Review Effort (CRE)), USDA-FNS, in cooperation with state agencies, conducts periodic on-site NSLP school compliance and accountability evaluations to improve management and identify administrative, subsidy claim, and meal quality problems. State agencies are required to conduct administrative reviews of all school food authorities (SFAs) that operate the NSLP under their jurisdiction at least once during a three-year review cycle. Federal Administrative Review expenditures were approximately $9.9 million in FY2017. USDA-FNS and state agencies conduct many other child nutrition program support activities for which dedicated funding is provided. Among other examples, there is the Institute of Child Nutrition (ICN), which provides technical assistance, instruction, and materials related to nutrition and food service management; it receives $5 million a year in mandatory funding appropriated in statute. ICN is located at the University of Mississippi. USDA-FNS provides training on food safety education. Funding is also provided for USDA-FNS to conduct studies, provide training and technical assistance, and oversee payment accuracy. Appendix A. Acronyms Used in This Report Appendix B. Per-meal or Per-snack Reimbursement Rates for Child Nutrition Programs This appendix lists the specific reimbursement rates discussed in the earlier sections of the report. Reimbursement rates are adjusted for inflation for each school or calendar year according to terms laid out in the programs' authorizing laws. Each year, the new rates are announced in the Federal Register .
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The "child nutrition programs" refer to the U.S. Department of Agriculture's Food and Nutrition Service (USDA-FNS) programs that provide food for children in school or institutional settings. The best known programs, which serve the largest number of children, are the school meals programs: the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). The child nutrition programs also include the Child and Adult Care Food Program (CACFP), which provides meals and snacks in day care and after school settings; the Summer Food Service Program (SFSP), which provides food during the summer months; the Special Milk Program (SMP), which supports milk for schools that do not participate in NSLP or SBP; and the Fresh Fruit and Vegetable Program (FFVP), which funds fruit and vegetable snacks in select elementary schools. Funding: The vast majority of the child nutrition programs account is considered mandatory spending, with trace amounts of discretionary funding for certain related activities. Referred to as open-ended, "appropriated entitlements," funding is provided through the annual appropriations process; however, the level of spending is controlled by benefit and eligibility criteria in federal law and dependent on the resulting levels of participation. Federal cash funding (in the form of per-meal reimbursements) and USDA commodity food support is guaranteed to schools and other providers based on the number of meals or snacks served and participant category (e.g., free meals for poor children get higher subsidies). Participation: The child nutrition programs serve children of varying ages and in different institutional settings. The NSLP and SBP have the broadest reach, serving qualifying children of all ages in school settings. Other child nutrition programs serve more-narrow populations. CACFP, for example, provides meals and snacks to children in early childhood and after-school settings among other venues. Programs generally provide some subsidy for all food served but a larger federal reimbursement for food served to children from low-income households. Administration: Responsibility for child nutrition programs is divided between the federal government, states, and localities. The state agency and type of local provider differs by program. In the NSLP and SBP, schools and school districts ("school food authorities") administer the program. Meanwhile, SFSP (and sometimes CACFP) uses a model in which sponsor organizations handle administrative responsibilities for a number of sites that serve meals. Reauthorization: The underlying laws covering the child nutrition programs were last reauthorized in the Healthy, Hunger-Free Kids Act of 2010 (HHFKA, P.L. 111-296, enacted December 13, 2010). This law made significant changes to child nutrition programs, including increasing federal financing for school lunches, expanding access to community eligibility and direct certification options for schools, and expanding eligibility options for home child care providers. The law also required an update to school meal nutrition guidelines as well as new guidelines for food served outside the meal programs (e.g., snacks sold in vending machines and cafeteria a la carte lines). Current Issues: The 114th Congress began but did not complete a 2016 child nutrition reauthorization, and there was no significant legislative activity with regard to reauthorization in the 115th Congress. However, the vast majority of operations and activities continue with funding provided by appropriations laws. Current issues in the child nutrition programs are discussed in CRS Report R45486, Child Nutrition Programs: Current Issues.
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The international oil market has influenced U.S. domestic and foreign policy decisions for decades. The United States plays a significant role in the world oil market, not only as the top consumer of crude oil and petroleum products, but also as the largest producer. The U.S. Energy Information Administration (EIA) estimated that the United States surpassed Russia and Saudi Arabia as the world's number one crude oil producer in 2018. U.S. production is at an all-time high as a result of technological advancements and policy. Despite the recent surge in U.S. oil production, the United States remained a net importer of oil in 2018. Oil availability associates with energy independence and energy security more than any other fuel. Supply, demand, the strength of currencies, and other factors link crude oil to the world market to determine the price. Because the United States is a top consumer and producer of oil, it has the ability to influence this world market. Trade agreements, regulation, sanctions, and unpredictable events all contribute to the flow of oil in the world market. Congress may consider policies that affect the world oil market, including sanctions, alternative fuel standards, emission controls, use of electric vehicles, and protection of international trade routes. This report provides an introduction to the U.S. and world oil markets, with an overview of supply and demand, price considerations, and trade flows. The report also includes analysis on selected examples of international conditions that in the past have affected policy decisions in the United States. This report does not focus on trade associated with the entire crude oil and petroleum product value chain, the history of imports and exports, or provide an in-depth country trade balance analysis. The potential impacts of the world oil market on the climate and the environment are not within the scope of this report. The United States has abundant reserves of various natural resources, including crude oil in both conventional and unconventional deposits, such as shale. Technological advancements and new policies have changed the outlook for oil production in the United States from perceived scarcity to abundance. The United States, both the top oil producer and the world's greatest consumer of crude oil and petroleum products (e.g., gasoline), remains a net oil importer. The availability of the crude oil resource and more specifically the "proved" reserves limits the economic production, or supply. Proved reserves are identified, undeveloped resources in the ground that are both technically and economically recoverable under existing economic and operating conditions. This measurement can fluctuate depending on a number of factors such as technology costs, new discoveries, and local and international oil prices. By the end of 2017, the United States had 39.2 billion barrels of proved reserves of oil, according to the U.S. Energy Information Administration (EIA). U.S. oil production has seen steady growth through the deployment of new oil extraction technologies. Production nearly doubled from around 5 million barrels per day (Mb/d) in 2008 to just over 10 Mb/d in 2018. In a world context, in September 2018, the EIA estimated that the United States surpassed Russia and Saudi Arabia as the number one crude oil producer. In 2018, nearly 3 Mb/d of U.S. crude oil production came from shale formations within the Permian basin, located in west Texas and southeastern New Mexico. The United States produces primarily light, sweet crude oil. In 2017, light, sweet crude oil accounted for over half of all U.S. production, primarily from the Bakken shale formation in North Dakota and Montana and the Permian Basin. Hydraulic fracturing and horizontal drilling technologies largely drove the production growth of the past decade. Hydraulic fracturing allows crude oil trapped inside "tight" rock formations to be released. Fluid forced under high pressure into the formation fractures it, creating fissures through which the oil can flow. Horizontal drilling requires a single vertical wellbore at the surface and then drills out horizontally underground across numerous points of extraction. The use of these technologies has raised environmental concerns, particularly involving possible ground water contamination and earthquakes. The United States is the number one consumer of crude oil and refined petroleum products such as gasoline, diesel fuel, and aviation fuel. As Table 1 indicates, crude oil is both a raw ingredient for transportation fuels and a petrochemical feedstock to produce heating oil, lubricants, and other products. Due to this versatility, the price and supply of crude oil can directly affect other industries. Figure 1 shows that U.S. crude oil and petroleum product supplied in 2017 was on average 19.96 Mb/d—which was 20% of total world consumption. According to EIA, consumption is inferred from measurements of products supplied. Domestic crude oil production in 2017 was 9.35 Mb/d. While the United States is at record levels of production, current U.S. production is not meeting U.S. consumption. This supply/demand gap is filled by imports (a constant, but sometimes not dependable source), natural gas liquids, and, if necessary, drawing down commercial crude oil stockpiles or from the Strategic Petroleum Reserve. The demand for crude oil and petroleum products links closely to economic conditions. Consumers use petroleum products for everyday needs, such as driving, making crude oil and petroleum products relatively inelastic. While the economy is often a reliable driver of petroleum product consumption, so too is policy. In 2007, Congress passed the Energy Independence and Security Act ( P.L. 110-140 ), which directed the National Highway Traffic Safety Administration to promulgate new fuel economy standards to increase vehicle fleet efficiency. These standards demonstrate how federal policy choices can influence crude oil consumption in transportation. Several different characteristics of oil determine the price of crude oil. Crude oil quality is one factor that determines a price. Lighter, sweeter crude oil prices, for example, are generally higher than heavy, sour crudes oils, because refineries (see textbox about refineries above) use lighter, sweeter crude oils to produce higher-value petroleum products, such as gasoline and diesel fuel. The spot price and future price are other ways to measure the price of crude oils. The spot market (i.e., where assets are traded for immediate delivery) has a benchmark representing trade of that crude oil. In the United States, the most commonly referenced benchmark is known as West Texas Intermediate or WTI. This benchmark is the price at which oil is traded on the spot market in Cushing, OK. Several world crude oils serve as price benchmarks for other crude oils. Other world reference price benchmarks for crude oil include Brent (Europe) and Dubai Crude. These price benchmarks often differ from one another (known as a spread) and reflect the varying type and quality of the oil, regional market conditions, infrastructure limitations, and transportation costs. Crude oil prices commonly reported in newspapers are those of crude oil futures tied to a benchmark. Futures deal in the trade using contracts for the future delivery of oil, known as the futures market. The oil futures market provides customers the opportunity to hedge risk from price volatility, by contracting a price for production in the future. The pricing of crude oil contributes to the price consumers pay for petroleum products in the United States. Gasoline, for example, closely follows the trends in WTI and Brent. As illustrated by Figure 2 , with the costs of refining, distribution, and taxes relatively stable, changes in crude price drive changes in gasoline price. The Permian Basin produces a significant amount of light, sweet crude at relatively low cost, because of its unique geologic structure. At the Permian Basin, according to the EIA, "operators can continue to drill through several tight oil layers and increase production even with sustained West Texas Intermediate (WTI) crude oil prices below $50 per barrel (bbl)." While also cost competitive, production from the Bakken and Eagle Ford (south Texas) formations may be more economic with sustained prices above $50/bbl (at 2018 infrastructure, market, technology, and cost conditions). In 2017, WTI crude oil averaged $50.80/bbl, down from an average of $99.67/bbl in 2008. The 1970s began the era of limited oil availability and rising oil prices. Following the 1973 Organization of Arab Petroleum Exporting Countries (OAPEC) oil embargo, Congress passed the Energy Policy and Conservation Act of 1975 (EPCA; P.L. 94-163 ). The EPCA, among many other things, restricted U.S. produced crude oil exports. Since its passage, crude oil exports occurred only in certain circumstances. For example, in 1985, President Reagan found it in the national interest to lift export restrictions on U.S. produced crude oil to Canada, following Canada's decision to remove price and volume controls on exports to the United States. The oil sector in the United States has gone through several transformations since the 1970s. Trade policy with respect to oil has undergone significant changes in recent years to accommodate technological and world developments. U.S. crude oil and petroleum product gross imports have declined from average all-time highs of over 13 Mb/d in 2005 to 10 Mb/d average in 2017 ( Figure 3 ). As the U.S. oil market moved toward higher production levels, policies that were put in place during a time of rapidly rising prices and perceived resource scarcity came into question. Consequently, in December 2015, Congress passed the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), which repealed Section 103 of the EPCA ( P.L. 94-163 ), removing any restrictions to crude oil exports. Crude oil and petroleum product imports from Canada have steadily increased since the 1980s. The United States, in 2017, imported roughly 4 Mb/d (or 40% of all U.S. crude oil and petroleum product imports) on average from Canada. In 2013, Canada surpassed the Organization of the Petroleum Exporting Countries (OPEC) as the number one supplier to the United States (see Figure 3 ). Much of Canada's crude oil exports go to the United States. If imports from Canada continue to grow, infrastructure demands will increase. According to the EIA, over half of Canada's production comes from oil sands (a gritty, semisolid form of petroleum) that, once separated from the sand and clay, is a heavy, viscous crude oil. A majority of Canada's crude oils usually end up in the Midwest due to pipeline capacity limitations to the Gulf of Mexico. As mentioned above, not all crude oils are the same and refineries generally process different types of crude oil. In the United States, over half of all crude oil produced is light and sweet, while much of the U.S. refinery capacity processes heavy, sour crude oil grades. Prior to 2015, light, sweet crude oils were discounted domestically, sometimes by as much as $30/bbl, because of infrastructure constraints. With export restrictions removed, producers are now able to sell crude oil to the world market, not eliminating the discount, but lowering it. While U.S crude oil and petroleum product imports are declining, exports are breaking records. The EIA estimates that the United States exported around 7 Mb/d of crude oil and products combined in 2018 ( Figure 4 ). EIA further projects that, in most modeling cases, the United States will become a net petroleum exporter around 2030. As Figure 4 indicates, from 2017 to 2018, gross imports remained constant while exports increased, reducing net imports. Top destinations for U.S. crude oil and petroleum product exports include Mexico, Canada, China, Brazil, and Japan. According to EIA data, these five countries received about half of all U.S. oil exports in 2017. On average, Mexico imported 1 Mb/d of U.S. crude oil and petroleum products in 2017 (nearly double from 2013 levels), due to Mexico's decreased production coupled with rising demand. Mexico has not kept up refining to meet domestic demand. In 2016, Mexico became a net oil importer from the United States for the first time. U.S. gasoline exports in 2018 were more than half of Mexico's gasoline consumption. In general, the world oil market determines the price and supply of oil and petroleum products for U.S. consumers, which may impact policy decisions by Congress. In January 2019, the World Bank projected world gross domestic product growth of 2.9% in 2019 and 2.8% in 2020-2021. As developing economies grow, so too does their demand for fuel and consumer goods, including paints, lubricants, and plastics—many dependent on crude oil. Meanwhile, many countries are also trying to reduce greenhouse gas emissions, diversify their fuel mix, and enhance energy security and independence. The world oil market historically follows the world economy as it grows or declines. Supply generally does not follow demand smoothly, and this results in price volatility. For example, supply bottlenecks can constrain open trade, which can conflate prices and access. The Government of Alberta instituted a crude oil curtailment policy in January 2019, as crude producers faced export infrastructure bottlenecks. The inability to export excess production had caused storage to increase to 35 million barrels of crude oil (nearly double the historical amount) for the Canadian province. Further, prices declined during this period of overproduction to $11.43/bbl from $58.49. In addition to economic growth or decline, the world oil supply is influenced by a number of drivers, including project investments, the price of oil, demand forecasts, and geopolitics. Oil producers attempt to match world demand projections by making new production investments and replacing exhausted or uncompetitive production sites. The EIA estimated the world's proved reserves in 2017 at approximately 1,645 billion barrels of oil. The world supplied approximately 98 Mb/d of petroleum and other liquids; this equates to roughly 50 years of production at 2017 levels. As noted above, proved reserves incorporates crude oil prices, domestic fiscal conditions, geology, and the technology available to economically produce from the reserve base. Often suppliers make decisions to maximize revenue without causing a corresponding decrease in demand. Similarly, volatility in oil prices can create swings in revenue that can disrupt or enable development plans among producers. Venezuela, according to EIA, holds the world's largest proved reserves at 301 billion barrels of oil in 2017, followed by Saudi Arabia (266 billion barrels) and Canada (170 billion barrels). Proved reserves do not necessarily correlate with production levels. Venezuela, for example, has significantly decreased its crude oil production (due in part to a lack of investment and other contributing factors) while the United States has become the number one producer. The EIA estimated that the United States surpassed Russia and Saudi Arabia as the world's number one crude oil producer in 2018. National oil companies (NOCs) dominate Russian and Saudi Arabian oil production. NOCs operate under government ownership or are companies under influence by national governments. In contrast, oil companies in the U.S. private sector operate autonomously. Saudi Arabia, historically the world's leading oil producer and a member of OPEC, has held enough spare capacity to influence the market when it has deemed it necessary. In September 2018, Saudi Arabia held an estimated 1.5 Mb/d of crude oil spare capacity, or 72% of world spare capacity. Spare capacity allows for swift adjustments to crude oil output that can affect the world oil market. OPEC, through crude oil policy decisions, can influence the world's oil supply and as a result crude oil prices. OPEC is an organization of oil-producing nations that together represent nearly 40% of world oil production (see Figure 5 ). Saudi Arabia, a founding member of OPEC, holds the largest share of OPEC production. Although not an OPEC member, Russia recently has coordinated with OPEC on oil supply decisions, which can have a profound effect on the world market. For example, Russia is a participating country to the Declaration of Cooperation, an agreement between OPEC and non-OPEC countries to adjust world oil market production. OPEC countries, particularly Saudi Arabia, often maintain varying levels of spare oil capacity. Those with the greatest spare capacity may be referred to as "swing producers," as they may have the ability to more easily influence the oil market. Swing producers may use their spare capacity to bring balance to an often unstable market, but also may have the power to manipulate the price of oil by either flooding the market (causing downward pressure on price) or by reducing supply (resulting in an increase in price). While OPEC dominates oil production, other non-OPEC countries will gain market share contributing to world supply growth through 2023. The International Energy Agency (IEA) estimates that the United States, Brazil, and Canada will provide the majority of world supply growth. Iraq, Iran, Norway, the United Arab Emirates, and Libya also are expected to contribute to oil supply growth through 2023, but to a smaller degree. Total non-OPEC supply growth is expected to increase by 5.2 Mb/d by 2023, accounting for 81% of 6.4 Mb/d of total world oil capacity growth during this period. While the EIA projects the United States, Brazil, and Canada to drive supply growth through 2023, a number of other countries may experience production declines. China, Mexico, and Venezuela have seen comparatively lower production for the past three years as a result of lower investments and other contributing factors. Venezuelan crude oil production has trended downward since 1998 from approximately 3.4 Mb/d to 2 Mb/d in 2018, with IEA forecasting continued declines to as low as 1 Mb/d through 2023. The IEA reports that globally new oil discoveries fell to a record low in 2017 with 4 billion barrels of new crude oil reserves discovered. Producers consider world demand growth forecasts when making investment decisions. If the prospects for increasing oil consumption appear minimal or if the price outlook looks uneconomical, then producers may be more hesitant to invest in new fields. Producers, however, are looking at ways to make existing mature fields more productive, as well as increasing production of alternatives to crude oil, such as biofuels. Mature fields with production that is declining or nearing retirement may not necessarily be fully exhausted, but rather, oil extraction costs may be at a point that is no longer profitable in the world market. In 2018, world oil product demand was 99.2 Mb/d, and IEA projects that this will increase to 104.7 Mb/d by 2023. Countries seeing the strongest gains economically may also see growth in their demand for oil. The IEA projects China and India to contribute to a large portion of oil demand growth, representing around 20% of total world demand. IEA projects China's oil demand to grow from 12.5 Mb/d in 2017 to 14.4 Mb/d in 2023. India's demand projection is to grow by about 0.2 Mb/d annually to total demand of 5.9 Mb/d in 2023. As demonstrated by Figure 6 , IEA projects relatively flat demand growth for the United States through 2023. Several forecasts estimate that the transportation sector will continue to dominate oil demand. For example, British Petroleum (BP) estimates that transportation will comprise over half of world oil demand through 2040. IEA projects transportation sectors will represent 6.4 Mb/d of the 9.6 Mb/d total oil demand growth from 2017 through 2030. In addition to transportation, the IEA projects petrochemicals (e.g., a chemical product derived from petroleum refining) to contribute to nearly one-third of that total demand growth, at 3.2 Mb/d. Oil demand forecasting for the transportation sector is subject to policy, regulation, and technological development (e.g., electric vehicles). Some countries or international organizations may enact regulations to increase efficiency or to diversify the fuel mix. For example, the International Maritime Organization has set a new world limit of sulfur content in fuel oil used in ships (0.5% down from 3.5%) beginning in 2020. It remains to be seen whether this limit will impact the overall oil market, but crude oils already low in sulfur content may be in higher demand. The shipping industry may even look toward alternative fuels, such as biofuels or liquefied natural gas (LNG, which has negligible sulfur emissions), depending on price and availability. Shippers could also install "scrubbers" (e.g., exhaust cleaning systems) onboard to reduce the sulfur emissions and avoid switching fuels. Petrochemicals contribute to the manufacture of many everyday household items (e.g., paints, lubricants, cars, and plastics). The increase in availability of lighter crude oils in the United States (along with natural gas production in the form of natural gas liquids) contributes to this production industry. Crude oils of this quality can more easily produce ethane, a feedstock once processed becomes ethylene, most commonly used in the making of plastics. Efficiency gains and environmental policy considerations may affect forecasted petrochemical demand growth. Forecast models predicting world oil demand rely on assumptions and can provide divergent results. Projections are highly dependent on their methodologies, assumptions, and available data. For instance, the IEA has multiple scenarios for forecasting (e.g., "Sustainable Development," "Current Policies," and "New Policies"), and each scenario results in different forecasts of future oil demand. In the Sustainable Development scenario, oil demand peaks (i.e., reaches its highest point) around 2020 and begins to decline through 2040, whereas the Current Policies scenario sees strong oil demand growth through 2040. Fuel efficiency standards, alternative fuels, and other policies can all contribute to varying oil demand forecasts across all sectors. These different forecast scenarios illustrate the complexity of oil demand, as well as the effect policy can have on it. Oil prices in the world market are determined fundamentally by supply and demand, which in turn depend on a number of other factors, such as currency exchange rates, the condition of the world economy, investments, and political environments. The market fluctuates over time with numerous often unforeseen circumstances, but responds to decisions and events occurring today. As mentioned above, various hubs price and trade oil in different regions all over the world. These hubs, despite location, trade oil in the U.S. dollar (as is the case with many other commodities), as it serves as a reserve currency for the world economy. As a result, the U.S. dollar and the price of oil have had an inverse relationship, in which a weak dollar has made oil more attractive for purchase to buyers holding other currencies. However, in March 2018, China launched its first crude oil futures contract in Shanghai pegged to the Chinese yuan. As a recent development, it remains to be seen how this will impact oil trade. In the first six months of the Shanghai futures, trade volumes have surpassed the Dubai Mercantile Exchange's oil contract. As Figure 7 demonstrates, several events have correlated to drastic changes in the oil sector. In late 2014, the price of oil decreased from a period of high prices (around $100/bbl in real 2010 dollars) to an annual average low (under $40/bbl in real 2010 dollars), causing producers to reconsider investments in new locations with higher production costs. The price decline was in part due to an oversupplied market, furthered by an OPEC decision to maintain production levels in November 2014, in part to defend market share. OPEC decisions, political destabilization, financial crisis, and war are some of the world events that can affect the supply and price of oil. Geopolitical events resulted in changes to the price of oil, just as the price of oil elicited changes in foreign policy. The IEA Oil 2018 report forecasts an almost near parity between domestic production and consumption in the Americas (down to -0.5 Mb/d) in 2023, while Asia's oil trade deficit (led by China's imports) may increase to about -25.3 Mb/d in 2023 ( Figure 8 ). Middle Eastern (ME), Former Soviet Union (FSU), and European crude oil balances, according to IEA projections, will see only marginal changes—a slight increase in exports for ME and FSU, a slight decrease in imports for Europe ( Figure 8 ). Furthermore, the IEA projects that Latin America may see a slight drop in exports as Venezuela continues to decline in production. In Africa, Nigeria and Egypt may increase domestic consumption, while Angola continues to decline. The IEA also forecasts countries in the Organisation for Economic Co-operation and Development (OECD) on average to trend toward import reduction, as a result of efficiency gains, emissions policies, and fuel diversification (e.g., natural gas in power generation in place of diesel). According to IEA, Asia will increase imports 3.7 Mb/d by 2023. China's projection alone sees an increase in net imports of crude oil from just over 8 Mb/d in 2017 to 10 Mb/d in 2023. China's imports are likely to continue coming from current trading partners, but at higher volumes, with Russia being the top exporter to China. Largely due to an extensive pipeline infrastructure network, Russia exports oil directly to China. Two recently completed Russian pipelines now have a total capacity of 0.6 Mb/d to China. The IEA projects the United States, Norway, Brazil, and Canada to provide the largest new non-OPEC crude exports to the world market. The IEA projects Europe to reduce oil imports and diversify its imports away from reliance on Russia, bringing more imports of crude oil from the United States. According to the IEA, Brazil may increase exports by about 1 Mb/d and offset some of the reduction from Venezuela. Meanwhile, the IEA estimates that Canadian producers may be able to increase exports, but face transportation bottlenecks, limiting their export capacity. The largest outlet for Canadian crude is the United States, either via pipeline or rail. Should the United States reach capacity limits, Canadian producers may have to consider new opportunities. The United States, however, may continue to import Canadian heavy crude oil and export U.S. light crude oil. Canadian producers are attempting to bring oil via pipeline to its west coast for marine export to meet the growing demand in Asia. However, Canadian producers face opposition from environmental groups and from the provincial and local government, resulting in challenges for pipeline approvals. While the oil market directly affects the economy, oil-related policy has the power to influence geopolitics and can be utilized as a tool to influence other countries. Oil policy can be influential in a number of ways, for instance as a response to or in anticipation of undesirable international behavior or as a means to bring balance and stability to an otherwise volatile market. Decisions about energy conservation, environmental protection, and protection of strategic resources can also affect a country's oil supply and demand. The United States plays a multifaceted role in the world oil market, which may affect Congress's policy decisions. As noted, individual countries or events may be able to affect the oil market. OPEC, especially in conjunction with other major producers (e.g., Russia), can exert a greater influence. OPEC produces 40% of world crude oil and maintains enough spare capacity to affect the market. In November 2016, OPEC, Russia, and other non-OPEC members committed to reduce the supply of oil in the world market due to low prices. Since the production cuts began prices increased from around $45/bbl in January 2015 to $84/bbl in October of 2018. Overall, OPEC has exceeded the original production cuts of 1.2 Mb/d agreed to in November 2016, reaching 147% compliance in May 2018. Since 2017, the schedule and quota for production cuts has shifted, as the non-OPEC group has not been in full compliance, while other OPEC members have reached targets and even in some cases have exceeded them. In June 2018, recognizing this overcompliance and rising oil prices, OPEC and Russia agreed to increase production back to 100% group-level compliance with the November 2016 target. Prices have since declined to around $50/bbl in early January 2019. OPEC's coordinated effort to adjust the world supply of oil has an effect on price. OPEC's spare capacity and willingness to adjust production levels gives the organization the ability to exert such influence. Several bills introduced in the 115 th Congress addressed the U.S. relationship with OPEC, including the United States Commission on the Organization of Petroleum Exporting Countries Act of 2017 ( H.R. 545 ); the OPEC Accountability Act of 2018 ( S. 2929 ); and the No Oil Producing and Exporting Cartels (NOPEC) Act of 2018 ( H.R. 5904 and S. 3214 ). Both the House and the Senate NOPEC bills would have amended antitrust law, known as the Sherman Act, to make oil cartels illegal and prosecutable by the U.S. Department of Justice. NOPEC would have revoked the sovereign immunity historically applied to OPEC members, allowing the United States to sue for collusion. It would have made production and price manipulation illegal. Similar bills have been introduced in other Congresses, but were not enacted. Some private sector entities expressed opposition to H.R. 5904 and S. 3214 . For instance, on August 22, 2018, the American Petroleum Institute (API) issued a letter to Congress opposing NOPEC. It stated the legislation may have unintended consequences for the U.S. oil and gas sectors and expressed concerns for U.S. diplomatic and military interests, reciprocal action by OPEC countries. Low oil prices are not necessarily ideal for all U.S. stakeholders throughout the oil supply chain. For example, refiners prefer lower oil prices since they are buying crude oil; however, U.S. producers (depending on their costs of extraction, transportation, etc.) may find extraction of crude oil uneconomic below a certain price. The pressure from these various stakeholders and their effect on government policy is an important factor in the oil market. Members of Congress and Presidents have sought to use oil policy as a foreign policy tool. Historically, Congress and the executive branch have placed sanctions on crude oil, the banking and the financial sectors, and other oil-related sectors in order to communicate favor or disfavor to the governments of certain countries. Often, oil-targeted sanctions have been on selected countries with NOCs, which finance and support government operations. Congress also has used sanctions against individuals, entities, and governments as a response to undesirable international behavior. For example, the 115 th Congress passed the Countering America's Adversaries through Sanctions Act of 2017 ( P.L. 115-44 ), which established requirements for, and granted the President authority to impose, sanctions on Iran, Russia, and North Korea. In 2014, in response to Russia's invasion and annexation of Ukraine's Crimea region and Russia's subsequent support of separatists in eastern Ukraine, the United States imposed sanctions on over 600 individuals, entities, and vessels. President Barack Obama, in initiating economic sanctions on Russian individuals, declared that these activities in Ukraine "threaten its peace, security, stability, sovereignty, and territorial integrity" and constitute a threat to U.S. national security. The United States worked with the European Union to amplify the effect of sanctions on Russia and since 2014 has widened their scope in response to election interference, illegal trade with North Korea, and other activities. The Russia sanctions target several different sectors, including energy, and specifically oil production. Known as "sectoral sanctions," they include restrictions on (1) financing to specific oil companies, and (2) engagement (trade, technology, support, etc.) in certain kinds of oil projects (shale, Arctic offshore, deepwater, etc.) under the directive of Executive Order 13662 and the Ukraine Freedom Support Act of 2014 ( P.L. 113-272 ), as amended. Since 2014, the success of these sectoral sanctions has been difficult to ascertain, as the price of oil sharply declined during the same time period. Furthermore, Russia enacted changes in its tax system and devalued the ruble. Russian economic growth correlates with oil prices. The price collapse likely had an effect on Russia, as economic growth slowed and even contracted by 2.5% in 2015. With the price of oil strengthening, so too did Russia's economy, which grew by 1.5% in 2017. However, the technology-related sanctions aim to have a longer-term effect on Russian oil production by limiting access to U.S. and EU technology. The overall effect of these technological sanctions on Russian oil production may take years to come to fruition. The United States has been utilizing sanctions on Iran for decades as part of an ongoing policy strategy to compel Iran to cease supporting terrorism, to provide transparency of Iran's nuclear program, and to limit strategic power in the Middle East. Starting midyear 2012, the United States and the European Union together enforced sanctions on Iran. These hindered Iran's economy and cut crude production by around 1 Mb/d through 2015, according to EIA ( Figure 9 ). In 2016, these sanctions were lifted, and Iran increased its crude production back to presanctions levels of just under 4 Mb/d. In May 2018, the Trump Administration announced its intention to withdraw from the Joint Comprehensive Plan of Action (which relieved Iran of the 2012-2015 sanctions). In August 2018, the Administration announced that sanctions would be resumed. Overall, these reinstated sanctions, although not adopted worldwide, have had an effect on the Iranian economy, as companies have moved to comply to avoid U.S. penalties for dealing with Iran. Iran's crude oil exports fell to their lowest in 2.5 years in September 2018 to 1.72 Mb/d. On November 5, 2018, China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey were issued waivers to the Iranian oil sanctions with an expiration date set for May 2, 2019. The Trump Administration announced on April 23, 2019, that waivers would no longer be issued or extended beyond May 2. Secretary of State Mike Pompeo stated in a press release that this is to "apply maximum pressure on the Iranian regime until its leaders change their destructive behavior, respect the rights of the Iranian people, and return to the negotiating table." Iran's exports fell to just around 1 Mb/d in April 2019. Venezuela has experienced production declines for many reasons, including sanctions. For years, the Venezuelan government has used revenues from the NOC Petróleos de Venezuela, S.A (PdVSA) to pay for social services and support government spending. When the price of oil collapsed, Venezuela's lack of investment, corruption, and a lack of technical expertise led to oil production declines from roughly 2.5 Mb/d in 2015 to IEA estimates of around 1.5 Mb/d in 2018. For over a decade the United States has imposed a range of sanctions on the Venezuelan government. The Trump Administration imposed sanctions restricting Venezuela's access to U.S. financial markets in August 2017, increasing fiscal pressure on the government. On March 21, 2018, through E.O. 13827, "Taking Additional Steps to Address the Situation in Venezuela," the Administration expanded on 2017 sanctions. Furthermore, on January 25, 2019, the Administration updated the executive orders by broadening "the definition of the term 'Government of Venezuela' to include persons that have acted, or have purported to act, on behalf of the Government of Venezuela." Under these updates, U.S. consumers can continue to purchase Venezuelan crude oil until April 28, 2019, but the payments will be held in blocked accounts. A prohibition on U.S. crude oil imports from Venezuela could result in a shock to the world oil market and a constraint in the world oil supply system, resulting in U.S. Gulf Coast refineries experiencing higher oil prices. However, this initial shock may be short term, as the market would eventually find alternative sources. While the oil market has changed in the past 40 years, physical threats to oil supply still exist, particularly along certain trade routes. Bottlenecks or disruptions along routes can affect the supply of oil and ultimately the price consumers pay. This section will highlight some examples. A key waterway for the transit of oil and natural gas is the Strait of Hormuz in the Persian Gulf. This juncture is the only passage in the Persian Gulf with access to the open ocean and is surrounded by some of the world's largest oil-producing countries. Roughly 24% of the world oil market, almost 22 Mb/d of crude oil and petroleum products, transited the Strait of Hormuz in the first half of 2018. Saudi Arabia has other outlets for oil exports, including the Red Sea; however, the Bab al-Mandeb Strait (where the Red Sea and the Gulf of Aden meet just along the shores of Djibouti, across from Yemen) is another choke point. Saudi Arabia in the summer of 2018 temporarily announced a suspension of oil shipments (roughly 500,000-700,000 barrels per day) through the Bab al-Mandeb Strait after two ships were attacked by Yemen's Houthis. As introduced in the House, a previous version of the National Defense Authorization Act (NDAA) for Fiscal Year 2018 ( P.L. 115-91 ) included language specific to defending critical choke points of interest to national security in the Persian Gulf. While P.L. 115-91 as enacted did not include this language, the House Committee on Armed Services, in H.Rept. 115-200 , stressed that the U.S. military should maintain capabilities to "ensure freedom of navigation at the Bab al Mandab Strait and the Strait of Hormuz." The political relationships of the United States with Iran, Saudi Arabia, other members of OPEC, and China have been strategically important when considering legislation that may affect the security of supply along major oil trade routes. Though most of the oil that flows through the Strait of Hormuz goes to Asia, the world oil market is integrated, so a disruption anywhere can contribute to higher oil prices everywhere. If a major disruption were to occur, depending on the size and cause, the supply shock to the international oil market would likely put upward pressure on oil prices. Some possible examples include escalating war in Yemen; armed confrontation with Iran; and increased tensions over Chinese control in South China Sea. The impact of oil price increases on other economic sectors is difficult to ascertain and challenging to predict, given the pervasive role of oil and oil-based products in the world economy. Despite a new era of abundance for the United States, a massive disruption to world supply along trade routes could permeate into geopolitical relationships, secondary industries (e.g., petrochemicals, agriculture), and the economy at large. Congress over many years has enacted several laws intended to secure the nation's oil supply. The 1970s was an especially busy time for Congress in this area. Largely in response to the OAPEC oil embargo and exhausted U.S. spare capacity, Congress considered security-of-supply policy options. This time period initiated the perception of energy scarcity in the United States. Since then, Congress has continuously demonstrated interest in the oil market. This section identifies some of the ways in which Congress has addressed oil consumption and security. In response to the 1973 OAPEC oil embargo, the United States entered into the International Energy Program in 1974, an agreement that requires all members to hold a 90-day supply of petroleum (based on the previous year's net imports) for emergency use. The following year, Congress passed the EPCA of 1975 ( P.L. 94-163 ), which authorized the creation of the SPR to address emergency supply shortages. The SPR originally was an up to 1 billion barrel petroleum reserve (a combination of crude oil, home heating oil, and gasoline), located around the Gulf of Mexico and in the Northeast. Congress, in 1990, amended the EPCA ( P.L. 101-383 ) to authorize the President to initiate SPR drawdowns during times of economic stress, not necessarily considered an emergency. Congress has also authorized sales form the SPR for various purposes. Its current inventory is around 650 million barrels. Today the SPR's role has expanded to ensure ready oil supplies during natural disasters and to help stabilize the oil market. The EPCA of 1975 also established Corporate Average Fuel Economy (CAFE) standards that began in model year (MY) 1978 for passenger cars and for light trucks in MY 1979. CAFE standards require auto manufacturers to meet miles-per-gallon fuel economy targets for passenger vehicles and light trucks sold in the United States. If a manufacturer fails to do so, it is subject to financial penalties. Vehicle miles per gallon have increased significantly since the institution of CAFE standards. For example, according to the Department of Energy's 2018 Transportation Energy Data Book, starting in 1978, passenger vehicle fuel use dropped from around 80 billion gallons of gasoline to just above 69 billion in 1982. Conversely, the number of registered vehicles increased from 116 million to 123 million during the same time period. While the number of registered passenger vehicles increased, the number of miles driven per vehicle stayed relatively flat (around 9,000 miles per vehicle) throughout the time period. In August 2018, the Environmental Protection Agency and the National Highway Traffic Safety Administration proposed amendments to CAFE standards. These proposed amendments offer eight alternatives for MY 2021-2026. The agencies' preferred alternative is to retain the existing standards through MY 2020 and then to freeze the standards at this level for both programs through MY 2026. Congress has passed several laws establishing tax credits for plug-in electric vehicles (EVs). The Energy Improvement and Extension Act of 2008, enacted as Division B of P.L. 110-343 , established the credit for plug-in EVs. As first enacted, the credit phased out once 250,000 credit-eligible vehicles were sold. The plug-in EV phaseout threshold changed from a 250,000-vehicle limit to a 200,000-vehicle per manufacturer limit in the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ). EVs may play an important role in the future of oil as the transportation sector diversifies fuel sources. In the United States, EVs had less than 4% market share in 2017. Competitive gasoline prices and the often higher cost of initial purchase for EVs may be factors contributing to the relatively slow growth in market share for EVs. In the 115 th Congress, there were proposals to extend, as well as proposals to repeal, the plug-in EV tax credit. In 2005, Congress established the Renewable Fuel Standard (RFS) with the passage of the Energy Policy Act ( P.L. 109-58 ), and expanded it in 2007 with the Energy Independence and Security Act ( P.L. 110-140 ). The RFS requires transportation fuel to contain an increasing amount of renewable fuels, including conventional biofuel, advanced biofuel, cellulosic biofuel, and biomass-based diesel. At the time, transportation sector fuel diversity was negligible; the stronger the reliance of an economic sector on one fuel source, the more at risk it is to fuel supply disruptions. The RFS, in concept, intends to provide some diversification to transportation fuels away from a strong reliance on traditional gasoline or diesel derived from crude oil. Additionally, the focus on agriculture-derived fuels would support the U.S. biofuel industry and could reduce greenhouse gas emissions compared to traditional gasoline and diesel. Implementing the RFS has been challenging due to a number of factors (e.g., infrastructure, technology, and limited federal assistance). Some Members of Congress have expressed concerns about whether or not to amend or repeal the RFS. This report has reviewed select policy issues from the full suite of legislative measures that may influence the world oil market. Domestically, for example, Congress could enact legislation to increase or reduce production by opening areas or restricting certain technologies. Furthermore, emissions controls and emissions-related policies could play a pivotal role in the world oil market. For instance, the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) expanded the 45Q tax credit from $10 to $35 per ton of carbon dioxide (CO 2 ) for use in enhanced oil recovery. The 45Q tax credit demonstrated an interest in utilizing CO 2 emissions, while at the same time expanding oil production in the United States. Furthermore, oil tends to affect many other sectors of the economy and vice versa. Policy changes in one sector could have intended or unintended consequences for the oil market. For instance, tariffs on steel could affect production transportation costs. Other major policy considerations could include international trade policies, infrastructure, diversification of transportation fuels, and funding in research and development.
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The United States, as the largest consumer and producer of oil, plays a major role in the world market. Policy decisions can affect the price of oil and petroleum products (e.g., gasoline) for U.S. consumers and companies operating in U.S. oil production, transportation, and refining sectors. Congress considers policies that can affect the world oil market, including trade, sanctions, protection of trade routes, the Strategic Petroleum Reserve (SPR), and alternative fuel standards. Technological advancements, supportive policies, and other aspects of the U.S. oil industry have reversed a multidecade downward trend in U.S. oil production. In 2018, U.S. oil production nearly doubled compared to 2008. The United States is also the number one consumer of crude oil and refined petroleum products in the world. The pricing of crude oil contributes to the price consumers pay for petroleum products in the United States. Congress has maintained an interest in oil policy. Following the 1973 Organization of Arab Petroleum Exporting Countries (OAPEC) oil embargo, Congress passed the Energy Policy and Conservation Act of 1975 (EPCA; P.L. 94-163). In response to rapid price escalation and perceived scarcity, the EPCA, among many other things, restricted U.S. produced crude oil exports. As the oil sector evolved, Congress has amended the EPCA. The Consolidated Appropriations Act, 2016 (P.L. 114-113) repealed Section 103 of the EPCA removing any restrictions to crude oil exports. Supply, demand, price, and other factors all combine and interact with one another to create the world oil market. Saudi Arabia, historically, has been the world's leading oil producer and along with the Organization of the Petroleum Exporting Counties (OPEC) has held enough spare capacity to influence global oil supply and prices. World oil demand typically follows world economic conditions. Oil prices are set in the world market and are primarily a function of supply and demand fundamentals, but also a number of other factors, such as quality, location, and transport infrastructure availability (e.g., pipelines). While the world oil market historically follows the world economy, supply generally does not follow demand smoothly and this results in price volatility. As economies grow, so too does the demand for crude oil and petroleum products, including fuels, paints, lubricants, and plastics. China and India are forecasted by the International Energy Agency (IEA) to contribute a large portion of oil demand growth, representing around 20% of total world demand by 2023. Asia, by IEA's forecast, will remain a net importer of crude oil through 2023. Oil policy can be influential as a response to or in anticipation of undesirable international behavior or as a means to bring balance and stability to an otherwise volatile market. OPEC, especially in conjunction with other major producers (e.g., Russia), can exert influence on the oil market. Several bills introduced in the 115th Congress addressed the U.S. relationship with OPEC, such as the No Oil Producing and Exporting Cartels (NOPEC) Act of 2018 (H.R. 5904 and S. 3214). The United States has utilized the oil market as a political tool. National oil companies (NOCs) operate under government ownership or are companies under influence by national governments. The United States, by placing sanctions on crude oil and crude oil-related industries, can send a message to those governments (e.g., Iran). Physical threats to oil supply still exist, particularly along certain trade routes. For instance, roughly 24% of the world oil market transited the Strait of Hormuz in the first half of 2018. A disruption to world supply along trade routes could permeate into geopolitical relationships, secondary industries (e.g., petrochemicals, agriculture), and the economy at large. The United States plays a multifaceted role in the world oil market, which may affect policy decisions for Congress. Congress has in the past enacted legislation to promote a stable, reliable supply of oil. For example, the EPCA created the SPR and established the Corporate Average Fuel Economy (CAFE) standard for vehicles, in part, as strategies to reduce U.S. exposure to future supply disruptions. Additionally, Congress has enacted legislation to diversify transportation fuels, including tax credits for electric vehicles and the Renewable Fuel Standard. As the oil market continues to evolve, Congress may want to consider these and other major policy options that could include international trade policies, infrastructure, diversification of transportation fuels, and funding in research and development.
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This report provides an overview of the federal response to domestic violence—defined broadly to include acts of physical and nonphysical violence against spouses and other intimate partners—through the Family Violence Prevention and Services Act (FVPSA). FVPSA programs are carried out by the U.S. Department of Health and Human Services' (HHS's) Administration for Children and Families (ACF) and the Centers for Disease Control and Prevention (CDC). ACF administers most FVPSA programming, including grants to states, territories, and Indian tribes to support local organizations that provide immediate shelter and related assistance for victims of domestic violence and their children. ACF also provides funding for a national domestic violence hotline that responds to calls, texts, and web-based chats from individuals seeking assistance. The funding for ACF also supports state domestic violence coalitions that provide training for and advocacy on behalf of domestic violence providers within each state, as well as multiple resource centers that provide training and technical assistance on various domestic violence issues for a variety of stakeholders. The CDC funds efforts to prevent domestic violence through a program known as Domestic Violence Prevention Enhancement and Leadership Through Allies (DELTA). The House Committee on Education and Labor and the Senate Health, Education, Labor and Pension (HELP) Committee have exercised jurisdiction over FVPSA. The report begins with background on the definitions of domestic violence and related terms. This background section also describes the risk factors for domestic violence and estimates of the number of victims. The next section of the report addresses the history leading up to the enactment of FVPSA, and the major components of the act: a national domestic violence hotline, support for domestic violence shelters and nonresidential services, and community-based responses to prevent domestic violence. The report then discusses efforts under FVPSA to assist children and youth exposed to domestic violence, including teen dating violence. Finally, the report provides an overview of FVPSA's interaction with other federal laws, including the Child Abuse Prevention and Treatment Act (CAPTA) and the Violence Against Women Act of 1994 (VAWA, P.L. 103-322 ). FVPSA was the first federal law to address domestic violence, with a focus on providing shelter and services for survivors; however, since the enactment of VAWA in 1994, the federal response to domestic violence has expanded to involve multiple departments and activities that include investigating and prosecuting crimes and providing additional services to victims and abusers. FVPSA also includes provisions that encourage or require program administrators to coordinate FVPSA programs with related programs and research carried out by other federal agencies. The appendices provide further detail about FVPSA-related definitions and funding, and statistics related to domestic violence victimization. The FVPSA statute focuses on "family violence," which can involve many types of family relationships and forms of violence. FVPSA defines the term as acts of violence or threatened acts of violence, including forced detention, that result in physical injury against individuals (including elderly individuals) who are legally related by blood or marriage and/or live in the same household. This definition focuses on physical forms of violence and is limited to abusers and victims who live together or are related by blood or marriage; however, researchers and others generally agree that family violence is broad enough to include nonphysical violence and physical violence that occurs outside of an intimate relationship. Such a definition can encompass a range of scenarios—rape and other forms of sexual violence committed by a current or former spouse or intimate partner who may or may not live in the same household; stalking by a current or former spouse or partner; abuse and neglect of elderly family members and children; and psychologically tormenting and controlling a spouse, intimate partner, or other member of the household. While family violence can encompass child abuse and elder abuse, FVPSA programs focus on individuals abused by their spouses and other intimate partners. Further, FVPSA references the terms "domestic violence" and "dating violence" as they are defined under VAWA, and discusses these terms alongside family violence. (The FVPSA regulations also define these terms as generally consistent with VAWA, but recognize that the term "dating violence" encompasses additional acts.) The VAWA definition of "domestic violence" encompasses forms of intimate partner violence—involving current and former spouses or individuals who are similarly situated to a spouse, cohabiting individuals, and parents of children in common—that are outlawed under state or local laws. VAWA defines "dating violence" as violence committed by a person who has been in a social relationship of a romantic or intimate nature with the victim; and where the existence of such a relationship is determined based on consideration of the length of the relationship, the type of relationship, and the frequency of interaction between the individuals involved. ( Appendix A provides a summary of these and related terms as they are defined in statute.) The federal government responds to child abuse and elder abuse through a variety of separate programs. Federal law authorizes and funds a range of activities to prevent and respond to child abuse and neglect under Titles IV-B and IV-E of the Social Security Act and CAPTA. Separately, the Older Americans Act (OAA), the major federal vehicle for the delivery of social and nutrition services for older persons, has authorized projects to address elder abuse. In addition, the OAA authorizes, and the federal government funds, the National Center on Elder Abuse . The center provides information to the public and professionals regarding elder abuse prevention activities, and provides training and technical assistance to state elder abuse agencies and to community-based organizations. The Social Services Block Grant, as amended, also includes elder justice provisions, including several grant programs and other activities to promote the safety and well-being of older Americans. The evidence base on domestic violence does not point strongly to any one reason that it is perpetrated, in part because of the difficulty in measuring social conditions (e.g., status of women, gender norms, and socioeconomic status, among others) that can influence this violence. Still, the research literature has identified two underlying influences: the unequal position of women and the normalization of violence, both in society and some relationships. Certain risk variables are often associated with—but not necessarily the causes—of domestic violence. Such factors include a pattern of problem drinking, poverty and economic conditions, and early parenthood. For example, substance abuse often precedes incidents of domestic violence. A U.S. Department of Justice (DOJ) study found that substance abuse tracked closely with homicide, attempted homicide, or the most severe violent incidents of abuse perpetrated against an intimate partner. Among men who killed or attempted to kill their intimate partners, over 80% were problem drinkers in the year preceding the incident. Estimating the number of individuals involved in domestic violence is complicated by the varying definitions of the term and methodologies for collecting data. For example, some research counts a boyfriend or girlfriend as a family relationship while other research does not; still other surveys are limited to specific types of violence and whether violence is reported to police. Certain studies focus more broadly on various types of violence or more narrowly on violence committed among intimate partners. In addition, domestic violence is generally believed to be underreported. Survivors may be reluctant to disclose their victimization because of shame, embarrassment, fear, or belief that they may not receive support from law enforcement. Overall, two studies—the National Intimate Partner and Sexual Violence Survey (NISVS) and the National Crime Victimization Survey (NCVS)—show that violence involving intimate partners is not uncommon, and that both women and men are victimized sexually, physically, and psychologically. Women tend to first be victimized at a younger age than men. Further, minority women and men tend to be victimized at higher rates than their white counterparts. NISVS provides information on the prevalence of domestic violence among individuals during their lifetimes and in the past 12 months prior to the survey. The CDC conducted the study annually in each of 2010-2012 and in 2015. The survey examines multiple aspects of intimate partner violence—including contact sexual violence, which encompasses rape and other acts; physical violence, including slapping, kicking, and more severe acts like being burned; and stalking, which is a pattern of harassing or threatening tactics. Select findings from the study are summarized in Table B-1 . Generally, the 2015 survey found that women and men were victimized at about the same rate over their lifetime. Over one-third (36%) of women and more than one-third (34%) of men in the United States reported that they experienced sexual violence, physical violence, and/or stalking by an intimate partner in their lifetimes. However, women were more likely than men to experience certain types of intimate partner violence, including contact sexual violence (18% vs. 8%), stalking (10% vs. 2%), and severe physical violence (21% vs. 15%). Women were also much more likely than men to report an impact related to partner violence over their lifetimes (25% vs 11%). Such impacts included having injuries, being fearful, being concerned for their safety, missing work or school, needing medical care, or needing help from law enforcement. Women and men of color, particularly individuals who are multiracial, tended to experience domestic violence at higher lifetime rates. As reported in the 2010 NISVS, women who are multiracial (57%) were most likely to report contact sexual violence, physical violence, and/or stalking by an intimate partner, followed by American Indian or Alaska Native women (48%), black women (45%), white women (37%), Hispanic women of any race (34%), and Asian or Pacific Islander women (18%). Among men, those who were black (40%) and multiracial (39%) were more likely to experience intimate partner violence than white (32%) and Hispanic (29%) men; estimates were not reported for American Indian or Alaska Native or Asian or Pacific Islander males because the data were unreliable. The 2010 NISVS examined the prevalence of this violence based on how adult respondents identified their sexual orientation (heterosexual or straight, gay or lesbian, or bisexual). The study found that overall, bisexual women had significantly higher lifetime prevalence of sexual violence, physical violence, and stalking by an intimate partner when compared to both lesbian and heterosexual women. The 2010 NISVS also surveyed women on active duty in the military and the wives of active duty men. These women were asked to respond to whether they experienced intimate partner violence over their lifetime and during the four years prior to the survey. The study found that the majority of women affiliated with the military were significantly less likely to be victims of intimate partner violence compared to women in the general population. However, active duty women who were deployed during the three years prior to the survey were significantly more likely to have experienced intimate partner violence during this period and over their lifetime compared to active duty women who were not deployed. Among those who deployed, 12% had been victims of physical violence, rape, or stalking by an intimate partner during the past three years and 35% had experienced victimization over their lifetime. This is compared to 10% (during the past three years) and 28% (lifetime prevalence) of women who had not deployed. The National Crime Victimization Survey is a survey coordinated by DOJ's Bureau of Justice Statistics within the Office of Justice Programs. NCVS surveys a nationally representative sample of households. It is the primary source of information on the characteristics of criminal nonfatal victimization and on the number and types of crimes that may or may not be reported to law enforcement authorities. NCVS surveyed respondents about whether they have been victims of a violent crime, including rape/sexual assault, robbery, aggravated assault, and simple assault; and for victims, the relationship to the perpetrator. The survey reports the share of crimes that are committed by an intimate partner (current or former spouses, boyfriends, or girlfriends), other family members, friends/acquaintances, or strangers. The survey found that nearly 600,000 individuals were victims of intimate partner violence in 2016. An earlier NCVS study examined changes in the rate of intimate partner violence over time. The study found that the number of female victims of domestic violence declined from 1.8 million in 1994 to about 621,000 in 2011. Over this period, the rate of serious intimate partner violence—rape or sexual assault, robbery, and aggravated assault—declined by 72% for females and 64% for males. Approximately 4% of females and 8% of males who were victimized by intimate partners were shot at, stabbed, or hit with a weapon over the period from 2002 through 2011. Domestic violence is associated with multiple negative outcomes for victims, including mental and emotional distress and health effects. The 2015 NISVS study found that these effects appeared to be greater for women. About 1 in 4 women (25.1%) and 1 in 10 men (10.9%) who experienced sexual violence, physical violence, and/or stalking by an intimate partner in their lifetime reported at least one impact as a result of this violence, including being fearful; being concerned for their safety or having an injury or need for medical care; needing help from law enforcement; missing at least one day of work; or missing at least one day of school. Early marriage laws in the United States permitted men to hit their wives, and throughout much of the 20 th century family violence remained a hidden problem. Victims, mostly women, often endured physical and emotional abuse in silence. These victims were hesitant to seek help because of fear of retaliation by their spouses/partners and concerns about leaving their homes, children, and neighborhoods behind. Women were worried that they would be perceived as deviant or mentally unstable or would be unable to get by financially. In addition, victims were often blamed for their abuse, based on stereotypical notions of women (e.g., demanding, aggressive, and frigid, among other characteristics). In the 1960s, shelters and services for victims of domestic violence became available on a limited basis; however, these services were not always targeted specifically to victims per se. Social service and religious organizations provided temporary housing for displaced persons generally, which could include homeless and abused women. In addition, a small number of organizations provided services to abused women who were married to alcoholic men. Beginning in the 1970s, the "battered women's movement" began to emerge; it sought to heighten awareness of women who were abused by spouses and partners. The movement developed from influences both abroad and within the United States. In England, the first battered women's shelter, Chiswick Women's Aid, galvanized support to establish similar types of services. In addition, the feminist movement in the United States increasingly brought greater national attention to the issue. As part of the battered women's movement, former battered women, civic organizations, and professionals opened shelters and began to provide services to victims, primarily abused women and their children. Shelters were most often located in old homes, at Young Women's Christian Association (YWCA) centers, or housed in institutional settings, such as motels or abandoned orphanages. In addition to providing shelter, groups in the battered women's movement organized coalitions to combine resources for public education on the issue, support groups for victims, and services that were lacking. For example, the YWCA and Women in Crisis Can Act formed a hotline for abused women in Chicago. These and other groups convened the Chicago Abused Women's Coalition to address concerns about services for battered women. The coalition spoke to hundreds of community groups and professional agencies about battered women's stories, explained the significance of violence, detailed how violence becomes sanctioned, dispelled common myths, and challenged community members to provide funding and other support to assist abused women. The coalition mobilized around passage of a state law to protect women and require police training on domestic violence, among other accomplishments. Based on a survey in the late 1970s, 111 shelters were believed to be operating across all states and in urban, suburban, and rural communities. These shelters generally reported that they provided a safe and secure environment for abused women and their children, emotional support and counseling for abused women, and information on legal rights and assistance with housing, among other supports. Approximately 90 of these shelters fielded over 110,000 calls for assistance in a given year. Around this same time, the public became increasingly aware of domestic violence. In 1983, Time magazine published an article, "Wife Beating: The Silent Crime," as part of a series of articles on violence in the United States. The article stated: "There is nothing new about wife beating…. What is new is that in the U.S. wife beating is no longer widely accepted as an inevitable and private matter. The change in attitude, while far from complete, has come about in the past 10 to 15 years as part of the profound transformation of ideas about the roles and rights of women in society." In 1984, then-U.S. Attorney General Benjamin Civiletti established the Department of Justice Task Force on Family Violence, which issued a report examining the scope and impact of domestic violence in America. The report also provided recommendations to improve the nation's law enforcement, criminal justice, and community response to offenses that were previously considered "family matters." Largely as a result of efforts by advocates and the Justice Department, Congress began to take an interest in domestic violence issues. The House Select Committee on Children, Youth, and Families conducted a series of hearings in 1983 and 1984 on child abuse and family violence throughout the country, to understand the scope of family violence better and explore possible federal responses to the problem. The committee heard from victims, domestic violence service providers, researchers, law enforcement officials, and other stakeholders about the possible number of victims and the need for additional victim services. In 1984, the Family Violence Prevention and Services Act (FVPSA) was enacted as Title III of the Child Abuse Amendments of 1984 ( P.L. 98-457 ). Title I of that law amended the Child Abuse Prevention and Treatment Act (CAPTA), and most of the seven subsequent reauthorizations of FVPSA have occurred as part of legislation that reauthorized CAPTA. This includes the most recent reauthorization ( P.L. 111-320 ), which extended funding authority for FVPSA through FY2015. As discussed later in this report, Congress subsequently broadened the federal response to domestic violence with the enactment of the Violence Against Women Act of 1994. As originally enacted, FVPSA included both a social service and law enforcement response to preventing and responding to domestic violence. Grants were authorized for states, territories, and Indian tribes to establish and expand programs to prevent domestic violence and provide shelter for victims. In addition, the law authorized grants to provide training and technical assistance to law enforcement personnel, and this funding was ultimately used to train law enforcement personnel throughout the country. From FY1986 through FY1994, funding for these grants was transferred from HHS to DOJ, which carried out the grants under the Office for Victims of Crime (OVC). DOJ funded 23 projects to train law enforcement officers on domestic violence policies and response procedures, with approximately 16,000 law enforcement officers and other justice system personnel from 25 states receiving this training. The training emphasized officers as participants working with other agencies, victims, and community groups in a coordinated response to domestic violence. Over time, FVPSA was expanded to include support of other activities, including state domestic violence coalitions and grants that focus on prevention activities; however, authorization of funding for FVPSA law enforcement training grants was discontinued in 1992, just before the Violence Against Women Act of 1994 authorized a similar purpose. Specifically, VAWA authorizes training and support of law enforcement officials under the Services, Training, Officers, and Prosecutors (STOP) Grant program. As outlined in Figure 1 , FVPSA currently authorizes three major activities: domestic violence prevention activities under a program known as DELTA; the national domestic violence hotline; and domestic violence shelters, services, and program support. The CDC administers the DELTA program. The Family and Youth Services Bureau (FYSB) in HHS/ACF administers funding for the hotline and the domestic violence shelters and support. Authorization of funding under FVPSA has been extended multiple times, most recently through FY2015 by the CAPTA Reauthorization Act of 2010 ( P.L. 111-320 ). Congress has appropriated funding in subsequent years. Table 1 includes actual funding from FY1993 to FY2018, which includes reductions in some years, and appropriated funding for FY2019 for the three major FVPSA activities. Congress appropriated just over $180 million for FY2019, the highest total to date. Since 1994, FVPSA has authorized the HHS Secretary to award cooperative agreements to state domestic violence coalitions that coordinate local community projects to prevent domestic violence, including such violence involving youth. Congress first awarded funding for prevention activities in FY1996 under a pilot program carried out by the Centers for Disease Control and Prevention. The pilot program was formalized in 2002 under a program now known as the Domestic Violence Prevention Enhancement and Leadership Through Alliances (DELTA) program. The focus of DELTA is preventing domestic violence before it occurs, rather than responding once it happens or working to prevent its recurrence. The program has had four iterations: DELTA, which was funded from FY1996 through FY2012 and involved 14 states; DELTA Prep, which extended from FY2008 through FY2012 and involved 19 states that had not received the initial DELTA funds; DELTA FOCUS, which extended from FY2013 through FY2017 and involved 10 states, all of which had previously received funding under DELTA or DELTA Prep; and DELTA Impact, which began with FY2018 and involves 10 states, all of which except one has previously received DELTA funding. As originally implemented, the program provided funding and technical assistance to 14 state domestic violence coalitions to support local efforts to carry out prevention strategies and work at the state level to oversee these strategies. Local prevention efforts were referred to as coordinated community responses (CCRs). The CCRs were led by domestic violence organizations and other stakeholders across multiple sectors, including law enforcement, public health, and faith-based organizations. For example, the Michigan Coalition Against Domestic and Sexual Violence supported two CCRs—the Arab Community Center for Economic and Social Services and the Lakeshore Alliance Against Domestic and Sexual Violence—that focused on faith-based initiatives. Both CCRs held forums that provided resources and information about the roles of faith leaders in preventing the first-time occurrence of domestic violence. The 14 state domestic violence coalitions developed five- to eight-year domestic violence prevention plans known as Intimate Partner Violence Prevention Plans. These plans were developed with multiple stakeholders, and they discuss the strategies needed to prevent first-time perpetration or victimization and to build the capacity to implement these strategies. The CDC issued a brief that summarizes the plans and identifies the successes and challenges for state domestic violence coalitions in supporting and enhancing intimate partner violence prevention efforts. Overall, the report found that states improved their capacity to respond to intimate partner violence through evidence-based planning and implementation strategies. DELTA Prep was a project that extended from FY2008 through FY2012, and was a collaborative effort among the CDC, the CDC Foundation, and the Robert Wood Johnson Foundation. Through DELTA Prep, the CDC extended the DELTA Program to 19 states that did not receive the initial DELTA funds. State and community leaders in these other states received training and assistance in building prevention strategies, based on the work of the 14 state domestic violence coalitions that received DELTA funds. DELTA Prep states integrated primary prevention strategies into their work and the work of their partners, and built leadership for domestic violence prevention in their states. DELTA FOCUS (Focusing on Outcomes for Communities United within States) continued earlier DELTA work. From FY2013 through FY2017, DELTA FOCUS funded 10 state domestic violence coalition grantees to implement and evaluate strategies to prevent domestic violence. Funding was provided by the coalitions to 18 community response teams that engaged in carrying out these strategies. DELTA FOCUS differed from DELTA and DELTA Prep by placing greater emphasis on implementing prevention strategies rather than building capacity for prevention. DELTA FOCUS also put more emphasis on evaluating the program to help build evidence about effective interventions. DELTA Impact, which began in FY2018, provides funding to 10 state domestic violence coalitions. This grant supports community response teams in decreasing domestic violence risk factors and increasing protective factors by implementing prevention activities that are based on the best available evidence. Grantees are implementing and evaluating policy efforts under three broad strategies to address domestic violence prevention: (1) engaging influential adults and peers, including by engaging men and boys as allies in prevention; (2) creating protective environments, such as improving school climates and safety; and (3) strengthening economic supports for families. As amended by the Violence Against Women Act (VAWA) of 1994, FVPSA directs the HHS Secretary to award a grant to one or more private entities to operate a 24-hour, national, toll-free hotline for domestic violence. Since 1996, HHS has competitively awarded a cooperative agreement to the National Council on Family Violence in Texas to operate the National Domestic Violence Hotline (hereinafter, hotline). The agreement was most recently awarded for a five-year period that extends through the end of FY2020. FVPSA requires that the hotline provide information and assistance to adult and youth victims of domestic violence, family and household members of victims of such violence, and "persons affected by victimization." This includes support related to domestic violence, children exposed to domestic violence, sexual assault, intervention programs for abusive partners, and related issues. As required under FVPSA, the hotline carries out multiple activities: It employs, trains, and supervises personnel to answer incoming calls; provides counseling and referral services; and directly connects callers to service providers. In FY2018, the hotline received about 23,000 calls each month and responded to 74% of all calls. It also had an average of nearly 4,000 online chats on a monthly basis. HHS reported that some calls were missed due to increased media coverage of domestic violence, increased Spanish chat services, and forwarding of calls from local domestic violence hotlines due to severe weather. It maintains a database of domestic violence services for victims throughout the United States, including information on the availability of shelter and services. It provides assistance to meet the needs of special populations, including underserved populations, individuals with disabilities, and youth victims of domestic violence and dating violence. The hotline provides access to personnel for callers with limited English proficiency and persons who are deaf and hard of hearing. Since 2007, the hotline has operated a separate helpline for youth victims of domestic violence, the National Dating Abuse Helpline (known as loveisrespect.org), which is funded through the appropriation for the hotline. This helpline offers real-time support primarily from peer advocates trained to provide support, information, and advocacy to those involved in abusive dating relationships, as well as others who support victims. In FY2018, the helpline received a monthly average of about 2,400 calls; 4,000 online chats; and nearly 1,300 texts. A 2019 study of these two lines examined a number of their features, including who contacts the lines, the study needs and demographic characteristics of those contacts, how contacts reach the lines, and the type of support they receive. The study found that nearly half (48%) the contacts were victims/survivors and another 39% did not identify themselves. The remaining contacts were from family/friends, abusers, and service providers. According to the study, the service most commonly provided to contactors was emotional support and contactors valued this support highly. The National Domestic Violence Hotline has collaborated with the National Indigenous Women's Resource Center to develop and fund the StrongHearts Native Helpline for Native American survivors of domestic abuse. The helpline uses the technology and infrastructure of the hotline, and draws from the National Indigenous Women's Resource Center to provide Native-centered, culturally appropriate services for survivors and others. Funding for shelter, support services, and program support (hereinafter, shelter and services) encompasses multiple activities: formula grants to states and territories; grants to tribes; state domestic violence coalitions; national and special issue resource centers, including those that provide technical assistance; specialized services for abused parents and children exposed to domestic violence; and program support and administration. Figure 2 shows FY2018 allocations for activities included as part of shelter, support services, and program support. The following sections of the report provide further information about grants to states, territories, and tribes; and state domestic violence coalitions. In addition, the report provides information about national and special issue resource centers. The section of the report on services for children and youth exposed to domestic violence includes information about FY2018 and earlier support for specialized services for abused parents and children exposed to domestic violence. No less than 70% of FVPSA appropriations for shelter and services must be awarded to states and territories through a formula grant. The formula grant supports the establishment, maintenance, and expansion of programs and projects to prevent incidents of domestic violence and to provide shelter and supportive services to victims of domestic violence. Each of the territories—Guam, American Samoa, U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands—receives no less than one-eighth of 1% of the appropriation, or, in combination, about one-half of 1% of the total amount appropriated. Of the remaining funds, states (including the District of Columbia and Puerto Rico) receive a base allotment of $600,000 and additional funding based on their relative share of the U.S. population. Appendix C provides formula funding for FY2018 and FY2019 by state and territory. In addition, no less than 10% of FVPSA appropriations for shelter and services are awarded to Indian tribes. Indian tribes have the option to authorize a tribal organization or a nonprofit private organization to submit an application for and to administer FVPSA funds. In applying for grant funding, states and territories (hereinafter, states) must make certain assurances pertaining to the use and distribution of funds and to victims. Nearly all of the same requirements that pertain to states and territories also pertain to tribes. States may use up to 5% of their grant funding for state administrative costs. The remainder of the funds are used to make subgrants to eligible entities for community-based projects (hereinafter, subgrantees) that meet the goals of the grant program. No less than 70% of subgrant funding is to be used to provide temporary shelter and related supportive services, which include the physical space in which victims reside as well as the expenses of running shelter facilities. No less than 25% of subgrant funding is to be used for the following supportive services and prevention services: assisting in the development of safety plans, and supporting efforts of victims to make decisions about their ongoing safety and well-being; providing individual and group counseling, peer support groups, and referrals to community-based services to assist victims and their dependents in recovering from the effects of domestic violence; providing services, training, technical assistance, and outreach to increase awareness of domestic violence and increase the accessibility of these services; providing culturally and linguistically appropriate services; providing services for children exposed to domestic violence, including age-appropriate counseling, supportive services, and services for the nonabusing parent that support that parent's role as caregiver (which may include services that work with the nonabusing parent and child together); providing advocacy, case management services, and information and referral services concerning issues related to domestic violence intervention and prevention, including providing assistance in accessing federal and state financial assistance programs; legal advocacy; medical advocacy, including provision of referrals for appropriate health care services (but not reimbursement for any health care services); assistance in locating and securing safe and affordable permanent housing and homelessness prevention services; and transportation, child care, respite care, job training and employment services, financial literacy services and education, financial planning, and related economic empowerment services; providing parenting and other educational services for victims and their dependents; and providing prevention services, including outreach to underserved populations. States must also provide assurances that they will consult with and facilitate the participation of state domestic violence coalitions in planning and monitoring the distribution of grants and administering the grants (the role of state domestic violence coalitions is subsequently discussed further). States must describe how they will involve community-based organizations, whose primary purpose is to provide culturally appropriate services to underserved populations, including how such organizations can assist states in meeting the needs of these populations. States must further provide assurances that they have laws or procedures in place to bar an abuser from a shared household or a household of the abused persons, which may include eviction laws or procedures, where appropriate. Such laws or procedures are generally enforced by civil protection orders, or restraining orders to limit the perpetrators' physical proximity to the victim. In funding subgrantees, states must "give special emphasis" to supporting community-based projects of "demonstrated effectiveness" carried out by nonprofit organizations that operate shelters for victims of domestic violence and their dependents; or that provide counseling, advocacy, and self-help services to victims. States have discretion in how they allocate their funding, so long as they provide assurances that grant funding will be distributed equitably within the state and between urban and rural areas of the state. Subgrantees that receive funding must provide a nonfederal match—of not less than $1 for every $5 of federal funding—directly from the state or through donations from public or private entities. The matching funds can be in cash or in kind. Further, federal funds made available to a state must supplement, and not supplant, other federal, state, and local public funds expended on services for victims of domestic violence. States have two years to spend funds. For example, funds allotted for FY2019 may be spent in FY2019 or FY2020. The HHS Secretary is authorized to reallocate the funds of a state, by the end of the sixth month of a fiscal year that funds are appropriated, if the state fails to meet the requirements of the grant. The Secretary must notify the state if its application for funds has not met these requirements. State domestic violence coalitions are permitted to help determine whether states are in compliance with these provisions. States are allowed six months to correct any deficiencies in their application. In FY2017, programs funded by grants for states and tribes supported over 240,000 clients in residential settings and more than 1 million clients in nonresidential settings. Nearly 93% of clients reported that they had improved knowledge of planning for their safety. Also in FY2017, programs were not able to meet 226,000 requests for shelter. The grant for states addresses the individual characteristics and privacy of participants and shelters. Both states and subgrantees funded under FVPSA may not deny individuals from participating in support programs on the basis of disability, sex, race, color, national origin, or religion (this also applies to FPVSA-funded activities generally). In addition, states and subgrantees may not impose income eligibility requirements on individuals participating in these programs. Further, states and subgrantees must protect the confidentiality and privacy of victims and their families to help ensure their safety. These entities are prohibited from disclosing any personally identifying information collected about services requested, and from revealing personally identifying information without the consent of the individual, as specified in the law. If disclosing the identity of the individual is compelled by statutory or court mandate, states and subgrantees must make reasonable attempts to notify victims, and they must take steps to protect the privacy and safety of the individual. States and subgrantees may share information that has been aggregated and does not identify individuals, and information that has been generated by law enforcement and/or prosecutors and courts pertaining to protective orders or law enforcement and prosecutorial purposes. In addition, the location of confidential shelters may not be made public, except with written authorization of the person(s) operating the shelter. Subgrantees may not provide direct payment to any victim of domestic violence or the dependent(s) of the victim. Further, victims must be provided shelter and services on a voluntary basis. In other words, providers cannot compel or force individuals to come to a shelter, participate in counseling, etc. Since 1992, FVPSA has authorized funding for state domestic violence coalitions (SDVCs). A SDVC is defined under the act as a statewide nongovernmental, nonprofit private domestic violence organization that (1) has a membership that includes a majority of the primary-purpose domestic violence service providers in the state; (2) has board membership that is representative of domestic violence service providers, and that may include representatives of the communities in which the services are being provided; (3) has as its purpose to provide education, support, and technical assistance to such service providers so they can maintain shelter and supportive services for victims of domestic violence and their dependents; and (4) serves as an information clearinghouse and resource center on domestic violence for the state and supports the development of policies, protocols, and procedures to enhance domestic violence intervention and prevention in the state. Funding for SDVCs is available for each of the 50 states, the District of Columbia, Puerto Rico, and four territories (American Samoa, Guam, Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands). Each jurisdiction has one SDVC, and these coalitions are designated by HHS. Funding is divided evenly among these 56 jurisdictions. SDVCs must use FVPSA funding for specific activities, as follows: working with local domestic violence service programs and providers of direct services to encourage appropriate and comprehensive responses to domestic violence against adults or youth within the state, including providing training and technical assistance and conducting needs assessments; participating in planning and monitoring the distribution of subgrants and subgrant funds within the state under the grant program for states and territories; working in collaboration with service providers and community-based organizations to address the needs of domestic violence victims and their dependents who are members of racial and ethnic minority populations and underserved populations; collaborating with and providing information to entities in such fields as housing, health care, mental health, social welfare, or business to support the development and implementation of effective policies, protocols, and programs that address the safety and support needs of adult and youth victims of domestic violence; encouraging appropriate responses to cases of domestic violence against adult and youth victims, including by working with judicial and law enforcement agencies; working with family law judges, criminal court judges, child protective service agencies, and children's advocates to develop appropriate responses to child custody and visitation issues in cases of children exposed to domestic violence, and in cases where this violence is concurrent with child abuse; providing information to the public about prevention of domestic violence and dating violence, including information targeted to underserved populations; and collaborating with Indian tribes and tribal organizations (and Native Hawaiian groups or communities) to address the needs of Indian (including Alaska Native) and Native Hawaiian victims of domestic dating violence, as applicable in the state. As originally enacted, FVPSA authorized a national information and research clearinghouse on the prevention of domestic violence. As part of the act's reauthorization in 1992, the language about the clearinghouse was struck and replaced with authorization for resource centers on domestic violence, including special issue resource centers to address key areas of domestic violence. Reauthorization of FVPSA in 2010 added authorization for a national resource center on American Indian women and three culturally specific resources, which had previously been funded through discretionary funds. The 2010 law also authorized special issue resource centers that provide training and technical assistance on domestic violence intervention and prevention topics and state resource centers to address disparities in domestic violence in states with high proportions of Indian (including Alaska Native) or Native Hawaiian populations. In total, HHS administers grants for 14 training and technical assistance centers that are funded by the FVPSA appropriation for shelter, services, and support. The purpose of these resource centers is to provide information, training, and technical assistance on domestic violence issues. This assistance is provided by nonprofit organizations and other entities to multiple stakeholders—individuals, organizations, governmental entities, and communities—so that they can improve their capacity for preventing and responding to domestic violence. Teenagers may be exposed to violence in their dating relationships. The CDC reports that on an annual basis, 1 in 9 female teens and 1 in 13 male teens experienced physical dating violence involving a person who hurts or tries to hurt a partner by hitting, kicking, or using another type of physical force. Further, over 1 in 7 female teens and nearly 1 in 19 male teens reported experiencing sexual dating violence in the last year, which includes forcing or attempting to force a partner to take part in a sexual act, sexual touching, or a nonphysical sexual event (e.g., sexting) when the partner does not or cannot consent. The FVPSA statute references dating violence throughout and uses the definition of "dating violence" that is in VAWA. The term is defined as violence committed by a person who is or has been in a social relationship of a romantic or intimate nature with the victim, and where the existence of the relationship is determined based on the length, type, and frequency of interaction between the persons in it. Domestic violence shelters and supportive services funded by FVPSA are intended for adult victims and their children if they accompany the adult into shelter. The law does not explicitly authorize supports for youth victims of dating violence who are unaccompanied by their parents; however, the law does not limit eligibility for shelter and services based on age. Access to domestic violence shelters and supports for teen victims, including protective orders against abusers, varies by state. The primary source of support for teen victims under FVPSA is provided via the National Domestic Violence Hotline. The hotline includes the loveisrespect helpline and related online resources. Youth victims can call, chat, or text with peer advocates for support. The loveisrespect website includes a variety of materials that address signs of abuse and resources for getting help. FVPSA references children exposed to domestic violence, but does not define related terminology. According to the research literature, this exposure can include children who see and/or hear violent acts, are present for the aftermath (e.g., seeing bruises on a mother's body, moving to a shelter), or live in a house where domestic violence occurs, regardless of whether they see and/or hear the violence. A frequently cited estimate is that between 10% and 20% of children (approximately 7 million to 10 million children) are exposed to adult domestic violence each year. The literature about the impact of domestic violence is evolving. The effects of domestic violence on children can range from little or no effect to severe psychological harm and physical effects, depending on the type and severity of abuse and protective factors, among other variables. Multiple FVPSA activities address children exposed to domestic and related violence: One of the purposes of the formula grant program for states is to provide specialized services (e.g., counseling, advocacy, and other assistance) for these children. The National Resource Center on Domestic Violence is directed to offer domestic violence programs and research that include both victims and their children exposed to domestic violence. The national resource center that addresses mental health and trauma issues is required to address victims of domestic violence and their children who are exposed to this violence. State domestic violence coalitions must, among other activities, work with the legal system, child protective services, and children's advocates to develop appropriate responses to child custody and visitation issues in cases involving children exposed to domestic violence. In addition to these provisions, the FVPSA statute authorizes funding for specialized services for abused parents and their children. FVPSA activities for children exposed to domestic violence have also been funded through discretionary funding and funding leveraged through a semipostal stamp. Since 2003, FVPSA has specified that funding must be set aside for activities to address children exposed to domestic violence if the appropriation for shelter, victim services, and program support exceeds $130 million. Under current law, if funding is triggered, HHS must first reserve not less than 25% of funding above $130 million to make grants to a local agency, nonprofit organization, or tribal organization with a demonstrated record of serving victims of domestic violence and their children. These funds are intended to expand the capacity of service programs and community-based programs to prevent future domestic violence by addressing the needs of children exposed to domestic violence. Funding has exceeded $130 million in FY2010 and FY2014 through FY2019. In FY2010, funding for shelter and services was just over $130 million. HHS reserved the excess funding as well as FVPSA discretionary funding (under shelter, victim services, and program support) to fund specialized services for children through an initiative known as Expanding Services for Children and Youth Exposed to Domestic Violence. HHS also used discretionary money to fund the initiative in FY2011 and FY2012. Total funding for the initiative was $2.5 million. This funding was awarded to five grantees—four state domestic violence coalitions and one national technical assistance provider—to expand supports to children, youth, and parents exposed to domestic violence and build strategies for serving this population. For example, the Alaska Network on Domestic Violence and Sexual Assault, the state domestic violence coalition for Alaska, used the funding to improve coordination between domestic violence agencies and the child welfare system. Their work involved developing an integrated training curriculum and policies, and creation of a multidisciplinary team of child welfare and domestic violence stakeholders in four communities. Funding again exceeded $130 million in each of FY2014 through FY2019, thereby triggering the set-aside. In FY2014 and FY2015, HHS directed the extra funding for shelter, services, and support. In FY2016 through FY2018, HHS provided funding for specialized services for abused parents and their children and expects to continue such funding for FY2019. Of the approximately $20 million in excess funding for each of these three years, approximately $5.0 million to $5.6 million was allocated in each year for these services. This recent funding has been allocated to 12 grantees to provide direct services under the grant, Specialized Services for Abused Parents and their Children (SSPAC). Grantees include domestic violence coalitions and other entities. They are working to alleviate trauma experienced by children who are exposed to domestic violence, support enhanced relationships between these children and their parents, and improve systemic responses to such families. A separate grant of $500,000 annually—known as Expanding Services to Children, Youth, and Abused Parents (ESCYAP)—has been awarded to the nonprofit organization Futures Without Violence to provide training and technical assistance to the 12 grantees and facilitate coordination among them. In addition to the Child Abuse Prevention and Treatment Act (CAPTA), FVPSA has been reauthorized by VAWA and shares some of that law's purposes. In addition, FVPSA interacts with the Victims of Crime Act (VOCA) because some FVPSA-funded programs receive VOCA funding to provide legal and other assistance to victims. Further, FVPSA includes provisions that encourage or require HHS to coordinate FVPSA programs with related programs and research carried out by other federal agencies. FVPSA does not focus on child abuse per se; however, in enacting FVPSA as part of the 1984 amendments to CAPTA, some Members of Congress and other stakeholders noted that child abuse and neglect and intimate partner violence are not isolated problems, and can arise simultaneously. The research literature has focused on this association. In a national study of children in families who come into contact with a public child welfare agency through an investigation of child abuse and neglect, investigative caseworkers identified 28% of the children's households as having a history of domestic violence against the caregiver and 12% of those caregivers as being in active domestic violence situations. Further, about 1 out of 10 of the child cases of maltreatment reported included domestic violence. CAPTA provides funding to states to improve their child protective services (CPS) systems. It requires states, as a condition of receiving certain CAPTA funds, to describe their policies to enhance and promote collaboration between child protective service and domestic violence agencies, among other social service providers. Other federal efforts also address the association between domestic violence and child abuse. For example, the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program supports efforts to improve the outcomes of young children living in communities with concentrations of domestic violence or child maltreatment, among other factors. The program provides grants to states, territories, and tribes for the support of evidence-based early childhood home visiting programs that provide in-home visits by health or social service professionals with at-risk families. Separately, the Family Connection Grants program, authorized under Title IV-B of the Social Security Act, provided funding from FY2009 through FY2014 to public child welfare agencies and nonprofit private organizations to help children—whether they are in foster care or at risk of entering foster care—connect (or reconnect) with birth parents or other extended kin. The funds were used to establish or support certain activities, including family group decisionmaking meetings that enable families to develop plans that nurture children and protect them from abuse and neglect, and, when appropriate, to safely facilitate connecting children exposed to domestic violence to relevant services and reconnecting them with the abused parent. In addition, HHS and the Department of Justice supported the Greenbook Initiative in the early 2000s. The Greenbook was developed from the efforts of the National Council of Juvenile and Family Court Judges, which convened family court judges and experts on child maltreatment and domestic violence. In 1999, this group developed guidelines for child welfare agencies, domestic violence providers, and dependency courts in responding to domestic violence and child abuse in a publication that came to be known as the Greenbook. Soon after, HHS and DOJ funded efforts in six communities to address domestic violence and child maltreatment by implementing guidelines from the Greenbook. The HHS-led Federal Interagency Working Group on Child Abuse and Neglect includes a Domestic Violence Subcommittee. The committee focuses on interagency initiatives that address children exposed to domestic violence and promoting information exchange and joint planning among federal agencies. FVPSA has twice been amended by VAWA. Both FVPSA and VAWA are the primary vehicles for federal support to prevent and respond to domestic violence, including children and youth who are exposed to this violence; however, FVPSA has a more singular focus on prevention and services for victims, while VAWA's unique contributions are more focused on law enforcement and legal response to domestic violence. VAWA was enacted in 1994 after Congress held a series of hearings on the causes and effects of domestic and other forms of violence against women. Some Members of Congress and others asserted that communities needed a more comprehensive response to violence against women generally—not just against intimate partners—and that perpetrators should face harsher penalties. The shortfalls of legal response and the need for a change in attitudes toward violence against women were reasons cited for the passage of the law. Since VAWA's enactment, the federal response to domestic violence has expanded to involve multiple departments and activities that include investigating and prosecuting crimes, providing additional services to victims and abusers, and educating the criminal justice system and other stakeholders about violence against women. Although VAWA also addresses other forms of violence against women and provides a broader response to domestic violence, some VAWA programs have a similar purpose to those carried out under FVPSA. Congress currently funds VAWA grant programs that address the needs of victims of domestic violence. These programs also provide support to victims of sexual assault, dating violence, and stalking. For example, like the FVPSA grant program for states, territories, and tribes, VAWA's STOP (Services, Training, Officers, Prosecutors) Violence Against Women Formula Grant program provides services to victims of domestic and dating violence (and sexual assault and stalking) that include victim advocacy designed to help victims obtain needed resources or services, crisis intervention, and advocacy in navigating the criminal and/or civil legal system. Of STOP funds appropriated, 30% must be allocated to victim services. STOP grants also support activities that are not funded under FVPSA, including for law enforcement, courts, and prosecution efforts. Another VAWA program, Transitional Housing Assistance Grants for Victims of Domestic Violence, provides transitional housing services for victims, with the goal of moving them into permanent housing. Through the grant program to states, territories, and tribes, FVPSA provides immediate and short-term shelter to victims of domestic violence and authorizes service providers to assist with locating and securing safe and affordable permanent housing and homelessness prevention services. FVPSA requires that entities receiving funds under the grant programs for states, territories, and tribes use a certain share of funding for selected activities, including assistance in accessing other federal and state financial assistance programs. One source of federal finance assistance for victims of domestic violence is the Crime Victims Fund (CVF), authorized under the Victims of Crime Act (VOCA) and administered by the Department of Justice's Office of Victims of Crime (OVC). Within the CVF, funds are available for victims of domestic violence through the Victim Compensation Formula Grants program and Victims Assistance Formula Grants program. The Victims Compensation Grants may be used to reimburse victims of crime for out-of-pocket expenses such as medical and mental health counseling expenses, lost wages, funeral and burial costs, and other costs (except property loss) authorized in a state's compensation statute. In recent years, approximately 40% of all claims filed were for victims of domestic violence. The Victims Assistance Formula Grants may be used to provide grants to state crime victim assistance programs to administer funds for state and community-based victim service program operations. The grants support direct services to victims of crime including information and referral services, crisis counseling, temporary housing, criminal justice advocacy support, and other assistance needs. In recent years, approximately 50% of victims served by these grants were victims of domestic violence. Both FVPSA, which is administered within HHS, and VAWA, which is largely administered within DOJ, require federal agencies to coordinate their efforts to respond to domestic violence. For example, FVPSA authorizes the HHS Secretary to coordinate programs within HHS and to "seek to coordinate" those programs "with programs administered by other federal agencies, that involve or affect efforts to prevent family violence, domestic violence, and dating violence or the provision of assistance for adults and youth victims of family violence, domestic violence, or dating violence." In addition, FVPSA directs HHS to assign employees to coordinate research efforts on family and related violence within HHS and research carried out by other federal agencies. Similarly, VAWA requires the Attorney General to consult with stakeholders in establishing a task force—comprised of representatives from relevant federal agencies—to coordinate research on domestic violence and to report to Congress on any overlapping or duplication of efforts on domestic violence issues. In 1995, HHS and DOJ convened the first meeting of the National Advisory Council on Violence Against Women. The purpose of the council was to promote greater awareness of violence against women and to advise the federal government on domestic violence issues. Since that time, the two departments have convened subsequent committees to carry out similar work. In 2010, then-Attorney General Eric Holder rechartered the National Advisory Committee on Violence Against Women, which had previously been established in 2006 under his predecessor. As stated in the charter, the committee is intended to provide the Attorney General and the HHS Secretary with policy advice on improving the nation's response to violence against women and coordinating stakeholders at the federal, state, and local levels in this response, with a focus on identifying and implementing successful interventions for children and teens who witness and/or are victimized by intimate partner and sexual violence. Separately, the director for FVPSA programs and the deputy director of HHS's Office on Women's Health provide leadership to the HHS Steering Committee on Violence Against Women. This committee supports collaborative efforts to address violence against women and their children, and includes representatives from the CDC and other HHS agencies. The members of the committee have established links with professional societies in the health and social service fields to increase attention on women's health and violence issues. In addition to these collaborative activities, multiple federal agencies participate in the Federal Interagency Workgroup on Teen Dating Violence, which was convened in 2006 to share information and coordinate teen dating violence program, policy, and research activities to combat teen dating violence from a public health perspective. The workgroup has funded a project to incorporate adolescents in the process for developing a research agenda to address teen dating violence. Finally, the Office of the Vice President (under Joe Biden) coordinated federal efforts to end violence against women, including by convening Cabinet-level officials to address issues concerning domestic and other forms of violence against women. Appendix A. Definitions Appendix B. Prevalence and Effects of Domestic Violence Appendix C. State and Territory Funding for Selected FVPSA Services
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Family violence broadly refers to acts of physical and sexual violence perpetrated by individuals against family members. The federal government has responded to various forms of family violence, including violence involving spouses and other intimate partners, children, and the elderly. The focus of this report is on the federal response to domestic violence under the Family Violence Prevention and Services Act (FVPSA). "Domestic violence" is used in the report to describe violence among intimate partners, including those involved in dating relationships. Generally speaking, victims tend to be women, although a sizable share of men are also victimized. A 2015 survey conducted by the Centers for Disease Control and Prevention (CDC) found that approximately one-third of women and men had experienced sexual violence, physical violence, and/or stalking in their lifetimes. It showed that women were more likely than men to have experienced contact sexual violence (18% vs. 8%), stalking (10% vs. 2%), and severe physical violence (21% vs. 15%). Women were also more likely than men to report an impact related to partner violence over their lifetimes (25% vs 11%). Such impacts included having injuries, being fearful, being concerned for their safety, missing work or school, needing medical care, or needing help from law enforcement. Throughout much of the 20th century, domestic violence remained a hidden problem. Victims, or survivors, of this abuse often endured physical and emotional abuse in silence out of fear of retaliation by their spouses or partners. In the 1970s, former battered women, civic organizations, and professionals began to open shelters and provide services to abused women and their children. As a result of these efforts and greater national attention to domestic violence, Congress conducted a series of hearings in the early 1980s to understand the scope of domestic violence and explore possible responses. FVPSA was enacted in 1984 (Title III of P.L. 98-457), and has been reauthorized seven times, most recently by the CAPTA Reauthorization Act of 2010 (P.L. 111-320). FVPSA authorizes three primary sets of activities, all of which are administered by the U.S. Department of Health and Human Services (HHS). These activities are authorized through FY2015, per P.L. 113-320, and funds have continually been appropriated in each subsequent year. FY2019 funding is $180 million. First, a national domestic violence hotline receives calls for assistance related to this violence. The hotline provides crisis intervention and counseling, maintains a database of service providers throughout the United States and the territories, and provides referrals for victims and others affected by domestic violence. Second, FVPSA funds efforts to prevent domestic violence through a program known as Domestic Violence Prevention Enhancement and Leadership Through Allies (DELTA). The program supports efforts in selected communities to prevent domestic violence. Third, FVPSA supports direct services for victims and their families, including victims in underserved and minority communities and children exposed to domestic violence. Most of this funding is awarded via grants to states, territories, and tribes, which then distribute the funds to local domestic violence service organizations. These organizations provide shelter and a number of services—counseling, referrals, development of safety plans, advocacy, legal advocacy, and other services. This funding also supports state domestic violence coalitions that provide training and support for service providers, and national resource centers that provide training and technical assistance on various domestic violence issues for a variety of stakeholders. FVPSA was the first federal law to address domestic violence. Since the law was enacted, it has continued to have a primary focus on providing shelter and services for survivors and has increasingly provided support to children exposed to domestic violence and teen dating violence. With the enactment of the Violence Against Women Act of 1994 (VAWA, P.L. 103-322), the federal response to domestic violence has expanded to include investigating and prosecuting crimes and providing additional services to victims and abusers. VAWA activities are administered by multiple federal agencies.
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Unemployment Compensation (UC) is a joint federal-state program financed by federal payroll taxes under the Federal Unemployment Tax Act (FUTA) and by state payroll taxes under State Unemployment Tax Acts (SUTA). These revenues are deposited into the appropriate account within the federal Unemployment Trust Fund (UTF). Originally, the intent of the UC program, among other goals, was to help counter economic fluctuations such as recessions. This intent is reflected in the current UC program's funding and benefit structure. When the economy grows, UC program revenue rises through increased tax revenues. At the same time, UC program spending falls because fewer workers are unemployed. The effect of collecting more taxes while decreasing spending on benefits dampens demand in the economy. It also creates a surplus of funds, or a reserve fund , for the UC program to draw upon during a recession. These reserve balances are credited in the state's account within the UTF. During an economic slowdown or recession, UC tax revenue falls and UC program spending rises as more workers lose their jobs and receive UC benefits. The increased amount of UC payments to unemployed workers dampens the economic effect of lost earnings by injecting additional funds into the economy. States levy their own payroll taxes (SUTA) on employers to fund regular UC benefits and the state share (50%) of the Extended Benefit (EB) program. Federal laws and regulations provide broad guidelines for these state taxes. Each state deposits its SUTA revenue into its account within the UTF. SUTA revenue finances UC benefits. Generally, when economic activity is robust and increasing, SUTA revenue is greater than a state's UC expenditures. As a result, the state's reserves within the UTF grow. This trend is reversed during economic recessions and during the early economic recovery period, when the state's reserves are drawn down and new SUTA revenue does not always make up the shortfall. If the recession is deep enough and if SUTA revenue is inadequate for long periods of time, states may have insufficient funds to pay for UC benefits. Federal law, which requires states to pay these benefits, provides a loan mechanism within the UTF framework that an insolvent state may opt to use to meet its UC benefit payment obligations. States must pay back these loans. If the loans are not paid back quickly (depending on the timing of the beginning of the loan period), states may face interest charges and the states' employers may face increased net FUTA rates until the loans are repaid. In the years immediately following the most recent recession, many states had insufficient SUTA revenue and UTF account balances to pay UC benefits. All FUTA revenue is deposited into the Employment Security Administration Account (ESAA) within the UTF. Federal unemployment taxes pay for the federal share of EB (50%) and for administrative grants to the states. Additionally, through the federal loan account within the UTF, FUTA funds may be loaned to insolvent states to assist the payment of the states' UC obligations. FUTA imposes a 6.0% gross federal unemployment tax rate on the first $7,000 paid annually by employers to each employee. Employers in states with programs approved by the U.S. Labor Secretary and with no outstanding federal loans may credit up to 5.4 percentage points of state unemployment taxes paid against the 6.0% tax rate, making the minimum net federal unemployment tax rate 0.6%. Because most employees earn more than the $7,000 taxable wage ceiling in a calendar year, the FUTA tax typically is $42 per worker per year ($7,000 × 0.6%), or just over 2 cents per hour for a full-time, year-round worker. States have a great deal of autonomy in how they establish and run their unemployment insurance programs. However, the framework established by federal laws is clear and requires states to promptly pay the UC benefits as provided under state law. In budgetary terms, UC benefits are an entitlement (although the program is financed by a dedicated tax imposed on employers and not by general revenue). Thus, even if a recession hits a given state and, as a result, that state's trust fund account is depleted, the state remains legally required to continue paying benefits. To do so, the state might borrow money either from the dedicated loan account within the UTF or from outside sources. If the state chooses to borrow funds from the UTF, not only will the state be required to continue paying benefits, it also will be required to repay the funds (plus any interest due) it has borrowed from the federal loan account within a few years. Such states may need to raise taxes on their employers or reduce UC benefit levels, actions that dampen economic growth, job creation, and consumer demand. In short, states have strong incentives to keep adequate funds in their trust fund accounts. If the state borrows from sources outside the UTF, the state would not be subject to the loan restrictions described below. Instead, the state would be subject to the terms within that outside loan agreement, which might offer a different (more favorable) interest rate or repayment schedule but may include fees to establish the loan. The Federal Unemployment Account (FUA) is the federal loan account within the UTF. The FUA is primarily funded from the statutory transfer of excess revenue from the Extended Unemployment Compensation Account (EUCA) being deposited into the FUA. If needed, the FUA may borrow funds from other federal accounts within the UTF or from the general fund of the U.S. Treasury. From FY2009 to FY2015, the FUA had to borrow funds from the U.S. Treasury to finance loans to the state accounts. 1. Revenue from additional FUTA taxes paid by employers when a reduced credit against federal unemployment taxes exists because the state has an outstanding unpaid loan from FUA is deposited into the FUA. (See the discussion below on " Federal Tax Increases on Outstanding Loans Through Credit Reductions " for a more detailed explanation of these additional taxes.) 2. Federal law allows the FUA to borrow available funds from the other federal (EUCA and ESAA) accounts within the UTF. 3. Federal law also authorizes appropriations as loans from the general fund of the U.S. Treasury if balances in the federal accounts are insufficient to cover their expenditures. (For example, if the states' borrowing needs exceed the available FUA balance.) Such appropriations require discretionary action by Congress and the President. Once a state recognizes that it does not have sufficient funds to pay UC benefits, the mechanism for receiving a loan from the UTF is straightforward. The state's governor (or the governor's designee) must submit a letter requesting that the U.S. Labor Secretary advance funds to the state account within the UTF. Once the loan is approved by the U.S. Labor Secretary, the funds are placed into the state account in monthly increments. States with outstanding loans from the UTF must repay them fully by the November 10 following the second consecutive January 1 on which the state has an outstanding loan. If the outstanding loan is not repaid by that time, the state will face an effective federal tax increase. Thus, a state may have approximately 22 months (if borrowing began on January 1) to 34 months (if borrowing began on January 2) to repay the loan without a federal tax increase, depending on when it obtained the outstanding loan. As of January 29, 2019, approximately $68.3 million in federal UTF loans to the states were outstanding. A current list of states with outstanding loans may be found at the Department of Labor's (DOL's) website, https://oui.doleta.gov/unemploy/budget.asp . If the state does not repay a loan by November 10 of the second year, the state becomes subject to a reduction in the amount of state unemployment tax credit applied against the federal unemployment tax beginning with the preceding January 1 until the state repays the loan fully. Depending on the duration of the loan and certain other measures, one or more of three different credit reductions may be required. These reductions are fully catalogued in Table 1 . At the height of the period following the most recent recession (2011), 20 states and the Virgin Islands faced increased FUTA rates because of outstanding UTF loans. The credit reduction is initially a 0.3 percentage point reduction for the year beginning with the calendar year in which the second consecutive January 1 passes during which the loan is outstanding and increases by a 0.3 percentage point reduction for each year there is an outstanding loan. For example, in the first year, the credit reduction results in the net federal tax rate increasing from 0.6% to 0.9%—an additional $21 for each employee; in the second year, it would increase to 1.2%—a cumulative additional $42 for each employee. Two potential other credit reductions exist (in addition to the cumulative 0.3 percentage point increases) during the ensuing calendar years in which a state has an outstanding loan: 1. Beginning in the third year, the 2.7 add-on uses a statutory formula that takes into consideration the average annual wages and average employment contribution rate. 2. Beginning in the fifth year, the Benefit-Cost Ratio (BCR) add-on replaces the 2.7 add-on and uses the five-year benefit-cost rate as well as average wages in its calculation. Table 1 presents these reductions and the subsequent net FUTA tax faced by state employers as a result of these unpaid loans. If any January 1 passes without an outstanding balance, the year count starts over with the next loan. DOL maintains a list of potential reduced credit states at http://workforcesecurity.doleta.gov/unemploy/docs/reduced_credit_states.xlsx . Section 272 of P.L. 97-248 allows a delinquent state the option of repaying—on or before November 9—a portion of its outstanding loans each year through transfer of a specified amount from its account in the UTF to the FUA. If the state complies with all the requirements listed below, the potential credit reduction is avoided (there is no reduction): The state must repay all loans for the most recent one-year period ending on November 9, plus the potential additional taxes that would have been imposed for the tax year based upon a state tax credit reduction. The state must have sufficient amounts in the state account of the UTF to pay all compensation for the last quarter of that calendar year without receiving a loan. The state also must have altered its state law to increase the net solvency of its account with the UTF. From 2011 through 2014, South Carolina met these requirements. As a result, employers in South Carolina were not subject to a state tax credit reduction in the calculation of their FUTA taxes. (Generally, employers in South Carolina would have paid more in state unemployment taxes to meet these requirements.) Once a state begins to have a credit reduction, the state may apply to have the reductions capped if the state meets four criteria: No legislative or other action in 12 months ending September 30 has been taken to decrease the state's unemployment tax effort. (A state cannot actively decrease its expected state unemployment tax revenue from current law.) No legislative or other action has been taken to decrease the net solvency of the state's trust fund account. (For example, the state would not be allowed to actively increase the average UC benefit amount from current law requirements.) Average state unemployment tax rate on total wages must exceed the five-year average benefit-cost rate on total wages. Balance of outstanding loans as of September 30 must not be greater than the balance three years before. The BCR add-on may be waived if the Secretary of Labor determines the state did not take legislative or other actions to decrease the net solvency of the state's trust fund account. The 2.7 add-on would then replace the BCR add-on. The additional federal taxes attributable to the credit reduction are applied against the state's outstanding UTF loan. Thus, although technically employers are paying additional FUTA taxes, the additional tax pays off a state's debt. The state's employers will pay the additional federal taxes resulting from the credit reduction no later than January 31 of the next calendar year. Since April 1, 1982 ( P.L. 97-35 as amended), states have been charged interest on new loans that are not repaid by the end of the fiscal year in which they were obtained. (Before April 1, 1982, states could receive these loans interest free.) The interest is the same rate as that paid by the federal government on state reserves in the UTF for the quarter ending December 31 of the preceding year but not higher than 10% per annum. The interest rate for calendar year loans is determined by Section 1202(b)(4) of the Social Security Act. The interest rate for a calendar year is the earnings yield on the UTF for the quarter ending December 31 of the previous calendar year. The U.S. Treasury Department calculated the fourth-quarter earnings yield in 2018 to be 2.3081%. Thus, loans made in calendar year 2019 are subject to an interest rate of 2.3081%. States may not pay the interest directly or indirectly from SUTA revenue or funds in their state account within the UTF. If a state does not repay the interest, or if it pays the interest with funds from SUTA taxes, DOL is required by federal law to refuse to certify that state's program as being in compliance with federal law. Not being in compliance with federal unemployment law would mean that the state would not be eligible to receive administrative grants and employers in that state would not receive the state unemployment tax credit in the calculation of their federal unemployment taxes. States may borrow funds without interest from the UTF during the year. To receive these interest-free loans, the states must meet five conditions: 1. The states must repay the loans by September 30. 2. For those repaid (by September 30) loans to maintain their interest-free status, there cannot be any loans made to that state in October, November, or December of the calendar year of such an interest-free loan. If loans are made in the last quarter of the calendar year, the "interest-free" loans made in the previous fiscal year will retroactively accrue interest charges. 3. The states must meet funding goals relating to their account in the UTF, established under regulations issued by DOL. In addition to these first three requirements, the phase-in of two new requirements began in 2014. The full effect of the requirements began in 2019. 4. States must have had at least one year in the past five calendar years before the year in which advances are taken in which the Average High Cost Multiple (AHCM) was greater than or equal to 1.0. 5. Additionally, states must meet two criteria for maintenance-of-tax effort in every year from the most recent year the AHCM was at least 1.0 and the year in which loans are taken. a. The average state unemployment tax rate (total state unemployment tax amount collected over total taxable wages) was at least 80% of the prior year's rate. b. The average state unemployment tax rate was at least 75% of the average benefit-cost ratio over the preceding five calendar years, where the benefit-cost ratio for a year is defined as the amount of benefits and interest paid in the year divided by the total covered wages paid in the year. Table 2 lists outstanding state loans. (At this time, only the U.S. Virgin Islands has an outstanding loan.) The table also includes information on accrued interest payments for FY2019. The third column provides information on whether the state was subject to a credit reduction for tax year 2018. The last column provides the net FUTA tax faced by employers in each state that had an outstanding loan.
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Although states have a great deal of autonomy in how they establish and run their unemployment insurance programs, federal law requires states to pay Unemployment Compensation (UC) benefits promptly as provided under state law. During some recessions, current taxes and reserve balances may be insufficient to cover state obligations for UC benefits. States may borrow funds from the federal loan account within the Unemployment Trust Fund (UTF) to meet UC benefit obligations. This report summarizes how insolvent states may borrow funds from the UTF loan account to meet their UC benefit obligations. It includes the manner in which states must repay federal UTF loans. It also provides details on how the UTF loans may trigger potential interest accrual and explains the timetable for increased net Federal Unemployment Taxes Act (FUTA) taxes if the funds are not repaid promptly. Outstanding loans listed by state may be found at the Department of Labor's (DOL's) website, https://oui.doleta.gov/unemploy/budget.asp.
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M ost of the funding for the activities of the Department of Housing and Urban Development (HUD) comes from discretionary appropriations provided each year in annual appropriations acts, typically as a part of the Transportation, HUD, and Related Agencies appropriations bill (THUD). HUD's programs are designed primarily to address housing problems faced by households with very low incomes or other special housing needs and to expand access to homeownership. Three main rental assistance programs—Section 8 tenant-based rental assistance (which funds Section 8 Housing Choice Vouchers), Section 8 project-based rental assistance, and public housing—account for the majority of the department's funding (about 78% of total HUD appropriations in FY2018; see Figure 1 ). All three programs provide deep subsidies allowing low-income recipients to pay below-market, income-based rents. Additional, smaller programs are targeted specifically to persons who are elderly and persons with disabilities. Two flexible block grant programs—the HOME Investment Partnerships grant program and the Community Development Block Grant (CDBG) program—help states and local governments finance a variety of housing and community development activities designed to serve low-income families. Following disasters, special supplemental CDBG disaster recovery (CDBG-DR) grants are funded by Congress to help communities rebuild damaged housing and community infrastructure. Native American tribes receive their own direct housing grants through the Native American Housing Block Grant. Other, more-specialized grant programs help communities meet the needs of homeless persons, through the Homeless Assistance Grants and the Continuum of Care and Emergency Solutions Grants programs, as well as those living with HIV/AIDS. Additional programs fund fair housing enforcement activities and healthy homes activities, including lead-based paint hazard identification and remediation. HUD's Federal Housing Administration (FHA) insures mortgages made by lenders to homebuyers with low down payments and to developers of multifamily rental buildings containing relatively affordable units. FHA collects fees from insured borrowers, which are used to sustain its insurance funds. Surplus FHA funds have been used to offset the cost of the HUD budget. This In Brief report tracks progress on FY2019 HUD appropriations and provides detailed account-level, and in some cases subaccount-level, funding information ( Table 1 ) as well as a discussion of selected key issues. For more information about the Transportation, HUD, and Related Agencies appropriations bill see CRS Report R45487, Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations for FY2019: In Brief , by Maggie McCarty and David Randall Peterman. For more information on trends in HUD funding, see CRS Report R42542, Department of Housing and Urban Development (HUD): Funding Trends Since FY2002 . Figure 1. Composition of HUD's Budget, FY2018Gross Budget AuthoritySource: Prepared by CRS, based on data in Table 1.Notes: Primary rental assistance programs include Tenant-based Rental Assistance (Housing Choice Voucher Program), Public Housing Capital Fund, Public Housing Operating Fund, Choice Neighborhoods, Family Self Sufficiency Program, and Project-based Rental Assistance. Formula grants include CDBG, HOME, Homeless Assistance Grants, Housing for Persons with AIDS (HOPWA), and Native American Housing Block Grants. Other programs and activities encompass the remainder of HUD accounts. The FY2019 appropriations process spanned two Congresses, both of which took action, as summarized below. On February 12, 2018, the Trump Administration submitted its FY2019 budget request to Congress. The budget request was released before final FY2018 appropriations were enacted and shortly after enactment of the Bipartisan Budget Act of FY2018 (BBA; P.L. 115-123 ), which, among other things, increased the statutory limits on discretionary spending for FY2018 and FY2019. The President's FY2019 request proposed $41.4 billion in gross discretionary appropriations for HUD, which is the amount of new budget authority available for HUD programs and activities, not accounting for savings from offsets and other sources. That amount is about $11.3 billion (21.5%) less than was provided in FY2018. Most of that reduction ($7.7 billion) is attributable to program eliminations proposed by the President, including CDBG, HOME, Public Housing Capital Funding, Choice Neighborhoods grants, and the programs funded in the Self-Help Homeownership Opportunity Program (SHOP) account. On May 23, 2018, the House Appropriations Committee approved its version of a FY2019 THUD appropriations bill ( H.R. 6072 ; H.Rept. 115-750 ), about a week after THUD subcommittee approval (May 16, 2018). The bill included $53.2 billion in gross funding for HUD, or $43.7 billion after accounting for savings from offsets and rescissions. This is about 29% more in gross funding than was requested by the President and slightly more (1%) than was provided in FY2018. The bill did not include the program eliminations proposed by the President, and instead funded CDBG and the Public Housing Capital Fund at FY2018 levels while reducing funding for the HOME and SHOP accounts (-12% and -7%, respectively). On June 7, 2018, the Senate Appropriations Committee approved its version of a FY2019 THUD appropriations bill ( S. 3023 ; S.Rept. 115-268 ), two days after THUD subcommittee approval. It included more than $54 billion in gross funding for HUD, or $44.5 billion after accounting for savings from offsets and rescissions. This is 30% more in gross funding than was requested by the President, and about 2.5% more than was provided in FY2018. Like the House committee-passed bill, S. 3023 did not include the President's proposed program eliminations, and instead proposed funding those programs at their prior-year levels. On August 1, 2018, the Senate approved H.R. 6147 , the Financial Services Appropriations bill, which was amended to include four regular appropriations acts, including the text of S. 3023 as Division D. Several HUD-related amendments were approved during floor consideration, none of which changed funding levels. On September 28, 2018, a continuing resolution (CR) through December 7, 2018, was enacted as part of a consolidated full-year Defense and Labor, Health and Human Services, and Education spending bill ( P.L. 115-245 , Division C). The CR covered the agencies and activities generally funded under seven regular FY2019 appropriations bills that had not been enacted before the end of the fiscal year, including THUD. On December 7, 2018, the previous CR was extended through December 21, 2018 ( P.L. 115-298 ). No further funding action was completed before the expiration of the CR on December 21, 2018, and a funding lapse affecting the unfunded portions of the federal government, including HUD, commenced on December 22, 2018. Following the start of the 116 th Congress and during the funding lapse, the House passed several full-year THUD funding bills, none of which were taken up in the Senate. These include the following: H.R. 21 , an omnibus funding bill, which included THUD language identical to that which had passed the Senate in the 115 th Congress in H.R. 6147 ; H.R. 267 , a standalone THUD bill, again containing language identical to the 115 th Congress Senate-passed THUD language; and H.R. 648 , an omnibus funding bill containing provisions and funding levels characterized by the chairwoman of the House Appropriations Committee as reflecting House-Senate conference negotiations on H.R. 6147 from the 115 th Congress. (The Transportation, HUD, and Related Agencies Appropriations Act of 2019 was included as Division F.) On January 16, 2019, the House passed H.R. 268 , a supplemental appropriations bill. As passed by the House, the bill would have provided supplemental appropriations to HUD (as well as other agencies) in response to the major disasters of 2018. The bill also contained CR provisions to extend regular appropriations through February 8, 2019, for agencies and programs affected by the funding lapse. On January 24, 2019, the Senate considered H.R. 268 , the supplemental appropriations bill that previously passed the House. One amendment, S.Amdt. 5 , offered by Senator Shelby, included additional funding for border security, as well as full-year appropriations for those agencies affected by the funding lapse. The THUD provisions in Division G were identical to those that had passed the Senate in the 115 th Congress in H.R. 6147 . The Senate voted not to invoke cloture on S.Amdt. 5 on January 24, 2019. Late on January 25, 2019, a CR ( H.J.Res. 28 ; P.L. 116-5 ) was enacted, providing funding through February 15, 2019, for THUD and the six other funding bills that had not received full-year funding, allowing HUD and the other agencies that had been subject to the funding lapse to resume full operations. On February 15, 2019, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) was enacted providing full-year appropriations for the remaining agencies that had lacked full-year appropriations. The Transportation, HUD, and Related Agencies Appropriations Act of 2019 was included as Division G and its text mirrored that of H.R. 648 . The cost of renewing existing Section 8 Housing Choice Vouchers is generally one of the most high-profile HUD funding issues each year. It is the largest single expense in the largest account (the tenant-based rental assistance account) in HUD's budget. All of the roughly 2 million portable rental vouchers that are currently authorized and in use are funded annually, so for the low-income families currently renting housing with their vouchers to continue to receive assistance (i.e., renew their leases at the end of the year), new funding is needed each year. If the amount ultimately provided proves to be less than the amount needed to fund all vouchers currently in use, then several things may happen. The Public Housing Authorities (PHAs)—the state-chartered entities that administer the program at the local level—with reserve funding from prior years, may spend some of those reserves to maintain current services. PHAs without reserve funding may apply to HUD for a share of the set-aside funding that is generally provided in the annual appropriations acts to the department and allowed to be used to prevent termination of assistance. And PHAs may undertake cost-saving measures, such as not reissuing vouchers to families on their waiting lists when currently assisted families leave the program. Conversely, if the amount is greater than the amount needed to renew existing vouchers, PHAs may be able to serve additional families from their waiting lists. Although the President's budget request, the House committee-reported HUD appropriations bill, and the Senate bill all included different funding levels for voucher renewals for FY2019, each purported to provide enough to fund all vouchers currently in use. The final FY2019 enacted funding level was $22.598 billion, an amount between the House committee-reported and Senate-passed levels. Advocacy groups have estimated that the amount provided will be enough at least to renew all existing voucher holders' leases, as well as potentially serve some additional families. The low-rent public housing program houses approximately 1 million families in properties owned by local PHAs but subsidized by the federal government. PHAs' budgets for public housing are made up of rent paid by tenants and formula grant funding from the federal government to make up the difference between the rents collected from tenants and the cost of maintaining the properties. The two primary formula funding programs are Operating Fund program and Capital Fund program. Additionally, PHAs may apply for competitive Choice Neighborhood Initiative grants. The largest source of federal funding to support the low-rent public housing program is provided through the public housing Operating Fund account. Operating funds are allocated to PHAs according to a formula that estimates what it should cost PHAs to maintain their public housing properties based on the characteristics of those properties. When the amount of appropriations provided is insufficient to fully fund the amount PHAs qualify for under the formula, their allocation is prorated. Assuming the Operating Fund formula accurately reflects the costs of maintaining public housing, less than full funding means PHAs either will not be able to meet their full operating needs (e.g., maintenance, staffing, services for residents) or will have to spend down reserves they may have accumulated or seek other sources of funding. According to HUD's Congressional Budget Justifications, the amount requested in the President's budget for the Operating Fund for FY2019 (a 28% decrease from FY2018) would be sufficient to fund an estimated 54% of PHAs' formula eligibility in CY2019 (the program runs on a calendar year basis). Both the House committee-passed bill and the Senate bill proposed more funding than requested, but neither proposed the full amount the President's budget estimated would be needed to fully fund PHAs' formula eligibility in CY2019. The final HUD appropriations law provided $4.65 billion for operating funding in FY2019, which is more than the House committee-passed bill, but less than the Senate level. While it is not expected to fund 100% of formula eligibility in CY2019, the funding increase may result in a higher proration level than CY2018. The other major source of federal funding for public housing is the Capital Fund. Capital Fund formula grants are used to meet the major modernization needs of public housing, beyond the day-to-day maintenance expenses included among operating expenses. The most recent national assessment of public housing capital needs sponsored by HUD found that inadequate funding had resulted in a backlog of about $25.6 billion in capital/modernization needs across the public housing stock, with new needs accruing nationally at a rate of about $3.4 billion per year. For FY2019, the President's budget requested no funding for the Capital Fund, citing federal fiscal constraints and a desire to "strategically reduce the footprint of Public Housing." Both the House committee bill and the Senate bill would have provided funding for the Capital Fund, with H.Rept. 115-750 explicitly stating that it rejected the Administration's proposed strategic reduction of public housing. The final FY2019 appropriations law provided $2.775 billion for the Capital Fund, a $25 million increase over FY2018 funding. That $25 million is provided as a set-aside to provide grants to PHAs to address lead hazards in public housing. Similarly, the Administration's budget requested no new funding for competitive Choice Neighborhoods grants that are used to redevelop distressed public housing and other assisted housing. Both the House committee bill and the Senate bill proposed to fund the program. The House committee bill proposed even funding with FY2018 ($150 million) and the Senate bill proposed a decrease in funding relative to FY2018 (a reduction of $50 million, or 33%). The final FY2019 appropriations law funded the account at the FY2018 level of $150 million. The President's budget request included a proposal to eliminate funding for several HUD grant programs that support various affordable housing and community development activities. Most notable among these are HUD's two largest block grant programs for states and localities, CDBG and HOME, as well as competitive grants funded in the SHOP account (i.e., funding for sweat-equity programs, like Habitat for Humanity, and certain capacity building programs). These grant programs were also slated for elimination in the President's FY2018 budget request, although they were ultimately funded in FY2018. The press release accompanying the budget request suggested that the activities funded by these grant programs should be devolved to the state and local levels. Both the House committee bill and the Senate bill would have continued funding for these programs. The House committee bill would have provided level funding for CDBG, but funding reductions for the other accounts. The Senate bill would have provided level funding for all three accounts. Like the House committee and Senate bills, the final FY2019 appropriations law continued funding for all three accounts. In the case of CDBG and SHOP, it provided level funding with FY2018 at $3.365 billion and $54 million, respectively; in the case of HOME, the FY2019 law decreased funding by 8.2% relative to FY2018, bringing it down to $1.250 billion. Under the terms of the Budget Control Act, as amended, discretionary appropriations are generally subject to limits, or caps, on the amount of funding that can be provided in a fiscal year. In addition, the annual appropriations bills also are individually subject to limits on the funding within them that are associated with the annual congressional budget resolution. Congressional appropriators can keep these bills within their respective limits in a number of ways, including by providing less funding for certain purposes to allow for increases elsewhere in the bill. In certain circumstances, appropriators also can credit "offsetting collections" or "offsetting receipts" against the funding in the bill, thereby lowering the net amount of budget authority in that bill. In the THUD bill, the largest source of these offsets is generally the Federal Housing Administration (FHA). FHA generates offsetting receipts when estimates suggest that the loans that it will insure during the fiscal year are expected to collect more in fees paid by borrowers than will be needed to pay default claims to lenders over the life of those loans. While usually not as large a source, the Government National Mortgage Association (GNMA), or Ginnie Mae, generally provides significant offsets within the THUD bill as well. GNMA guarantees mortgage-backed securities made up of government-insured mortgages (such as FHA-insured mortgages) and similarly generates offsetting receipts when the associated fees it collects are estimated to exceed any payments made on its guarantee. The amount of offsets available from FHA and GNMA varies from year to year based on estimates of the amount of mortgages that FHA will insure, and that GNMA will guarantee, in a given year and how much those mortgages are expected to earn for the government. These estimates, in turn, are based on expectations about the housing market, the economy, the credit quality of borrowers, and relevant fee levels, most of which are factors outside of the immediate control of policymakers. If the amount of available offsets increases from one year to the next, then additional funds could be appropriated relative to the prior year's funding level while still maintaining the same overall net level of budget authority. If the amount of offsets decreases, however, then less funding would need to be appropriated relative to the prior year to avoid increasing the overall net level of budget authority, all else equal. For FY2019, the Congressional Budget Office (CBO) estimated that offsetting receipts available from FHA would be lower than in FY2018 ($7.6 billion compared to $8.3 billion) while the amount of offsets available from Ginnie Mae would be higher (about $2 billion compared to $1.7 billion). The total combined amount of offsets, then, was estimated at about $500 million less in FY2019 as compared to the prior year. As a result of this lower amount of offsets, the increase in net budget authority proposed in both the House committee bill and the Senate bill, as well as that ultimately provided by the final FY2019 appropriations law, as compared to FY2018 is greater than the increase in gross appropriations for HUD programs and activities.
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The programs and activities of the Department of Housing and Urban Development (HUD) are designed primarily to address housing problems faced by households with very low incomes or other special housing needs and to expand access to homeownership. Nearly all of the department's budget comes from discretionary appropriations provided each year in the annual appropriations acts, typically as a part of the Transportation, HUD, and Related Agencies appropriations bill (THUD). On February 12, 2018, the Trump Administration submitted its FY2019 budget request to Congress, including $41.4 billion in gross new budget authority for HUD (not accounting for savings from offsets or rescissions). That is about $11.3 billion (21.5%) less than was provided in FY2018. Most of that reduction ($7.7 billion) is attributable to proposed program eliminations, including Community Development Block Grants (CDBG), the HOME Investment Partnerships grant program, Public Housing Capital Funding, Choice Neighborhoods grants, and the programs funded in the Self-Help Homeownership Opportunity Program (SHOP) account. On May 23, 2018, the House Appropriations Committee approved its version of a FY2019 THUD appropriations bill ( H.R. 6072 ; H.Rept. 115-750 ), which proposed $53.2 billion in gross funding for HUD. This was about 29% more in gross funding than was requested by the President and slightly more (1%) than was provided in FY2018. The bill did not include the program eliminations proposed by the President, and instead proposed to fund CDBG and the Public Housing Capital Fund at FY2018 levels while reducing funding for the HOME and SHOP accounts (-12% and -7%, respectively). On August 1, 2018, the Senate approved H.R. 6147 , the Financial Services Appropriations bill, which had been amended to include the Senate Appropriations Committee-approved version of a FY2019 THUD appropriations bill ( S. 3023 , incorporated as Division D), along with three other appropriations bills. It included more than $54 billion in gross funding for HUD. This is 30% more in gross funding than was requested by the President, and about 2.5% more than was provided in FY2018. Like H.R. 6072 , the Senate-passed bill did not include the President's proposed program eliminations, and instead proposed to fund those programs at their prior-year levels. Final FY2019 appropriations were not completed before the start of the fiscal year. Funding for HUD and most other federal agencies was continued under a series of continuing resolutions until December 21, 2018, at which point funding lapsed and a partial government shutdown commenced. It continued until January 25, 2019, when another short-term continuing resolution was enacted. Final FY2019 HUD appropriations were enacted on February 15, 2019 as a part of the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). Appropriations for Selected HUD Accounts, FY2018-FY2019 (dollars in millions)
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The federal government, through the Department of Energy, operates four regional power marketing administrations (PMAs), created by statute: the Bonneville Power Administration (BPA), the Southeastern Power Administration (SEPA), the Southwestern Power Administration (SWPA), and the Western Area Power Administration (WAPA). Each PMA operates in a distinct geographic area of the coterminous United States (see Figure 1 ). Congressional interest in the PMAs has included diverse issues such as rate setting, cost and compliance associated with the Endangered Species Act (ESA; P.L. 93-205 ; 16 U.S.C. §§1531 et seq.), and questions of privatization of these federal agencies. In general, the PMAs came into being because of the government's need to dispose of electric power produced by federal dams constructed largely for irrigation, flood control, or other purposes, and to achieve small community and farm electrification—that is, providing service to customers whom it would not have been profitable for a private utility to serve. With minor exceptions, these agencies market the electric power produced by federal dams constructed, owned, and operated by the Corps of Engineers (Corps) and the U.S. Bureau of Reclamation (BOR). PMAs must give preference to public utility districts and cooperatives (e.g., "preference customers"), selling their power at cost-based rates set at the lowest possible rate consistent with sound business principles. The Federal Energy Regulatory Commission (FERC) regulates PMA rates to ensure that they are set high enough to repay the U.S. Treasury on schedule for the portion of federal facility costs that have been allocated to hydropower beneficiaries. Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i.e., receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a "net-zero" spending authority. Only the capital expenses of WAPA and SWPA require appropriations from Congress. Each PMA also has unique elements and regional issues that affect its business. They are discussed in alphabetical order. Created by the Bonneville Project Act of 1937 (16 U.S.C. §832) just before the completion of two large dams in the Pacific Northwest—Bonneville Dam in 1938 and Grand Coulee Dam in 1941—BPA was the first PMA. Though it serves a smaller geographical area, BPA is on par with WAPA (which serves the largest area) in the size of its transmission system. The agency operates and maintains about 75% of the high voltage transmission lines in its service territory, which includes Idaho, Oregon, Washington, western Montana and small parts of eastern Montana, California, Nevada, Utah, and Wyoming. BPA also markets wholesale electricity from 31 federally owned hydropower facilities in the Northwest. These generation facilities are owned both by the Corps and BOR. BPA differs from the other three PMAs in that it is self-financed: it receives no federal appropriations. Since passage of the Federal Columbia River Transmission System Act of 1974 (16 U.S.C. §838), BPA has covered its operating costs through power rates set to ensure repayment to the Treasury of capital and interest on funds used to construct the Columbia River power system. BPA also has permanent Treasury borrowing authority, which it may use for capital on large projects. This money is repaid with interest, through power sales. As of 2018, BPA had $5.53 billion of bonds outstanding to the U.S. Treasury, with BPA's current borrowing authority capped by Congress at $7.70 billion. BPA has also looked at other financing options as it approaches its debt limit, looking at nonfederal debt refinancing, lease-purchases, and other asset management strategies. BPA has initiated strategies and a financial plan to address a changing power generation and demand market, as it endeavors to meet its mandate for cost-based electric power rates. These plans are outlined in its Strategic Plan for 2018 to 2023, and address goals from financial health to infrastructure modernization. Wholesale power prices in the United States are generally trending downward, while BPA's firm power rates have trended upward. BPA repays its funding from the U.S. Treasury largely through electricity sales to customers. While BPA generates its electricity from hydropower (which is traditionally one of the lower-cost means of power generation), increasing amounts of renewable electricity from growing wind and solar capacity installations in the Pacific Northwest are challenging BPA's price competitiveness, and perhaps its ability to repay its debts in a timely manner. In 2014, BPA entered into the Regional Cooperation Agreement (RCA) with the State of Washington to address the debt of Energy Northwest, a "joint action agency formed by the Washington state legislature in 1957" to manage public power utility costs. Energy Northwest owns and operates four electric power generation facilities: White Bluffs Solar Station, Packwood Lake Hydroelectric Project, Nine Canyon Wind Project, and the Columbia Generating Station. The Regional Cooperation debt is "the issuance of new bonds by Energy Northwest to refund outstanding bonds shortly before their maturities when substantial principal repayments were and are due." According to BPA, this allows for "integrated debt management" for the combined total debt portfolios of BPA and Energy Northwest, with a net effect reducing the "weighted average interest rate and the maturity of BPA's overall debt portfolio" over the life of the program. This refinancing, according to BPA, has enabled BPA to prepay higher-interest-rate federal obligations, and has "preserved or restored U.S. Treasury borrowing authority." However, the debt service of the RCA is "borne by BPA ratepayers through BPA rates." BPA estimates that the "aggregate potential principal amount" of RCA refunding through bonds issued in fiscal years 2019 through 2030 could exceed $4.0 billion. BPA is responsible for maintaining and modernizing the generation and transmission infrastructure of its systems, and preserving and enhancing its physical and cybersecurity. With energy and capacity markets changing in the western United States (especially with the growing need to integrate increasing amounts of variable renewable sources), and the development of the Energy Imbalance Market (EIM) in the West, BPA is considering whether to join the EIM, and how this might affect its operations and customers. Environmental, fishing, and tribal advocates have sued the federal government over concerns that operating rules for hydropower dams on the Columbia and Snake Rivers (i.e., operations consistent with the National Marine Fisheries Service Biological Opinion) are inadequate to ensure survival of species threatened or endangered under the Endangered Species Act. In addition, several environmental groups filed a lawsuit blaming the dams for warm river waters in summer 2015 that resulted in the deaths of about 250,000 adult sockeye salmon migrating up the Columbia and Snake Rivers. Some of these parties have sought to remove the four lower dams on the Snake River to ensure survival of some salmon and steelhead species. In 2016, a federal judge overturned a previous management plan for the dams, finding that it would not be sufficient to protect salmon runs, and ordered a new management plan that could include removing the dams. However, in 2018, President Trump issued a Presidential Memorandum accelerating the process for a new management plan, requiring the biological opinion to be ready by 2020. The memorandum ordered the Secretary of the Interior and the Secretary of Commerce "to appropriately suspend, revise, or rescind any regulations or procedures that unduly burden" water infrastructure projects so they "are better able to meet the demands of their authorized purposes." How this will affect the fish endangerment finding is unclear at this time. The Southeastern Power Administration was created in 1950 by the Secretary of the Interior to carry out the functions assigned to the Secretary by the Flood Control Act of 1944 (P.L. 78-534) in 11 states (Alabama, Florida, Georgia, Illinois, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia). SEPA is unique among the four PMAs in two ways. It is the smallest PMA, with just over 40 employees, and, unlike the other three agencies, SEPA does not operate or maintain any transmission facilities, and thus contracts with other utilities for transmitting the federal power it markets to more than 12 million consumers. Southeastern markets approximately 3,400 MW of power produced at 22 multipurpose water projects, operated and maintained by the Corps. SEPA's facilities are aging; for instance, in 2018 it reported that its Cumberland System customers have agreed to fund $1.2 billion of planned rehabilitations of the nine hydroelectric facilities in the Corps' Nashville District. According to SEPA, it has an overcapacity issue. Projections for electricity load growth (in consultation with its preference customers) made before the 2008 economic downturn reportedly led to SEPA acquiring additional capacity it currently does not use. As a result, municipalities and electric cooperatives in SEPA's service area will have to make economic decisions regarding how to handle this excess capacity. As of 2018, at least one preference customer has terminated its contract with SEPA due to this issue. Section 5 of the Flood Control Act of 1944 (P.L. 78-534) established the Southwestern Power Administration. SWPA markets hydroelectric power in Arkansas, Kansas, Louisiana, Missouri, Oklahoma, and Texas from 24 multipurpose Corps dams with a combined capacity of 2,194 MW. SWPA serves more than 100 preference customer utilities with more than 8 million end-use customers. The agency manages nearly 1,400 miles of high-voltage transmission lines. SWPA is the only U.S. electrical balancing area supported solely by hydroelectric generation, and its use of the reservoirs and river systems within the SWPA marketing area must be balanced with flood control and other required uses so that the power needs of its customers can be met. SWPA states that it uses alternative financing and offsetting collection authorities to fund expenses and purchase power to help SWPA meet its obligations while minimizing congressional appropriations. Periodically, SWPA has been challenged by low water conditions. It has a rain-based water supply—rather than one that is snow-based, like the mountain snowpack water supply of WAPA and BPA—and sells power from a comparatively small reservoir system which stores that water. Extended dry periods sometimes mean that SWPA must purchase replacement power and energy to meet its contractual obligations. This means that SWPA requires congressional authority to use its revenues from power sales over the long term—across high and low water years. Prior year balances have been available to Southwestern so that we are financially prepared and able to achieve rate stability for our customers. This authority is critical to operating our program according to sound business principles. Southwestern's program is funded by authority to use receipts, alternative financing, and other authorities approved by Congress, including appropriations, which represent only 6.5% of Southwestern's total program. Created by the Department of Energy Organization Act of 1977 ( P.L. 95-91 ), WAPA is the newest and largest of the PMAs in terms of service area. WAPA's service area covers 1.3 million square miles, and its power—transmitted by a high voltage grid over 17,000 miles long—serves customers in 15 western states. WAPA markets and transmits hydropower from 56 federal dams operated by BOR, and the Corps. It also sells hydropower power produced by facilities administered by the International Boundary and Water Commission, and markets the United States' 24.3% share (547 megawatts) of the coal-fired Navajo Generating Station in Arizona. In addition to the types of public bodies traditionally served as preference customers by the other PMAs, WAPA has developed a policy to give preference to Native American tribes regardless of their utility status. WAPA has been working with other regional entities to address the changing electric power needs of its customers. In 2014, WAPA published its Strategic Roadmap 2024, titled "Powering the Energy Frontier." The document is intended to serve as WAPA's strategic plan to guide the agency's actions for the next 10 years. However, according to some, the developing Energy Imbalance Market in the West may provide additional options for WAPA to address transmission development needs to balance regional generation and demand. An issue of continuing importance to WAPA is its role in relieving transmission congestion within its marketing area. There are a number of constrained transmission paths in the West whose limited capacity to transfer power may reduce the ability of utilities to serve electric loads on a seasonal or ongoing basis. In 2009, Section 402 of the American Recovery and Reinvestment Act ( P.L. 111-5 ) amended the Hoover Power Plant Act of 1984 to give WAPA authority to borrow up to $3.25 billion from the U.S. Treasury to pursue transmission projects that integrate renewable generation sources into the electric transmission grid. The law provides authority to construct and upgrade transmission lines to help deliver renewable resources to market. Western created the Transmission Infrastructure Program, also known as TIP, to implement this new initiative. Several transmission projects have been initiated under the program. Previous budget proposals and legislation have proposed repealing WAPA's loan authority, but to date, none of these proposals have been enacted. In 2015, WAPA's Upper Great Plains (UGP) region joined the Southwest Power Pool (SPP), a Regional Transmission Organization (RTO). Under the operating agreement with SPP, WAPA was required to transfer functional control of UGP's eligible transmission facilities to SPP. WAPA is the first PMA to formally join an RTO, and states that benefits to date from joining SPP have significantly exceeded the original estimate of $11.5 million per year. WAPA reports that two of its other regions are considering joining SPP. For Water Year 2017, WAPA reported that it delivered 26,148 gigawatt-hours of hydroelectric power to its customers, which is 101% of average annual power sales. The West has been experiencing periodic droughts for a number of years, resulting in lower snowmelts and less water in storage and available for power generation. To help smooth the resulting annual differences, a "drought-adder" reduction program has been implemented in recent years. A drought-adder charge was levied to help repay deferred drought costs accrued during the 2000s in the Rocky Mountain and Upper Great Plains regions. The balance was paid a year ahead of schedule and, as of this year, has resulted in $40 million annual savings for more than 50 percent of WAPA's customers in Colorado, Wyoming, Montana, Kansas, Nebraska, the Dakotas and the western sections of Minnesota and Iowa. This is the second year that 417 of WAPA's customers, out of 700, have had a rate reduction. The drought-adder component of the rate remains available to WAPA to adjust to the variable hydropower resource—a lasting risk if drought conditions persist in WAPA's territory. Moderate to extreme drought conditions have been reported in parts of the western United States. In addition to issues specific to individual PMAs, some recent proposals have applied to multiple PMAs. In 2018, the Trump Administration proposed to sell the transmission assets owned and operated by the federal Power Marketing Administrations. The proposal suggested that "eliminating or reducing" the federal government's role in owning and operating transmission assets and increasing the private sector role would "encourage a more efficient allocation of economic resources and mitigate unnecessary risk to taxpayers." The proposal calls for federal transmission infrastructure assets (lines, towers, substations, and/or rights of way) to be sold, with the private sector and/or state and local entities potentially taking over the transmission functions now provided by the PMAs. The Federal entities that would result after such sales could contract with other utilities to provide transmission service for the delivery of Federal power just as the Southeastern Power Administration, which does not own transmission lines, already does. The proposal reports that according to the Administration's FY2019 budget justification, the sale of federal transmission assets would result in a net budgetary savings of $9.5 billion, in total, over a 10-year window. Reportedly, the Administration dropped the plan due to stakeholder opposition, with the Department of Energy stating that such a sale of PMA transmission assets would not proceed unless directed by Congress. Proposals to sell all or part of the PMAs are not new, and have been made in some form by almost every President since Reagan. However, Congress has sought to prevent executive branch alterations of PMA structures and authority. Under Section 208 of the Urgent Supplemental Appropriations Act, 1986 ( P.L. 99-349 ), the executive branch is prohibited from spending funds to study or draft proposals to transfer from federal control any portion of the assets of the PMAs unless specifically authorized by Congress. The Trump Administration divestment proposal could have had an indirect impact on the original congressional intent for the PMAs to provide electricity at the lowest possible cost. This in turn could require changes to the following provisions: Flood Control Act of 1944, as amended (FCA; 16 U.S.C. §825s et seq. ); The 1937 Bonneville Project Act (BPA; 16 U.S.C. §832c ); and The Reclamation Project Act of 1939 (RPA; 43 U.S.C. §485h(c)) . These laws also stipulate a preference of public bodies for the sale of federal power. Selling federally owned transmission assets could potentially affect the "lowest possible" rates of sale, and the statutory preference for publicly or cooperatively owned utilities to be the vehicle for sale of electric power produced by federal facilities.
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The federal government, through the Department of Energy, operates four regional power marketing administrations (PMAs), created by statute: the Bonneville Power Administration (BPA), the Southeastern Power Administration (SEPA), the Southwestern Power Administration (SWPA), and the Western Area Power Administration (WAPA). Each PMA operates in a distinct geographic area. Congressional interest in the PMAs has included diverse issues such as rate setting, cost and compliance associated with the Endangered Species Act (ESA; P.L. 93-205; 16 U.S.C. §§1531 et seq.), and questions of privatization of these federal agencies. In general, the PMAs came into being because of the government's need to dispose of electric power produced by dams constructed largely for irrigation, flood control, or other purposes, and to achieve small community and farm electrification—that is, providing service to customers whom it would not have been profitable for a private utility to serve. With minor exceptions, these agencies market the electric power produced by federal dams constructed, owned, and operated by the U.S. Army Corps of Engineers (Corps) and the Bureau of Reclamation (BOR). By statute, PMAs must give preference to public utility districts and cooperatives (e.g., "preference customers"), and sell their power at cost-based rates set at the lowest possible rate consistent with sound business principles. The Federal Energy Regulatory Commission regulates PMA rates to ensure that they are set high enough to repay the U.S. Treasury for the portion of federal facility costs allocated to hydropower beneficiaries. With energy and capacity markets changing in the western United States (especially with the growing need to integrate increasing amounts of variable renewable sources), and the development of the Energy Imbalance Market in the West, BPA and WAPA may have to adapt their plans with regard to generation needs and how transmission systems are developed. In 2018, the Trump Administration proposed to sell the transmission assets (lines, towers, substations, and/or rights of way) owned and operated by the federal Power Marketing Administrations. The proposal suggested that "eliminating or reducing" the federal government's role in owning and operating transmission assets, and increasing the private sector's role, would "encourage a more efficient allocation of economic resources and mitigate unnecessary risk to taxpayers." The resulting PMA entities would then contract with other utilities to provide transmission services for the delivery of federal power, similar to what SEPA does currently. Reportedly, the proposed sale of PMA assets was dropped after opposition to the plan emerged from stakeholders. Under Section 208 of the Urgent Supplemental Appropriations Act, 1986 (P.L. 99-349), the executive branch is prohibited from spending funds to study or draft proposals to transfer from federal control any portion of the assets of the PMAs unless specifically authorized by Congress. Environmental, fishing, and tribal advocates have sued the federal government over concerns that operating rules for hydropower dams on the Columbia and Snake Rivers (i.e., the National Marine Fisheries Service Biological Opinion) are inadequate to ensure survival of species threatened or endangered under the ESA. In 2016, a federal judge overturned a previous management plan for the dams, finding that it would not be sufficient to protect salmon runs, and ordered a new management plan that could include removing the dams. However, in 2018, President Trump issued a Presidential Memorandum accelerating the process for a new management plan, requiring the biological opinion to be ready by 2020. Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i.e., receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a "net-zero" spending authority. Only the capital expenses of WAPA and SWPA require appropriations from Congress.
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Prior to 1867, Qatar was ruled by the family of the leaders of neighboring Bahrain, the Al Khalifa. That year, an uprising in the territory led the United Kingdom, then the main Western power in the Persian Gulf region, to install a leading Qatari family, the Al Thani, to rule over what is now Qatar. The Al Thani family claims descent from the central Arabian tribe of Banu Tamim, the tribe to which Shaykh Muhammad ibn Abd Al Wahhab, the founder of Wahhabism, belonged. Thus, Qatar officially subscribes to Wahhabism, a conservative Islamic tradition that it shares with Saudi Arabia. In 1916, in the aftermath of World War I and the demise of the Ottoman Empire, Qatar and Britain signed an agreement under which Qatar formally became a British protectorate. In 1971, after Britain announced it would no longer exercise responsibility for Persian Gulf security, Qatar and Bahrain considered joining with the seven emirates (principalities) that were then called the "Trucial States" to form the United Arab Emirates. However, Qatar and Bahrain decided to become independent rather than join that union. The UAE was separately formed in late 1971. Qatar adopted its first written constitution in April 1970 and became fully independent on September 1, 1971. The United States opened an embassy in Doha in 1973. The last U.S. Ambassador to Qatar, Dana Shell Smith, resigned from that post in June 2017, reportedly over disagreements with the Trump Administration. Mary Catherine Phee has been nominated as a replacement. Qatar's governing structure approximates that of the other GCC states. The country is led by a hereditary Amir (literally "prince," but interpreted as "ruler"), Shaykh Tamim bin Hamad Al Thani. He became ruler in June 2013 when his father, Amir Hamad bin Khalifa Al Thani, relinquished power voluntarily. The Amir governs through a prime minister, who is a member of the Al Thani family, and a cabinet, several of whom are members of the Al Thani family or of prominent allied families. Amir Tamim serves concurrently as Minister of Defense, although most of the defense policy functions are performed by the Minister of State for Defense, a position with less authority than that of full minister. In November 2014, Amir Tamim appointed a younger brother, Shaykh Abdullah bin Hamad, to be deputy Amir and the heir apparent. The Prime Minister, Shaykh Abdullah bin Nasir bin Khalifa Al Thani, also serves as Interior Minister. There is dissent within the Al Thani family—mostly from those of lineages linked to ousted former Qatari rulers—but no significant challenge to Tamim's rule is evident. There were no significant protests in Qatar during the "Arab Spring" uprising of 2011 or since. Political parties are banned, and unlike in Kuwait and Bahrain, there are no well-defined "political societies" that act as the equivalent of parties. Political disagreements in Qatar are aired mainly in private as part of a process of consensus building in which the leadership tries to balance the interests of the various families and other constituencies. Then-Amir Hamad put a revised constitution to a public referendum on April 29, 2003, achieving a 98% vote in favor. Nevertheless, it left in place significant limitations: for example, it affirms that Qatar is a hereditary emirate. Some Western experts also criticize Qatar's constitution for specifying Islamic law as the main source of legislation. The constitution stipulates that elections will be held for 30 of the 45 seats of the country's Advisory Council ( Majlis Ash-Shura ), a national legislative body, but elections have been repeatedly delayed. The elected Council is also to have broader powers, including the ability to remove ministers (two-thirds majority vote), to approve a national budget, and to draft and vote on proposed legislation that can become law (two-thirds majority vote and concurrence by the Amir). In 2008, it was agreed that naturalized Qataris who have been citizens for at least 10 years will be eligible to vote, and those whose fathers were born in Qatar will be eligible to run. Qatar is the only GCC state other than Saudi Arabia not to have held elections for any seats in a legislative body. The country holds elections for a 29-seat Central Municipal Council. Elections for the fourth Council (each serving a four-year term) were held on May 13, 2015. The Central Municipal Council advises the Minister of Municipality and Urban Affairs on local public services. Voter registration and turnout—21,735 voters registered out of an estimate 150,000 eligible voters, and 15,171 of those voted—were lower than expected, suggesting that citizens viewed the Council as lacking influence. The State Department stated that "observers considered [the municipal council elections] free and fair." Recent State Department reports identify the most significant human rights problems in the country as limits on the ability of citizens to choose their government in free and fair elections; restrictions on freedoms of assembly and association, including prohibitions on political parties and labor unions; restrictions on the rights of expatriate workers; and criminalization of consensual same-sex sexual activity. A nominally independent, government-funded National Human Rights Committee (NHRC) investigates allegations of human rights abuses in the country. It is under the authority of the Qatar Foundation that was founded and is still run by the Amir's mother, Shaykha Moza. The NHRC also monitors the situation of about 1,000-2,000 stateless residents (" bidoons "), who are able to register for public services but cannot own property or travel freely to other GCC countries. Although the constitution provides for an independent judiciary, the Amir, based on recommended selections from the Supreme Judicial Council, appoints all judges, who hold their positions at his discretion. As have the other GCC states, Qatar has, since the 2011 "Arab Spring" uprisings, issued new laws that restrict freedom of expression and increase penalties for criticizing the ruling establishment. In 2014, the government approved a new cybercrimes law that provides for up to three years in prison for anyone convicted of threatening Qatar's security or of spreading "false news." A November 2015 law increased penalties for removing or expressing contempt at the national flag or the GCC flag. In July 2017, the country held a national conference on freedom of expression at which, according to the State Department, members of international human rights organizations were able to criticize the country's human rights record. Al Jazeera. The government owns and continues to partially fund the Al Jazeera satellite television network, which has evolved into a global media conglomerate that features debates on controversial issues, as well as criticism of some Arab leaders. The State Department quotes "some observers and former Al Jazeera employees" as alleging that the government "influences" Al Jazeera content. Some Members of Congress have asserted that Al Jazeera is an arm of the Qatar government and that its U.S. bureau should be required to register under the Foreign Agents Registration Act (FARA). According to the State Department, social and legal discrimination against women continues, despite the constitutional assertion of equality. No specific law criminalizes domestic violence, and a national housing law discriminates against women married to noncitizen men and divorced women. The laws criminalizes rape. Court testimony by women carries half the weight of that of a man. On the other hand, women in Qatar drive and own property, and constitute about 15% of business owners and more than a third of the overall workforce, including in professional positions. Women serve in public office, such as minister of public health, chair of the Qatar Foundation, head of the General Authority for Museums, permanent representative to the United Nations, and ambassadors to Croatia and the Holy See. In November 2017, the Amir appointed four women to the national consultative council for the first time in the legislative body's history. However, most of the other small GCC states have more than one female minister. The State Department's Trafficking in Persons report for 2018 upgraded Qatar's ranking to Tier 2 from Tier 2: Watch List, on the basis that the government has made significant efforts to comply with the minimum standards for the elimination of trafficking over the past year. Qatar enacted a Domestic Worker Law to better protect domestic workers and, in recent years, it also established a coordinating body to oversee and facilitate anti-trafficking initiatives and enacting a law that reforms the sponsorship system to significantly reduce vulnerability to forced labor. But Qatar remains a destination country for men and women subjected to forced labor and, to a much lesser extent, forced prostitution. Female domestic workers are particularly vulnerable to trafficking due to their isolation in private residences and lack of protection under Qatari labor laws. In the course of the January 2018 U.S.-Qatar "Strategic Dialogue," the two countries signed a memorandum of understanding to create a framework to combat trafficking in persons. The State Department assesses Qatar's labor rights as not adequately protecting the rights of workers to form and join independent unions, conduct legal strikes, or bargain collectively. Qatari law does not prohibit antiunion discrimination or provide for reinstatement of workers fired for union activity. The single permitted trade union, the General Union of Workers of Qatar, is assessed as "not functioning." International scrutiny of Qatar's labor practices has increased as Qatar makes preparations to host the 2022 FIFA World Cup soccer tournament; additional engineers, construction workers, and other laborers have been hired to work in Qatar. Some workers report not being paid for work and a lack of dispute resolution, causing salary delays or nonpayment. Some human rights groups have criticized Qatar for allowing outdoor work (primarily construction) in very hot weather. Yet, the State Department credits the country with taking steps to protect labor rights, including for expatriate workers. In December 2016, a labor reform went into effect that offers greater protections for foreign workers by changing the " kafala " system (sponsorship requirement for foreign workers) to enable employees to switch employers at the end of their labor contracts rather than having to leave Qatar when their contracts end. In 2018, the government established and is funding several housing sites to replace unsafe temporary housing for expatriate workers. The government also has stepped up arrests and prosecutions of individuals for suspected labor law violations, and has increased its cooperation with the ILO to take in worker complaints and better inform expatriate workers of their rights. Qatar's constitution stipulates that Islam is the state religion and Islamic law is "a main source of legislation," but Qatari laws incorporate secular legal traditions as well as Islamic law. The law recognizes only Islam, Christianity, and Judaism. The overwhelming majority (as much as 95%) of Qatari citizens are Sunni Muslims, possibly explaining why there have been no signs of sectarian schisms within the citizenry. The government permits eight registered Christian denominations to worship publicly at the Mesaymir Religious Complex (commonly referred to as "Church City"), and it has allowed the Evangelical Churches Alliance of Qatar to build a church. Jews and adherents of unrecognized religions—such as Hindus, Buddhists, and Baha'is—are allowed to worship privately but do not have authorized facilities in which to practice their religions. Qatari officials state that they are open to considering the creation of dedicated worship spaces for Hindus, Jews, and Buddhists and that any organized, non-Muslim religious group could use the same process as Christians to apply for official registration. Members of at least one group reportedly filed for land in previous years to build their own complex but received no response from the government. Qatar uses its financial resources to implement a foreign policy that engages a wide range of regional actors, including those that are at odds with each other. Qatari officials periodically meet with Israeli officials while at the same hosting leaders of the Palestinian militant group, Hamas. Qatar maintains consistent ties to Iran while at the same time hosting U.S. forces that contain Iran's military power. Qatar hosts an office of the Afghan Taliban movement that facilitates U.S.-Taliban talks. Its policies have enabled Qatar to mediate some regional conflicts and to obtain the freedom of captives held by regional armed groups. Yet, Qatar often backs regional actors at odds with those backed by de facto GCC leader Saudi Arabia and other GCC states, causing Saudi Arabia and its close allies in the GCC to accuse Qatar of undermining the other GCC countries. As have some of the other GCC states, Qatar has shown an increasing willingness to use its own military forces to try to shape the outcome of regional conflicts. A consistent source of friction within the GCC has been Qatar's embrace of Muslim Brotherhood movements as representing a moderate political Islamist movement that can foster regional stability. Qatar hosts Islamists who adhere to the Brotherhood's traditions, including the aging, outspoken Egyptian cleric Yusuf al-Qaradawi. In 2013-2014, differences over this and other issues widened to the point where Saudi Arabia, UAE, and Bahrain withdrew their ambassadors from Doha in March 2014, accusing Qatar of supporting "terrorism." The Ambassadors returned in November 2014 in exchange for a reported pledge by Qatar to fully implement a November 2013 "Riyadh Agreement" that committed Qatar to noninterference in the affairs of other GCC states and to refrain from supporting Muslim Brotherhood-linked organizations. These differences erupted again following the May 20-22, 2017, visit of President Donald Trump to Saudi Arabia, during which expressed substantial support for Saudi leaders. On June 5, 2017, Saudi Arabia, UAE, and Bahrain, joined by Egypt and a few other Muslim countries, severed diplomatic relations with Qatar, expelled Qatar's diplomats, recalled their ambassadors, and imposed limits on the entry and transit of Qatari nationals and vessels in their territories, waters, and airspace. They also accused Qatar of supporting terrorist groups and Iran. On June 22, 2017, the Saudi-led group presented Qatar with 13 demands, including closing Al Jazeera, severing relations with the Muslim Brotherhood, scaling back relations with Iran, closing a Turkish military base in Qatar, and paying reparations for its actions. Amir Tamim expressed openness to negotiations but said it would not "surrender" its sovereignty. The Saudi-led group subsequently reframed its demands as six "principles," among which were for Qatar to "combat extremism and terrorism" and prevent their financing, suspend "all acts of provocation," fully comply with the commitments Qatar made in 2013 and 2014 (see above), and refrain "from interfering in the internal affairs of states." President Trump initially responded to the crisis by echoing the Saudi-led criticism of Qatar's policies, but later sought to settle the rift. Then-Secretary of State Rex Tillerson, working with Kuwait, took the lead within the Trump Administration to mediating the dispute, including by conducting "shuttle diplomacy" in the region during July 10-13, 2017. President Trump facilitated a phone call between Amir Tamim and Saudi Crown Prince Mohammad bin Salman on September 9, 2017, but the direct dialogue faltered over a dispute about which leader had initiated the talks. No subsequent meetings between President Trump and the leaders of the parties to the dispute, or subsequent actions or proposals, have produced any significant progress toward resolution of the rift. Secretary of State Pompeo's visit to the Gulf states in January 2019 produced no evident movement, and the U.S. envoy who was assigned to work on this issue, General Anthony Zinni (retired), resigned as envoy in early January 2019. Yet, there are signs that Saudi Arabia and the UAE, facing criticism over the Kashoggi issue and their involvement in Yemen, might want to de-escalate the dispute. Qatari forces and commanders have been participating in GCC "Gulf Shield" military exercises and command meetings in Saudi Arabia and other GCC states. Amir Tamim was invited by Saudi Arabia to the annual GCC summit in Dammam, Saudi Arabia, during December 7-9, 2018, but he did not attend. Qatar asserts that the blockading countries are seeking to change Qatar's leadership and might take military action to force Qatar to accept their demands. In December 2017, Saudi Arabia "permanently" closed its Salwa border crossing into Qatar, and some press reports say that Saudi Arabia is contemplating building a canal that would physically separate its territory from that of Qatar. Qatari officials assert that the country's ample wealth is enabling it to limit the economic effects of the Saudi-led move, but that the blockade has separated families and caused other social disruptions. Qataris reportedly have rallied around their leadership to resist Saudi-led demands. The dispute has to date thwarted U.S. efforts to assemble the a new "Middle East Strategic Alliance" to counter Iran and regional terrorist groups. This alliance – to consist of the United States, the GCC countries, and other Sunni-led states, is reportedly to be formally unveiled at U.S.-GCC summit that has been repeatedly postponed since early 2018 and is not scheduled. The MESA has also been hampered by the global criticism of Saudi de facto leader Crown Prince Mohammad bin Salman for his possible involvement in the October 2018 killing of U.S.-based Saudi journalist Jamal Kashoggi at the Saudi consulate in Istanbul, and Egypt's April 2019 decision to refrain from joining the Alliance. Qatar's disputes with other GCC countries have come despite the resolution in 2011 of a long-standing territorial dispute between Qatar and Bahrain, dating back to the 18 th century, when the ruling families of both countries controlled parts of the Arabian peninsula. Qatar and Bahrain referred the dispute to the International Court of Justice (ICJ) in 1991 after clashes in 1986 in which Qatar landed military personnel on a disputed man-made reef (Fasht al-Dibal). In March 2001, the ICJ sided with Bahrain on the central dispute over the Hawar Islands, but with Qatar on ownership of the Fasht al-Dibal reef and the town of Zubara on the Qatari mainland, where some members of the ruling Al Khalifa family of Bahrain are buried. Two smaller islands, Janan and Hadd Janan, were awarded to Qatar. Qatar accepted the ruling as binding. Even though the Saudi-led bloc asserts that Qatar had close relations with Iran, Qatar has long helped counter Iran strategically. Qatar enforced international sanctions against Iran during 2010-2016, and no Qatar-based entity has been designated by the United States as an Iran sanctions violator. Amir Tamim attended both U.S.-GCC summits (May 2015 at Camp David and April 2016 in Saudi Arabia) that addressed GCC concerns about the July 2015 U.S.-led multilateral agreement on Iran's nuclear program (Joint Comprehensive Plan of Action, JCPOA). Qatar withdrew its Ambassador from Tehran in January 2016 in solidarity with Saudi Arabia over the Saudi execution of a dissident Shiite cleric, and Qatar joined the February 2016 GCC declaration that Lebanese Hezbollah is a terrorist group. Yet Qatari leaders have always argued that dialogue with Iran is key to reducing regional tensions. Qatar and Iran have shared a large natural gas field in the Persian Gulf without incident, although some Iranian officials have occasionally accused Qatar of cheating on the arrangement. In February 2010, as Crown Prince, Shaykh Tamim, visited Iran for talks with Iranian leaders, and as Amir, he has maintained direct contact with Iran's President Hassan Rouhani. Apparently perceiving that the June 2017 intra-GCC rift provided an opportunity to drive a wedge within the GCC, Iran supported Qatar in the dispute and has exported additional foodstuffs to Qatar to help it compensate for the cutoff of Saudi food exports. It has permitted Qatar Airways to overfly its airspace in light of the Saudi, UAE, and Bahraini denial of their airspace to that carrier. In August 2017, Qatar formally restored full diplomatic relations with Iran. Qatar did not directly support the May 8, 2018, U.S. withdrawal from the JCPOA, instead issuing a statement hoping that efforts to "denuclearize" the region will not lead to "escalation." Saudi official statements also cited Qatar's alleged support for pro-Iranian dissidents in Bahrain as part of the justification for isolating Qatar in June 2017. Contributing to that Saudi perception was Qatar's brokering in 2008 of the "Doha Agreement" to resolve a political crisis in Lebanon that led to clashes between Lebanon government forces and Hezbollah. Qatar's role as a mediator stemmed, at least in part, from Qatar's role in helping reconstruct Lebanon after the 2006 Israel-Hezbollah war, and from then-Amir Hamad's postwar visit to Hezbollah strongholds in Lebanon. Further fueling Saudi and UAE suspicions was a 2017 Qatari payment to certain Iraqi Shiite militia factions of several hundred million dollars to release Qatari citizens, including royal family members, who were kidnapped in 2016 while falcon hunting in southern Iraq. In Egypt, after the fall of Egyptian President Hosni Mubarak in 2011, a Muslim Brotherhood-linked figure, Muhammad Morsi, won presidential elections in 2012. Qatar contributed about $5 billion in aid, aggravating a split between Qatar and the other GCC states over the Muslim Brotherhood. Saudi Arabia and the UAE backed Morsi's ouster by Egypt's military in 2013. Because of its support for Morsi, Qatar's relations with former military leader and now President Abdel Fattah el-Sisi have been strained, and Egypt joined the 2017 Saudi-led move against Qatar. In Libya, Qatar joined the United States and several GCC and other partner countries in air operations to help oust Qadhafi in 2011. Subsequently, however, Qatar has supported Muslim Brotherhood-linked factions in Libya opposed by the UAE, Egypt, and Saudi Arabia. This difference in approaches in Libya among the GCC states contributed to the intra-GCC rift. As of April 2019, it appears that the UAE and Egypt-backed ex-military commander Khalifa Hifter, who has consolidated his control of much of Libya over the past four years, is poised to reunite the country by force. In 2015, Qatar joined the Saudi-led military coalition that is battling Iran-backed Zaidi Shiite Houthi rebels in Yemen, including conducting air strikes against Houthi and allied positions. This was a departure from Qatar's 2006-2007 failed efforts to mediate between the Houthis and the government of President Ali Abdullah Saleh, who left office in 2012 following an "Arab Spring"-related uprising in Yemen. In September 2015, Qatar deployed about 1,000 military personnel, along with armor, to Yemen. Four Qatar soldiers were killed fighting there. As a result of the intra-GCC rift, in mid-2017 Qatar withdrew from the Saudi-led military effort in Yemen. In Syria, Qatar provided funds and weaponry to rebels fighting the regime of President Bashar Al Asad, including those, such as Ahrar Al Sham, that competed with and sometimes fought anti-Asad factions supported by Saudi Arabia and the UAE. Qatar also built ties to Jabhat al Nusra (JAN), an Al Qaeda affiliate that was designated by the United States as a Foreign Terrorist Organization (FTO), although Qatari officials assert that their intent was to induce the group to sever its ties to Al Qaeda, which it formally did in July 2016. Qatari mediation also obtained the release of Lebanese and Western prisoners captured by that group. However, Asad regime recent gains in Syria likely render Qatar's involvement moot. Qatar has not, to date, followed Kuwait or Bahrain in reopening its embassy in Damascus; its Foreign Minister stated in January 2019 that Qatar saw "no reason" to do so. According to the State Department, Qatar has allowed 20,000 Syrians fleeing the civil war there to retain residency in Qatar. Qatar is a member of the U.S.-led coalition combating the Islamic State. In 2014, Qatar flew some airstrikes in Syria against Islamic State positions. However, after several weeks, the coalition ceased identifying Qatar as a participant in coalition strikes inside Syria. Neither Qatar nor any other GCC state participated in coalition air operations against the Islamic State inside Iraq. In April 2017, Qatar reportedly paid ransom to obtain the release of 26 Qatari ruling family members abducted Iraqi Shia militiamen while on a hunting trip in southern Iraq in 2015. The Iraqi government said in June 2017 that it, not Shia fighters, received the ransom. Qatar has sought to exert some influence in Lebanon, possibly as a counterweight to that exerted by Saudi Arabia. In January 2019, Amir Tamim was one of the few regional leaders to attend an Arab League summit held in Beirut. In late January 2019, Qatar announced a $500 million investment in Lebanon government bonds to support that country's ailing economy. Qatar has attempted to play a role in Israeli-Palestinian peace negotiations by engaging all parties. In directly engaging Israel, in 1996, then-Amir Hamad hosted a visit by then-Prime Minister of Israel Shimon Peres and allowed Israel to open a formal trade office in Doha—going beyond the GCC's dropping in 1998 of the secondary Arab League boycott of Israel. In April 2008, then-Foreign Minister Tzipi Livni attended the government-sponsored Doha Forum and met with Amir Hamad. Qatar ordered the Israeli offices in Doha closed in January 2009 at the height of an Israel-Hamas conflict and the offices have not formally reopened. Still, small levels of direct Israel-Qatar trade reportedly continue; Israeli exports to Qatar consist mostly of machinery and technology, and imports from Qatar are primarily plastics. Amir Tamim regularly accuses Israel of abuses against the Palestinians and expresses consistent support for Palestinian efforts for full United Nations membership and recognition, while at the same time backing negotiations between the Palestinians and Israel. Qatar has also engaged the Islamist group Hamas, a Muslim Brotherhood offshoot that has exercised de facto control of the Gaza Strip since 2007. Qatari officials assert that their engagement with Hamas can help broker reconciliation between Hamas and the Fatah-led Palestinian Authority (PA). U.S. officials have told Members of Congress that Qatar's leverage over Hamas can be helpful to reducing conflict between Hamas and Israel and that Qatar has pledged that none of its assistance to the Palestinians goes to Hamas. Qatar reportedly asked former Hamas political bureau chief Khalid Meshal to leave Qatar after the intra-GCC rift erupted, apparently to accommodate the blockading states. Qatar's critics assert that Hamas leaders are too often featured on Al Jazeera and that Qatar's relations with Hamas constitute support for a terrorist organization. In the 115 th Congress, the Palestinian International Terrorism Support Act of 2017 ( H.R. 2712 ), which was ordered to be reported to the full House on November 15, 2017, appeared directed at Qatar by sanctioning foreign governments determined to be providing financial or other material support to Hamas or its leaders. As have the other Gulf states, Qatar has sought to compensate for a curtailment of U.S. contributions to the U.N. Relief Works Agency (UNRWA). In April 2018, Qatar donated $50 million to that agency. In December 2018, Qatar reached a two-year agreement with UNRWA to donate to that agency's programs in education and health care. Qatari forces did not join any U.S.-led operations inside Afghanistan, but its facilities and forces support U.S. operations there, and Qatar has brokered talks between the United States and Taliban representatives. Unlike Saudi Arabia and UAE, Qatar did not recognize the Taliban as the legitimate government of Kabul when the movement ruled during 1996-2001. In June 2013, the Taliban opened a representative office in Qatar, but it violated U.S.-Qatar-Taliban understandings by raising a flag of the former Taliban regime on the building and Qatar, at U.S. request, immediately closed the office. Taliban officials remained in Qatar, and revived U.S.-Taliban talks led to the May 31, 2014, exchange of captured U.S. soldier Bowe Bergdahl for five Taliban figures held by the United States at the prison facility in Guantanamo Bay, Cuba. The five were banned from traveling outside Qatar until there is an agreed solution that would ensure that they could not rejoin the Taliban insurgency. In November 2018, the five joined the Taliban representative office in Doha. Qatar permitted the Taliban office in Qatar to formally reopen in 2015. Deputy Assistant Secretary of State for South and Central Asia Alice Wells met with Taliban figures from the office in Doha in July 2018 for discussions about a future peace settlement in Afghanistan. Since mid-2018, further talks, with increasing levels of intensity, have taken place in Doha between Taliban negotiators and the U.S. envoy for Afghanistan, Ambassador Zalmay Khalilzad. Qatar might also have some contacts with the Haqqani Network, a U.S.-designated Foreign Terrorist Organization (FTO) that is allied with the Taliban. In January 2016, Qatari mediation reportedly caused the Haqqani Network to release a Canadian hostage, Colin Rutherford. The mediation did not, as Qatar had hoped, lead to the freedom of the Coleman family, also held by that group, who were rescued from the group by a U.S. and Pakistani operation in October 2016. In January 2018, Qatar's air force completed the first two flights of its C-17 (Globemaster) cargo aircraft to Afghanistan and back. According to then-Defense Secretary Mattis, the flights provided logistical support to the NATO "counterterrorism" campaign there. Somewhat outside the traditional Middle East: Qatar has played an active role in mediating conflict over Sudan's Darfur region. In 2010, Qatar, including through grants and promises of investment, helped broker a series of agreements, collectively known as the Doha Agreements, between the government and various rebel factions. In March 2018, Qatar and Sudan signed an agreement to jointly invest $4 billion to develop the Red Sea port of Suakin off Sudan's coast. Qatar has forged relationships with several countries in Central Asia, possibly in an effort to shape energy routes in the region. Amir Tamim has exchanged leadership visits with the President of Turkmenistan, Gurbanguly Berdymukhamedov in 2016 and 2017. The two countries are major world gas suppliers. The leader of Tajikistan, Imamali Rahmonov, visited Doha in February 2017 to reportedly discuss Qatari investment and other joint projects. Qatar funded a large portion of a $100 million mosque in Dushanbe, which purports to be the largest mosque in Central Asia. U.S.-Qatar defense and security relations are long-standing and extensive—a characterization emphasized by senior U.S. officials in the course of the two U.S.-Qatar "Strategic Dialogue" sessions—in Washington, DC, in January 2018, and in Doha in January 2019. Senior U.S. officials have praised Qatar as "a longtime friend and military partner for peace and stability in the Middle East and a supporter of NATO's mission in Afghanistan." The U.S-Qatar defense relationship emerged during the 1980-1988 Iran-Iraq war. The six Gulf monarchies formed the GCC in late 1981 and collectively backed Iraq against the threat posed by Iran in that war, despite their political and ideological differences with Iraq's Saddam Hussein. In the latter stages of that war, Iran attacked international shipping in the Gulf and some Gulf state oil loading facilities, but none in Qatar. After Iraq invaded GCC member Kuwait in August 1990, the GCC participated in the U.S.-led military coalition that expelled Iraq from Kuwait in February 1991. In January 1991, Qatari armored forces helped coalition troops defeat an Iraqi attack on the Saudi town of Khafji. The Qatari participation in that war ended U.S.-Qatar strains over Qatar's illicit procurement in the late 1980s of U.S.-made "Stinger" shoulder-held antiaircraft missiles. U.S.-Qatar defense relations subsequently deepened and the two countries signed a formal defense cooperation agreement (DCA). U.S. Central Command (CENTCOM) Commander General Joseph Votel testified on February 27, 2018, that U.S. operations have not been affected by the intra-GCC rift. Qatar, one of the wealthiest states in the world on a per capita gross domestic product (GDP) basis, receives virtually no U.S. military assistance. At times, small amounts of U.S. aid have been provided to help Qatar develop capabilities to prevent smuggling and the movement of terrorists or proliferation-related gear into Qatar or around its waterways. The United States and Qatar signed a formal defense cooperation agreement (DCA) on June 23, 1992. The DCA was renewed for 10 years, reportedly with some modifications, in December 2013. The text of the pact is classified, but it reportedly addresses U.S. military access to Qatari military facilities, prepositioning of U.S. armor and other military equipment, and U.S. training of Qatar's military forces. Up to 13,000 U.S. troops are deployed at the various facilities in Qatar. Most are U.S. Air Force personnel based at the large Al Udeid air base southwest of Doha, working as part of the Coalition Forward Air Component Command (CFACC). The U.S. personnel deployed to Qatar participate in U.S. operations such as Operation Inherent Resolve (OIR) against the Islamic State organization and Operation Freedom's Sentinel in Afghanistan, and they provide a substantial capability against Iran. The U.S. Army component of U.S. Central Command prepositions armor (enough to outfit one brigade) at Camp As Sayliyah outside Doha. U.S. armor stationed in Qatar was deployed in Operation Iraqi Freedom that removed Saddam Hussein from power in Iraq in 2003. The DCA also reportedly addresses U.S. training of Qatar's military. Qatar's force of about 12,000 is the smallest in the region except for Bahrain. Of that force, about 8,500 are ground forces, 1,800 are naval forces, and 1,500 are air forces. A 2014 law mandates four months (three months for students) of military training for males between the ages of 18 and 35, with a reserve commitment of 10 years (up to age 40). General Votel's February 2018 testimony, referenced above, stated that Qatar is seeking to expand its military both in size and capacity. Since 2002, Qatar has contributed over $8 billion to support U.S. and coalition operations at Al Udeid. The air field, which also hosts the forward headquarters for CENTCOM, has been steadily expanded and enhanced not only with Qatari funding but also about $450 million in U.S. military construction funding since 2003. In March 2018, the State Department approved the sale to Qatar of equipment, with an estimated value of about $200 million, to upgrade the Air Operation Center at Al Udeid. The January 2018 Strategic Dialogue resulted in a number of U.S.-Qatar announcements of expanded defense and security cooperation, including Qatari offers to fund capital expenditures that offer the possibility of an "enduring" U.S. military presence in Qatar and to discuss the possibility of "permanent [U.S.] basing" there. To enable an enduring U.S. presence, Qatar is expanding and enhance Al Udeid over the next two decades—an effort that would facilitate an enduring U.S. presence there. On July 24, 2018, the U.S. and Qatari military attended a groundbreaking ceremony for the Al Udeid expansion, which will include over 200 housing units for families of officers and expansion of the base's ramps and cargo facilities. On January 24, 2019, in the course of the second U.S.-Qatar Strategic Dialogue, the Qatar Ministry of Defense and the U.S. Department of Defense signed a memorandum of understanding that DOD referred to as a "positive step towards the eventual formalization of Qatar's commitment to support sustainment costs and future infrastructure costs at [Al Udeid Air Base]." Qatar has also extended the Hamad Port to be able to accommodate U.S. Navy operations were there a U.S. decision to base such operations in Qatar. Qatar's forces continue to field mostly French-made equipment, such as the AMX-30 main battle tank, but Qatar is increasingly shifting its weaponry mix to U.S.-made equipment. According to General Votel's February 27, 2018, testimony, Qatar is currently the second-largest U.S. Foreign Military Sales (FMS) customer, with $25 billion in new FMS cases. And, Qatar is "on track" to surpass $40 billion in the next five years with additional FMS purchases. The joint statement of the U.S.-Qatar Strategic Dialogue in January 2018 said that Qatari FMS purchases had resulted in over 110,000 American jobs and the sustainment of critical U.S. military capabilities. Tanks. Qatar's 30 main battle tanks are French-made AMX-30s. In 2015, Germany exported several "Leopard 2" tanks to Qatar. Qatar has not purchased U.S.-made tanks, to date. Combat Aircraft. Qatar currently has only 18 combat aircraft, of which 12 are French-made Mirage 2000s. To redress that deficiency, in 2013 Qatar submitted a letter of request to purchase 72 U.S.-made F-15s. After a long delay reportedly linked to the U.S. commitment to Israel's "Qualitative Military Edge" (QME), on November 17, 2016, the Defense Security Cooperation Agency (DSCA) notified Congress of the potential sale, which has an estimated value of $21 billion. The FY2016 National Defense Authorization Act (Section 1278 of P.L. 114-92 ) required a DoD briefing for Congress on the sale, including its effect on Israel's QME. On June 14, 2017, the United States and Qatar signed an agreement for a reported 36 of the F-15 fighters, which predated (and therefore were not covered by) then-Senate Foreign Relations Committee Chairman Senator Bob Corker's June 26, 2017 announcement that he would not provide informal concurrence to arms sales to the GCC countries until the intra-GCC rift was resolved. That blanket hold was dropped on February 8, 2018. In December 2017, the Defense Department announced that Qatar would buy the second group of 36 F-15s under the sale agreement. Deliveries of all aircraft are to be completed by the end of 2022. Qatar signed a $7 billion agreement in May 2015 to purchase 24 French-made Rafale aircraft, and, in September 2017, a "Statement of Intent" with Britain to purchase 24 Typhoon combat aircraft. Heli copters . In 2012, the United States sold Qatar AH-64 Apache attack helicopters and related equipment; UH-60 M Blackhawk helicopters; and MH-60 Seahawk helicopters. The total potential value of the sales was estimated at about $6.6 billion, of which about half consisted of the Apache sale. On April 9, 2018, DSCA announced that the State Department had approved a sale to Qatar of 5,000 Advanced Precision Kill Weapons Systems II Guidance Sections for use on its Apache fleet, with an estimated sale value of $300 million. Short-Range Missile and Rocket Systems. Qatar is not known to have any extended-range missiles, but various suppliers have provided the country with short-range systems that can be used primarily in ground operations. During 2012-2013, the United States sold Qatar Hellfire air-to-ground missiles, Javelin guided missiles, the M142 High Mobility Artillery Rocket System (HIMARS), the Army Tactical Missile System (ATACMS), and the M31A1 Guided Multiple Launch Rocket System (GMLRS). The total potential value of the sales was estimated at about $665 million. On April 22, 2016, the Defense Security Cooperation Agency notified to Congress a potential sale to Qatar of 252 RIM-116C Rolling Airframe Tactical Missiles and 2 RIM 116C-2 Rolling Airframe Telemetry Missiles, plus associated equipment and support, with an estimated sale value of $260 million. On May 26, 2016, DSCA notified to Congress an additional sale of 10 Javelin launch units and 50 Javelin missiles, with an estimated value of $20 million. On November 27, 2018, DSCA notified Congress of a State Department approval of a commercial sale by Raytheon of 40 National Advanced Surface-to-Air Missile Systems (NADSAMS) at an estimated value of $215 million. Ballistic Missiles . At its national day parade in Doha in mid-December 2017, the Qatari military displayed its newly purchased SY 400-BP-12A ballistic missile, which has a 120-mile range and is considered suited to a surface attack mission. The display was widely viewed as an effort to demonstrate to the Saudi-led bloc Qatar's capabilities to resist concerted pressure. Ballistic Missile Defense (BMD) Systems . Qatar has purchased various U.S.-made BMD systems, consistent with U.S. efforts to promote a coordinated Gulf missile defense capability against Iran's missile arsenal. In 2012, the United States sold Qatar Patriot Configuration 3 (PAC-3, made by Raytheon) fire units and missiles at an estimated value of nearly $10 billion. Also that year, the United States agreed to sell Qatar the Terminal High Altitude Area Air Defense (THAAD), the most sophisticated ground-based missile defense system the United States has made available for sale. However, because of Qatar's budget difficulties and operational concerns, the THAAD sale has not been finalized. In February 2017, Raytheon concluded an agreement to sell Qatar an early warning radar system to improve the capabilities of its existing missile defense systems, with an estimated value of $1.1 billion. In December 2017, the Defense Department awarded Raytheon a $150 million contract to provide Qatar with services and support for its PAC-3 system. Naval Vessels . In August 2016, DSCA transmitted a proposed sale to Qatar of an unspecified number of U.S.-made Mk-V fast patrol boats, along with other equipment, with a total estimated value of about $124 million. In August 2017, Qatar finalized a purchase from Italy of four multirole corvette ships, two fast patrol missile ships, and an amphibious logistics ship, with an estimated value of over $5 billion. Qatar has also developed relations with NATO under the "Istanbul Cooperation Initiative" (ICI). Qatar's Ambassador to Belgium serves as the interlocutor with NATO, the headquarters of which is based near Brussels. In June 2018, Qatar's Defense Minister said that his country's long-term strategic "ambition" is to join NATO. As noted above, Qatar has historically bought most of its major combat systems from France. On March 28, 2019, French Prime Minister Edouard Phillipe visited Doha and signed with Qatar's Defense and Interior Minister five agreements to boost ties. The agreements focused on defense information exchange, cooperation to combat cybercrime, and culture and education agreements. Qatar's defense relationship with Turkey has become an element in Qatar's efforts to resist the Saudi-led pressure in the intra-GCC crisis. In 2014, Qatar allowed Turkey—a country that, like Qatar, often supports Muslim Brotherhood—to open a military base (Tariq bin Ziyad base) in Qatar, an initiative that might have contributed to Turkey's support for Qatar in the June 2017 intra-GCC rift. One of the "13 demands" of the Saudi-led bloc has been that Qatar close the Turkish base in Qatar—a demand Qatari officials say will not be met. Turkey has demonstrated its support for Qatar by sending additional troops there and conducting joint exercises in August 2017 and by increasing food exports to replace those previously provided by Saudi Arabia. Turkey further added to its Qatar troop contingent in December 2017. Qatar has broadened its relationship with Russia since early 2016 in conjunction with efforts to resolve the conflict in Syria and in recognition of Russia's heightened role in the region. One of Qatar's sovereign wealth funds has increased its investments in Russia, particularly in its large Rosneft energy firm. Amir Tamim has made several visits to Russia, the latest of which was in March 2018. During the visit, it was announced that Qatar Airways would buy a 25% stake in the Vnukovo International Airport, one of Moscow's airports. Qatar is also reportedly considering buying the S-400 sophisticated air defense system. Qatar-Russia discussions about the purchase have apparently caused a degree of alarm among the Saudi-led states, with Saudi Arabia going so far as to threaten military action against Qatar if it buys the system. Saudi officials also reportedly asked French President Emmanuel Macron to persuade Qatar not to buy the weapon. Were Qatar to purchase the S-400, it might be subject to U.S. sanctions under Section 231 of the Countering America's Adversaries through Sanctions Act ( P.L. 115-44 ). That section sanctions persons or entities that conduct transactions with Russia's defense or intelligence sector. It mandates the imposition of several sanctions that might include restrictions on certain exports to Qatar, restrictions on Qatari banking activities in the United States, restrictions on Qatari acquisition of property in the United States, and a ban on U.S. investments in any Qatari sovereign debt. U.S.-Qatar's cooperation against groups that both countries agree are terrorist groups, such as the Islamic State organization, is extensive. However, some groups that the United States considers as terrorist organizations, such as Hamas, are considered by Qatar to be Arab movements pursuing legitimate goals. Perhaps in part as a means to attract U.S. support in the context of the intra-GCC rift, on July 10, 2017, Qatar's foreign minister and then-Secretary Tillerson signed in Doha a Memorandum of Understanding on broad U.S.-Qatar counterterrorism cooperation, including but going beyond just combatting terrorism financing. The United States and Qatar held a Counterterrorism Dialogue on November 8, 2017, in which they reaffirmed progress on implementing the MoU. The joint statement of the January 2018 Strategic Dialogue noted "positive progress" under the July 2017 MoU, and thanked Qatar for its action to counter terrorism. The statement also noted the recent conclusion of a memorandum of understanding between the U.S. Attorney General and his Qatari counterpart on the fight against terrorism and its financing and combating cybercrime. In an effort to implement the U.S.-Qatar MoU, and perhaps also as a gesture to the blockading states, on March 22, 2018, the Qatar Ministry of Interior issued list of 19 individuals and eight entities that it considers as "terrorists." The list includes 10 persons who are also are also named as terrorists by the blockading GCC states. On April 2-5, 2018, Qatar held a conference attended by international experts and security professionals from 42 countries. Qatar participates in the State Department's Antiterrorism Assistance (ATA) program to boost domestic security capabilities, and it has continued to participate in and host Global Counterterrorism Forum events. Under the ATA program, participating countries are provided with U.S. training and advice on equipment and techniques to prevent terrorists from entering or moving across their borders. However, Qatari agencies such as the State Security Bureau and the Ministry of Interior have limited manpower and are reliant on nationals from third countries to fill law enforcement positions—a limitation Qatar has tried to address by employing U.S. and other Western-supplied high technology. In the past, at least one high-ranking Qatari official provided support to Al Qaeda figures residing in or transiting Qatar, including suspected September 11, 2001, attacks mastermind Khalid Shaykh Mohammad. None of the September 11 hijackers was a Qatari national. U.S. officials have stated that Qatar is taking steps to prevent terrorism financing and the movement of suspected terrorists into or through Qatar. The country is a member of the Middle East North Africa Financial Action Task Force (MENAFATF), a regional financial action task force that coordinates efforts combatting money laundering and terrorism financing. In 2014, the Amir approved Law Number 14, the "Cybercrime Prevention Law," which criminalized terrorism-linked cyber offenses, and clarified that it is illegal to use an information network to contact a terrorist organization or raise funds for terrorist groups, or to promote the ideology of terrorist organizations. In 2017, the country passed updated terrorism financing legislation. In February 2017, Qatar hosted a meeting of the "Egmont Group" global working group consisting of 152 country Financial Intelligence Units. Qatar is a member of the Terrorist Financing Targeting Center (TFTC), a U.S.-GCC initiative announced during President Trump's May 2017 visit to Saudi Arabia. In October 2017, and despite the intra-GCC rift, Qatar joined the United States and other TFTC countries in designating terrorists affiliated with Al Qaeda and ISIS. The State Department's 2017 report on international terrorism says that, in 2017, Qatar took sweeping measures to monitor and restrict the overseas activities of Qatari charities. According to the State Department's report on international terrorism for 2015, entities and individuals within Qatar continue to serve as a source of financial support for terrorist and violent extremist groups, particularly regional Al Qa'ida affiliates such as the Nusrah Front." The State Department report for 2017 stated: "While the Government of Qatar has made progress on countering the financing of terrorism, terrorist financiers within the country are still able to exploit Qatar's informal financial system." The United States has imposed sanctions on several persons living in Qatar, including Qatari nationals, for allegedly raising funds or making donations to both Al Qaeda and the Islamic State. Qatar has hosted workshops on developing plans to counter violent extremism and has participated in similar sessions hosted by the UAE's Hedayat Center that focuses on that issue. Also in 2015, Qatar pledged funding to the U.N. Office on Drugs and Crime (UNODC) to help address violent extremism and radicalization among youth and vulnerable populations. However, some experts have noted that the government has violated a pledge to the United States not to allow Qatari preachers to conduct what some consider religious incitement in mosques in Education City, where several U.S. universities have branches. Education City was established by the Qatar Foundation, which is at the core of Qatar's strategy to counter violent extremism through investment in education. Even before the June 2017 intra-GCC rift, Qatar had been wrestling with the economic effects of the fall in world energy prices since mid-2014—a development that has caused GCC economic growth to slow, their budgets to fall into deficit, and the balance of their ample sovereign wealth funds to decline. Oil and gas reserves have made Qatar the country with the world's highest per capita income. Qatar is a member of the Organization of the Petroleum Exporting Countries (OPEC), along with other GCC states Saudi Arabia, Kuwait, and UAE and other countries. However, on December 3, 2018, Qatar announced it would withdraw from OPEC in early 2019 in order to focus on its more high-priority natural gas exports. Some observers attributed the decision, at least in part, to the ongoing intra-GCC rift, insofar as rival Saudi Arabia is considered the dominant actor within OPEC. The economic impact on Qatar of the June 2017 intra-GCC rift is difficult to discern. About 40% of Qatar's food was imported from Saudi Arabia precrisis, and there were reports of runs on stocks of food when the blockade began. However, the government's ample financial resources enabled it to quickly arrange substitute sources of goods primarily from Turkey, Iran, and India. The effects on Qatar's growing international air carrier, Qatar Airways, have been significant because of the prohibition on its overflying the blockading states. In November 2017, Iran and Turkey signed a deal with Qatar to facilitate the mutual transiting of goods. Qatar's main sovereign wealth fund, run by the Qatar Investment Authority (QIA), as well as funds held by the Central Bank, total about $350 billion, according to Qatar's Central Bank governor in July 2017, giving the country a substantial cushion to weather its financial demands. QIA's investments consist of real estate and other relatively illiquid holdings, such as interest in London's Canary Wharf project. In May 2016, Qatar offered $9 billion in bonds as a means of raising funds without drawing down its investment holdings. In April 2018, the country raised $12 billion in another, larger, bond issue. Qatar also has cut some subsidies to address its budgetary shortfalls. In early October 2017, it was reported that QIA is considering divesting a large portion of its overseas assets and investing the funds locally—a move that is at least partly attributable to the economic pressures of the intra-GCC rift. The intra-GCC rift has not harmed Qatar's ability to earn substantial funds from energy exports. Oil and gas still account for 92% of Qatar's export earnings, and 56% of government revenues. Proven oil reserves of about 25 billion barrels are far less than those of Saudi Arabia and Kuwait, but enough to enable Qatar to continue its current levels of oil production (about 700,000 barrels per day) for over 50 years. Its proven reserves of natural gas exceed 25 trillion cubic meters, about 13% of the world's total and third largest in the world. Along with Kuwait and UAE, in November 2016 Qatar agreed to a modest oil production cut (about 30,000 barrels per day) as part of an OPEC-wide production cut intended to raise world crude oil prices. Qatar is the world's largest supplier of liquefied natural gas (LNG), which is exported from the large Ras Laffan processing site north of Doha. That facility has been built up with U.S.-made equipment, much of which was exported with the help of about $1 billion in Export-Import Bank loan guarantees. Qatar is a member and hosts the headquarters of the Gas Exporting Countries Forum (GECF), which is a nascent natural gas cartel and includes Iran and Russia, among other countries. State-run Qatar Petroleum is a major investor in the emerging U.S. LNG export market, with a 70% stake (Exxon-Mobil and Conoco-Phillips are minority stakeholders) in an LNG terminal in Texas that is seeking U.S. government approval to expand the facility to the point where it can export over 15 million tons of LNG per year. In June 2018, Qatar Petroleum bought a 30% state in an Exxon-Mobil-run development of an onshore shale natural gas basin in Argentina (Vaca Muerta). Qatar is the source of the gas supplies for the Dolphin Gas Project established by the UAE in 1999 and which became operational in 2007. The project involves production and processing of natural gas from Qatar's offshore North Field, which is connected to Iran's South Pars Field (see Figure 2 ), and transportation of the processed gas by subsea pipeline to the UAE and Oman. Its gas industry gives Qatar some counter leverage against the Saudi-led group, but Qatar has said it will not reduce its gas supplies under existing agreements with other GCC states. Both the UAE and Qatar have filed complaints at the WTO over their boycotting each other's goods; the United States reportedly has backed the UAE's arguments that the WTO does not have the authority to adjudicate issues of national security. Because prices of hydrocarbon exports have fallen dramatically since mid-2014, in 2016 Qatar ran its first budget deficit (about $13 billion). As have other GCC rulers, Qatari leaders assert publicly that the country needs to diversify its economy, that generous benefits and subsidies need to be reduced, and that government must operate more efficiently. At the same time, the leadership apparently seeks to minimize the effect of any cutbacks on Qatari citizens. Still, if oil prices remain far below their 2014 levels and the intra-GCC rift continues much further, it is likely that many Qatari citizens will be required to seek employment in the private sector, which they generally have shunned in favor of less demanding jobs in the government. The national development strategy from 2011 to 2016 focused on Qatar's housing, water, roads, airports, and shipping infrastructure in part to promote economic diversification, as well as to prepare to host the 2022 FIFA World Cup soccer tournament, investing as much as $200 billion. In Doha, the result has been a construction boom, which by some reports has outpaced the capacity of the government to manage, and perhaps fund. A metro transportation system is under construction in Doha. In contrast to the two least wealthy GCC states (Bahrain and Oman), which have free trade agreements with the United States, Qatar and the United States have not negotiated an FTA. However, in April 2004, the United States and Qatar signed a Trade and Investment Framework Agreement (TIFA). Qatar has used the benefits of the more limited agreement to undertake large investments in the United States, including the City Center project in Washington, DC. Also, several U.S. universities and other institutions, such as Cornell University, Carnegie Mellon University, Georgetown University, Brookings Institution, and Rand Corporation, have established branches and offices at the Qatar Foundation's Education City outside Doha. In 2005, Qatar donated $100 million to the victims of Hurricane Katrina. The joint statement of the January 2018 U.S.-Qatar Strategic Dialogue "recognized" QIA's commitment of $45 billion in future investments in U.S. companies and real estate. According to the U.S. Census Bureau's "Foreign Trade Statistics" compilation, the United States exported $4.9 billion in goods to Qatar in 2016 (about $600 million higher than 2015), and imported $1.16 billion worth of Qatari goods in 2016, slightly less than in 2015. U.S. exports to Qatar for 2017 ran about 40% less than the 2016 level, but U.S. imports from Qatar were about the same as in 2016. U.S. exports to Qatar rebounded to $4.4 billion in 2018 and imports were about $1.57 billion. U.S. exports to Qatar consist mainly of aircraft, machinery, and information technology. U.S. imports from Qatar consist mainly of petroleum products, but U.S. imports of Qatar's crude oil or natural gas have declined to negligible levels in recent years, reflecting the significant increase in U.S. domestic production of those commodities. Qatar's growing airline, Qatar Airways, is a major buyer of U.S. commercial aircraft. In October 2016, the airline agreed to purchase from Boeing up to another 100 passenger jets with an estimated value of $18 billion—likely about $10 billion if standard industry discounts are applied. However, some U.S. airlines challenged Qatar Airways' benefits under a U.S.-Qatar "open skies" agreement. The U.S. carriers asserted that the airline's privileges under that agreement should be revoked because the airline's aircraft purchases are subsidized by Qatar's government, giving it an unfair competitive advantage. The Obama Administration did not reopen that agreement in response to the complaints, nor did the Trump Administration. However, the United States and Qatar reached a set of "understandings" on civil aviation on January 29, 2018, committing Qatar Airways to financial transparency and containing some limitations on the airline's ability to pick up passengers in Europe for flights to the United States. Some assert that Qatar Airway's 2018 purchase of Air Italy might represent a violation of those limitations. As one of the wealthiest countries per capita in the world, Qatar gets negligible amounts of U.S. assistance. In FY2016, the United States spent about $100,000 on programs in Qatar, about two-thirds of which was for counternarcotics programming. In FY2015, the United States spent $35,000 on programs in Qatar, of which two-thirds was for counternarcotics.
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The State of Qatar has employed its ample financial resources to exert regional influence separate from and independent of Saudi Arabia, the de facto leader of the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, Qatar, United Arab Emirates, Bahrain, and Oman), an alliance of six Gulf monarchies. Qatar has intervened in several regional conflicts, including in Syria and Libya, and has engaged both Sunni Islamist and Iran-backed Shiite groups in Lebanon, Sudan, the Gaza Strip, Iraq, and Afghanistan. Qatar has maintained consistent dialogue with Iran while also supporting U.S. and GCC efforts to limit Iran's regional influence. Qatar's independent policies, which include supporting regional Muslim Brotherhood organizations and hosting a global media network often critical of Arab leaders called Al Jazeera, have caused a backlash against Qatar by Saudi Arabia and some other GCC members. A rift within the GCC opened on June 5, 2017, when Saudi Arabia, the UAE, and Bahrain, joined by Egypt and a few other governments, severed relations with Qatar and imposed limits on the entry and transit of Qatari nationals and vessels in their territories, waters, and airspace. The Trump Administration has sought, unsuccessfully to date, to mediate a resolution of the dispute. The rift has hindered U.S. efforts to hold another U.S.-GCC summit that would formalize a new "Middle East Strategic Alliance" of the United States, the GCC, and other Sunni-led countries in the region to counter Iran and other regional threats. Qatar has countered the Saudi-led pressure with new arms buys and deepening relations with Turkey and Iran. As do the other GCC leaders, Qatar's leaders have looked to the United States to guarantee their external security since the 1980s. Since 1992, the United States and Qatar have had a formal Defense Cooperation Agreement (DCA) that reportedly addresses a U.S. troop presence in Qatar, consideration of U.S. arms sales to Qatar, U.S. training, and other defense cooperation. Under the DCA, Qatar hosts about 13,000 U.S. forces and the regional headquarters for U.S. Central Command (CENTCOM) at various military facilities, including the large Al Udeid Air Base. U.S. forces in Qatar participate in all U.S. operations in the region. Qatar is a significant buyer of U.S.-made weaponry, including combat aircraft. In January 2018, Qatar and the United States inaugurated a "Strategic Dialogue" to strengthen the U.S.-Qatar defense partnership, which Qatar says might include permanent U.S. basing there. The second iteration of the dialogue, in January 2019, resulted in a U.S.-Qatar memorandum of understanding to expand Al Udeid Air Base to improve and expand accommodation for U.S. military personnel. Qatar signed a broad memorandum of understanding with the United States in 2017 to cooperate against international terrorism. That MOU appeared intended to counter assertions that Qatar's ties to regional Islamist movements support terrorism. The voluntary relinquishing of power in 2013 by Qatar's former Amir (ruler), Shaykh Hamad bin Khalifa Al Thani, departed from GCC patterns of governance in which leaders generally remain in power for life. However, Qatar is the only one of the smaller GCC states that has not yet held elections for a legislative body. U.S. and international reports criticize Qatar for failing to adhere to international standards of labor rights practices, but credit it for taking steps in 2018 to improve the conditions for expatriate workers. As are the other GCC states, Qatar is wrestling with the fluctuations in global hydrocarbons prices since 2014, now compounded by the Saudi-led embargo. Qatar is positioned to weather these headwinds because of its small population and substantial financial reserves. But, Qatar shares with virtually all the other GCC states a lack of economic diversification and reliance on revenues from sales of hydrocarbon products. On December 3, 2018, Qatar announced it would withdraw from the OPEC oil cartel in order to focus on its natural gas export sector.
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U.S. insurers and Congress face new policy issues and questions related to the opportunities and risks presented by the growth in the international insurance market and trade in insurance products. Insurance is often seen as a localized product and U.S. insurance regulation has addressed this through a state-centric regulatory system. The McCarran-Ferguson Act, passed by Congress in 1945, gives primacy to the individual states, and every state has its own insurance regulator and state laws governing insurance. Although the risks of loss and the regulation may be local, the business of insurance, as with many financial services, has an increasingly substantial international component as companies look to grow and diversify. The international aspects of insurance have spurred the creation of a variety of entities and measures, both domestic and foreign, to facilitate the trade and regulation of insurance services. Financial services have been addressed in a number of U.S. trade agreements going back to the North American Free Trade Agreement (NAFTA) in 1994. The International Association of Insurance Supervisors (IAIS) was created more than 20 years ago, largely under the impetus of the U.S. National Association of Insurance Commissioners (NAIC), to promote cooperation and exchange of information among insurance supervisors, including development of regulatory standards. The 2007-2009 financial crisis sparked further international developments, with heads of state of the G-20 nations creating the Financial Stability Board (FSB). The postcrisis 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) altered the U.S. insurance regulatory system, particularly as it relates to international issues. With the states continuing as the primary insurance regulators, following Dodd-Frank, the Federal Reserve exercised holding company oversight over insurers who owned a bank subsidiary or who were designated for enhanced supervision (popularly known as systemically important financial institutions or SIFIs) by the new Financial Stability Oversight Council (FSOC). The FSOC includes a presidentially appointed, independent voting member with insurance expertise as well as a state regulator as a nonvoting member. The Federal Reserve, already a major actor in efforts at the FSB and the Basel Committee on Banking Supervision, thus became a significant insurance supervisor and joined the IAIS shortly thereafter. Dodd-Frank also created a new Federal Insurance Office (FIO). The FIO is not a federal insurance regulator, but is tasked with representing the United States in international fora and, along with the United States Trade Representative (USTR), can negotiate international covered agreements relating to insurance prudential measures. The FIO also became a member of the IAIS and is participating significantly in IAIS efforts to create insurance capital standards. The new federal involvement in insurance issues, both domestic and international, has created frictions both among the federal entities and between the states and the federal entities, and has been a subject of both congressional hearings and proposed legislation. This report discusses trade in insurance services and summarizes the various international entities and agreements affecting the regulation of and trade in insurance. It then addresses particular issues and controversies in greater depth, including the concluded U.S.-EU covered agreement, pending U.S.-UK covered agreement, and issues relating to international insurance standards. It includes an Appendix addressing legislation in the 115 th Congress. In 2017, total U.S. services accounted for $798 billion of U.S. exports and $542 billion of U.S. imports, creating a surplus of $255 billion. In financial services generally, the United States runs a substantial trade surplus, exporting $110 billion and importing $29 billion. In contrast, the United States imported nearly $51 billion in insurance services and exported $18 billion in 2017, mostly due to firms' reliance on foreign reinsurance. This deficit has dropped from its peak in 2009, but U.S. insurance services trade has been consistently in deficit for many years (see Figure 1 ). Global performance by insurance brokers and agencies is concentrated, with Europe, North America, and North Asia accounting for 88.6% of total written premiums. Overall, the North American and European domestic insurance markets are highly competitive and there are fewer suppliers and less competition in the Asia-Pacific region. A third of U.S. insurance services exports are with Asia-Pacific, with Japan accounting for 14% of total U.S. insurance exports in 2017 (see Figure 2 ). Bermuda and the United Kingdom each account for another 15% of U.S. international insurance exports. Industry analysts note that although the current level of trade is relatively low for industry segments such as property, casualty, and direct insurance, it is rising as companies seek new markets for growth and risk diversification. The property casualty market declined from 2013 to 2018, in part due to intensifying natural disasters; however, moving forward, that market is expected to grow due to demand in emerging markets. Services, including financial and insurance services, are traded internationally in accordance with trade agreements negotiated by the USTR on behalf of the United States, similar to trade in goods. As a member of the World Trade Organization (WTO), the United States helped lead the conclusion of negotiations on the General Agreement on Trade in Services (GATS) in 1994, thus creating the first and only multilateral framework of principles and rules for government policies and regulations affecting trade in services among the 164 WTO countries. The GATS provides the foundational floor on which rules in other agreements on services, including U.S. free trade agreements (FTAs), are based. Core GATS principles include most-favored nation (MFN), transparency, and national treatment. As part of the GATS negotiations, WTO members also agreed to binding market access commitments on a positive list basis in which each member specified the sectors covered by its commitments. For insurance services, the United States submitted its schedule of market access and national treatment commitments, as well as exceptions, under GATS to allow foreign companies to compete in the United States in accordance with the U.S. state-based system. The GATS Financial S ervices Annex applies to " all insurance and insurance-related services, and all banking and other financial services (excluding insurance) ." The Annex defines insurance services as follows: (i.) Direct insurance (including co-insurance): (A.) life (B.) non-life (ii.) Reinsurance and retrocession; (iii.) Insurance intermediation, such as brokerage and agency; (iv.) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services. The annex excludes "services supplied in the exe rcise of governmental authority," such as central banks, Social Security, or public pension plans. In the U.S. Schedule of Specific Commitments, the United States lists market access and national treatment limitations that constrain foreign companies' access in line with state laws. These include clarifying which states have no mechanism for licensing initial entry of non-U.S. insurance companies except under certain circumstances and which states require U.S. citizenship for boards of directors. Furthermore, the GATS and U.S. FTAs explicitly protect prudential financial regulation . The prudential exception within the GATS allows members to take " measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system ," even if those measures do not comply with the agreement. Most U.S. FTAs contain a chapter on financial services that builds on the commitments under GATS ("WTO-plus"). Like GATS, these chapters exclude government-provided public services. In addition to market access, national treatment, and MFN obligations, FTAs include WTO-plus obligations, such as increased transparency by providing interested persons from one party the opportunity to comment on proposed regulations of another party; allowing foreign providers to supply new financial services if domestic companies are permitted to do so; and providing access to public payment and clearing systems. Each FTA chapter defines the specific financial and insurance services covered and incorporates relevant provisions in other FTA chapters, such as Investment and Cross-Border Services. On November 30, 2018, President Trump and the leaders of Canada and Mexico signed the United States-Mexico-Canada Trade Agreement (USMCA) to update and revise the North American Free Trade Agreement (NAFTA). Still subject to congressional approval, the proposed USMCA contains several differences from NAFTA and is seen as representing the Trump Administration's approach to trade agreements. The proposed agreement has some similarities and differences from the proposed Trans-Pacific Partnership (TPP), which was negotiated under the Obama Administration and from which the United States withdrew in 2017. Given that the TPP also included both Mexico and Canada, many observers saw it as a template for the NAFTA renegotiations on certain issues. Like the TPP, the financial services chapter in the proposed USMCA reflects the growing trade in insurance and is an example of extensive and enforceable "WTO-plus" commitments. Compared with NAFTA, the proposed agreement clarifies the coverage of insurance services and contains a specific new provision on expedited availability of insurance services and transparency requirements designed to ensure the use of good regulatory practices to better enable U.S. firms to do business in those markets. In contrast to NAFTA, the proposed USMCA would apply both national treatment and market access obligations to cross-border supply of insurance services. The USMCA provisions on cross-border data flows are stronger than similar provisions in recent U.S. FTAs. They would, for example, prohibit the use of data or computing localization requirements for financial services. Canada would have one year to comply with the ban, and it would need to remove existing localization requirements that have been a trade barrier for U.S. firms seeking to do business in Canada. Many provisions in the USMCA Digital Trade chapter are relevant to the insurance industry, such as permitting electronic signatures, protecting source code and algorithms, promoting cybersecurity, and allowing cross-border data flows. By contrast, some changes in the investor-state dispute settlement system (ISDS) provide a narrower scope than in TPP or NAFTA, and ISDS would apply only to certain U.S. or Mexican covered investments, excluding Canada completely. Changes in the state-to-state dispute settlement system also may limit its effectiveness for the insurance sector in certain situations. These changes have raised concerns among insurance companies. Similar to other trade agreements, the proposed USMCA would establish a Committee on Financial Services and provide for consultations between the parties on ongoing implementation and other issues of interest. In comparison to trade agreements, a covered agreement is a relatively new form of an international agreement, established along with the FIO in Title V of the Dodd-Frank Act. The statute defines a covered agreement as a type of international insurance or reinsurance agreement for recognition of prudential measures that the FIO and the USTR negotiate on a bilateral or multilateral basis. FIO has no regulatory authority over the insurance industry, which is generally regulated by the individual states. This is a significant contrast to, for example, federal financial regulators, such as the Federal Reserve or the Securities and Exchange Commission (SEC), that might enter into international regulatory agreements at the Basel Committee on Banking Supervision or the International Organization of Securities Commissions, respectively. After such agreements are reached, the Federal Reserve or SEC would generally then implement the agreements under its regulatory authority using the federal rulemaking process. Although the FIO lacks regulatory authority, some state laws may be preempted if the FIO director determines that a state measure (1) is inconsistent with a covered agreement and (2) results in less favorable treatment for foreign insurers. The statute limits the preemption with the following provision: (j) Savings Provisions. — Nothing in this section shall— (1) preempt— (A) any State insurance measure that governs any insurer's rates, premiums, underwriting, or sales practices; (B) any State coverage requirements for insurance; (C) the application of the antitrust laws of any State to the business of insurance; or (D) any State insurance measure governing the capital or solvency of an insurer, except to the extent that such State insurance measure results in less favorable treatment of a non-United State insurer than a United States insurer. Further strictures are placed on the FIO determination, including notice to the states involved and to congressional committees; public notice and comment in the Federal Register ; and the specific application of the Administrative Procedure Act, including de novo determination by courts in a judicial review. Although there is no legal precedent interpreting the covered agreement statute, it appears that these provisions would narrow the breadth of any covered agreement, particularly compared with other international agreements reached by federal financial regulators. International agreements have been undertaken without direct congressional direction under agencies' existing regulatory authorities. These authorities are then implemented through the regulatory rulemaking process, which may, in some cases, preempt state laws and regulations. Although the FIO and the USTR must consult with Congress on covered agreement negotiations, the statute does not require specific authorization or approval from Congress for a covered agreement. It does, however, require a 90-day layover period. Although the goals of a covered agreement and aspects of trade agreements may be similar—market access and regulatory compatibility—the role of Congress is different in each instance. Congress has direct constitutional authority over foreign commerce, while Congress has given itself a consultative role in insurance negotiations through the Dodd-Frank Act. The U.S. Constitution assigns express authority over foreign trade to Congress. Article I, Section 8, of the Constitution gives Congress the power to "regulate commerce with foreign nations" and to "lay and collect taxes, duties, imposts, and excises." U.S. trade agreements such as the North American Free Trade Agreement (NAFTA), WTO agreements, and bilateral FTAs have been approved by majority vote of each house rather than by two-thirds vote of the Senate—that is, they have been treated as congressional-executive agreements rather than as treaties. This practice contrasts with the covered agreements, defined by Dodd-Frank (see above), which require congressional notification and a 90-day layover. The layover time could give Congress time to act on the agreement if Congress chooses, but congressional action is not required for a covered agreement to take effect. In further contrast, as mentioned previously, international agreements entered into by federal financial regulators, such as the Basel Capital accords in banking, have no specific congressional notification requirements, but must be implemented through the rulemaking process. U.S. bilateral, regional, and free trade agreements are conducted under the auspices of Trade Promotion Authority (TPA). TPA is the time-limited authority that Congress uses to set U.S. trade negotiating objectives, establish notification and consultation requirements, and allow implementing bills for certain reciprocal trade agreements to be considered under expedited procedures, provided certain statutory requirements are met. As noted above, the Dodd-Frank Act requires that the FIO or the Treasury Secretary and the USTR notify and consult with Congress before and during negotiations on a covered agreement. In addition, it requires the submission of the agreement and a layover period of 90 days, but does not require congressional approval. By contrast, legislation implementing FTAs must be approved by Congress. Under TPA, the President must fulfill notification and consultative requirements in order to begin negotiations and during negotiations. Once the negotiations are concluded, the President must notify Congress 90 days prior to signing the agreement. After the agreement is signed, there are additional reporting requirements to disclose texts and release the U.S. International Trade Commission's economic assessment of the agreement. The introduction of implementing legislation sets off a 90-legislative-day maximum period of time for congressional consideration, and the legislation is accompanied by additional reports. If these notification and consultation procedures are not met to the satisfaction of Congress, procedures are available to remove expedited treatment from the implementing legislation. As discussed above, the FIO and the USTR jointly negotiate covered agreements, with the states having a consultative role set in the statute. In international trade agreements the USTR is the lead U.S. negotiator, with representatives from executive branch agencies participating to provide expertise. In addition to consultations within the executive branch under an interagency process, USTR formally consults with state governments and regulators through the Intergovernmental Policy Advisory Committee on Trade (IGPAC) as part of the USTR advisory committee system for trade negotiations. USTR's Office of Intergovernmental Affairs and Public Engagement (IAPE) manages the advisory committees and provides outreach to official state points of contact, governors, legislatures, and associations on all trade issues of interest to states. The USTR cannot make commitments on behalf of U.S. states in trade negotiations. This can be a source of frustration for negotiating partners who seek market openings at the state level. As part of trade negotiations, USTR may try to persuade individual states to make regulatory changes, but USTR is limited to what state regulators voluntarily consent to do. In general, state laws and state insurance regulations are explicitly exempted from trade negotiations. For example, in the proposed USMCA agreement, the United States listed measures for which the FTA obligations would not apply, including "All existing non-conforming measures of all states of the United States, the District of Columbia, and Puerto Rico." In contrast, as explained above, in the context of a covered agreement, FIO and USTR may make limited commitments that result in preempting some state laws and regulations. In general, international trade agreements are binding agreements. If a party to a trade agreement believes another party has adopted a law, regulation, or practice that violates the commitments under the trade agreement, the party may initiate dispute settlement proceedings under the agreement's dispute settlement provisions, which may differ for each agreement. Each party to a trade agreement has an obligation to comply with dispute resolution rulings or potentially face withdrawal of certain benefits under the agreement. Dodd-Frank does not specify how disagreements might be resolved in covered agreements, thus each covered agreement would need to clarify the dispute resolution process. As discussed, U.S. FTAs include market access commitments and rules and disciplines governing financial services measures, such as nondiscrimination and transparency obligations. Although FTAs customarily establish a Financial Services Committee composed of each party's regulators to oversee implementation of the agreement and provide a forum for communication, U.S. FTAs to date exclude regulatory cooperation commitments for the financial services sector, though this is subject to change in future trade agreements. On October 16, 2018, the Trump Administration notified Congress, under Trade Promotion Authority (TPA), of its intent to enter trade agreement negotiations with the European Union (EU), its largest overall trade and investment partner. The negotiating objectives published by USTR include to "expand competitive market opportunities for U.S. financial service suppliers to obtain fairer and more open conditions of financial services trade" and "improve transparency and predictability in the EU's financial services regulatory procedures, and ensure that the EU's financial regulatory measures are administered in an equitable manner." The EU member states are currently discussing the scope of the EU negotiating mandate, and U.S.-EU preparatory talks have been ongoing. In prior trade agreement negotiations between the two sides, the EU sought to include regulatory cooperation issues that could have addressed some of the same matters as the recent U.S.-EU covered agreement (see below). Some Members of Congress supported this position, whereas U.S. financial regulators opposed the inclusion at that time. During the prior negotiations, the United States and the EU agreed to establish the Joint U.S.-EU Financial Regulatory Forum, which has met regularly. U.S. participants include representatives of the Treasury Department, Federal Reserve, Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), SEC, and Office of the Comptroller of the Currency (OCC). The forum meetings include discussions of financial regulatory reforms, agency priorities, assessments of the cross-border impact of regulation, and cooperation efforts on specific financial issues. On September 22, 2017, the United States and European Union signed the first bilateral insurance covered agreement. The covered agreement had been submitted to the House Committees on Financial Services and Ways and Means and the Senate Committees on Banking, Housing, and Urban Affairs and Finance on January 13, 2017. As noted above, a 90-day layover period is mandated in statute to allow Congress to review the agreement. The House Financial Services Committee Subcommittee on Housing and Insurance and the Senate Committee on Banking, Housing, and Urban Affairs each held a hearing on the agreement, but no legislative action affecting the agreement occurred. To address concerns among U.S. insurance firms that their market access to the EU would become limited due to changes in EU regulatory policy, in November 2015, the Obama Administration notified Congress regarding plans to begin negotiations with the EU on a covered agreement. Expressed goals for the negotiations included (1) achieving recognition of the U.S. regulatory system by the EU, particularly through an "equivalency" determination by the EU that would allow U.S. insurers and reinsurers to operate throughout the EU without increased regulatory burdens, and (2) obtaining uniform treatment of EU-based reinsurers operating in the United States, particularly with respect to collateral requirements. The issue of equivalency for U.S. regulation is a relatively new one, as Solvency II only came into effect at the beginning of 2016 (see " The European Union, Solvency II, and Equivalency " below), whereas the question of reinsurance collateral has been a concern of the EU for many years (see " Reinsurance Collateral " below). The covered agreement negotiations also sought to facilitate the exchange of confidential information among supervisors across borders. According to the USTR and Treasury, the bilateral agreement allows U.S. and EU insurers to rely on their home country regulators for worldwide prudential insurance group supervision when operating in either market; eliminates collateral and local presence requirements for reinsurers meeting certain solvency and market conduct conditions; and encourages information sharing between insurance supervisors. The proposal sets time lines for each side to make the necessary changes and allows either side to not apply the agreement if the other side falls short on full implementation. Unlike the goals expressed to Congress when negotiations began, the agreement does not explicitly call for equivalency recognition of the U.S. insurance regulatory system by the EU. However, the agreement's provisions on group supervision would seem to meet the same goal of reducing the regulatory burden on U.S. insurers operating inside the EU. The proposal goes beyond a previous state-level proposal on reinsurance collateral requirements put forth by the NAIC and adopted by many states, and allows for the possibility of federal preemption if states are not in compliance. Several U.S. industry groups welcomed the agreement, including the American Insurance Association (AIA), the Reinsurance Association of America, and the American Council of Life Insurers (ACLI) . The AIA's senior vice president and general counsel noted that, "when negotiations began, U.S. insurance and reinsurance groups were facing growing obstacles to their ability to do business in Europe, but this agreement removes those barriers—affirming not only each other's regulatory systems, but also their commitments to non-discriminatory treatment and open, reciprocal, competitive insurance markets." State regulators and state lawmakers , respectively represented by the NAIC and National Council of Insurance Legislators (NCOIL), expressed concern with the agreement due to the limited state involvement in the negotiation process and the potential federal preemption of state laws and regulations. NCOIL expressed disappointment with the final signing, stating "this agreement is an intrusion by both the federal government and international regulatory authorities into the U.S. state based regulation of insurance regulation." Some insurers also question the utility of the agreement, with the president of the National Association of Mutual Insurance Companies (NAMIC) seeing ambiguity that "will result in confusion and potentially endless negotiations with Europe on insurance regulation." As mentioned, the agreement includes a review after an initial implementation period, at which time either the United States or EU may pull out of the agreement. The covered agreement aims to address EU concerns regarding U.S. state regulatory requirements that reinsurance issued by non-U.S. or alien reinsurers must be backed by collateral deposited in the United States. In the past, this requirement was generally for a 100% collateral deposit. Non-U.S. reinsurers long resisted this requirement, pointing out, among other arguments, that U.S. reinsurers do not have any collateral requirements in many foreign countries and that the current regulations do not recognize when an alien reinsurer cedes some of the risk back to a U.S. reinsurer. Formerly, the NAIC and the individual states declined to reduce collateral requirements, citing fears of unpaid claims from non-U.S. reinsurers and an inability to collect judgments in courts overseas. This stance, however, has changed in recent years. In 2010, an NAIC Task Force approved recommendations to reduce required collateral based on the financial strength of the reinsurer involved and recognition of the insurer's domiciliary regulator as a qualified jurisdiction. The NAIC, in November 2011, adopted this proposal as a model law and accompanying model regulation. To take effect, however, these changes must be made to state law and regulation by the individual state legislatures and insurance regulators. The reinsurance models are part of the NAIC accreditation standards, and all states are expected to adopt them by 2019. According to information provided to CRS by the NAIC, as of December 2018, 49 states have adopted the model law and 42 have adopted the accompanying regulation. To date, 29 reinsurers have been approved by the states as certified reinsurers for reduction in collateral requirements. To receive the reduced collateral requirements, the reinsurer's home jurisdiction must also be reviewed and listed on the NAIC List of Qualified Jurisdictions. As of January 2019, seven jurisdictions have been approved. The state actions addressing reinsurance collateral requirements, however, have not fully met concerns of foreign insurers regarding the issue. Non-U.S. reinsurers reportedly would like a single standard across the United States that would eliminate, not just reduce, collateral requirements. This desire was a significant part of the EU's expressed motivation to enter into covered agreement negotiations. A Council of the EU representative indicated that "an agreement with the U.S. will greatly facilitate trade in reinsurance and related activities" and would "enable us, for instance, to recognize each other's prudential rules and help supervisors exchange information." The covered agreement also aims to assist U.S. insurers concerned with potential regulatory burdens in relation to EU market requirements that went into effect in 2016. The European Union's Solvency II is part of a project aimed at transforming the EU into a single market for financial services, including insurance. In some ways, Solvency II is purely an internal EU project designed to more closely harmonize laws among the EU countries. However, as part of the Solvency II project, new equivalency determinations of foreign jurisdictions are to be made by the EU. An equivalency determination would allow insurers from a foreign jurisdiction to operate throughout the EU as do EU insurers. If the U.S. system of state-centered supervision of insurers were not judged to be "equivalent" to the EU insurance supervision, U.S. insurers could face more difficulty in operating in EU markets. Past suggestions have been made that an EU regulatory change might serve as "a useful tool in international trade negotiations as it could help improve access for European reinsurers to foreign markets," such as the United States. A June 6, 2014, letter from the European Commission to FIO and the NAIC drew an explicit connection between an equivalency designation applying to the United States and the U.S. removal of reinsurance capital requirements that the states place on non-U.S. reinsurers. Solvency II came into effect in the EU at the beginning of 2016. The EU has granted provisional equivalence to the United States along with five other countries and equivalence to three countries. The grant of provisional U.S. equivalence, however, applies only to capital requirements of EU insurers with U.S. operations, and U.S. insurers had reported experiencing difficulties with their operation in EU countries prior to the signing of the covered agreement. Following the 2016 referendum on the United Kingdom remaining in the European Union (popularly known as Brexit ), the UK is scheduled to leave the EU by March 29, 2019. The future status and terms of the UK withdrawal from the EU is highly uncertain. Withdrawal from the EU may leave the UK outside the scope of any existing EU international agreements, including the U.S.-EU covered agreement. Thus, insurance trade between the United States and the UK could be negatively affected. As noted, the UK is an important market for U.S. firms, accounting for more than half of U.S. insurance exports in 2017. The United States and UK negotiated a separate covered agreement to address the potential disruption to insurance trade under Brexit. Announced on December 11, 2018, the substantive provisions of the U.S.-UK agreement mirror those in the U.S.-EU covered agreement—reinsurance capital and local presence requirements are to be eliminated and home country regulation is to be recognized for worldwide group supervision. According to the USTR and Treasury Department, the bilateral agreement aims to provide "regulatory certainty and market continuity" for U.S. and UK firms operating in the two markets. The Administration submitted the final text to Congress on December 11, 2018, starting the 90-day layover period for Congress to review the agreement prior to signature. The agreement implicitly recognizes the uncertainty regarding Brexit and will not come into effect until both parties provide notification that their internal procedures have been completed with the UK specifically taking account "of its obligations arising in respect of any agreement between the EU and the UK pursuant to Article 50 of the Treaty on European Union." The U.S.-UK covered agreement has been welcomed by most insurance stakeholders for addressing the uncertainty surrounding Brexit. For example, although the NAIC continues to have "concerns with the covered agreement mechanism, [the NAIC does] not object to its use in this instance to replicate consistent treatment for the UK." In addition to the covered agreement, on October 16, 2018, the Administration formally notified Congress of its intent to enter into negotiations of a bilateral U.S.-UK free trade agreement. Whether an agreement would include financial services regulatory cooperation is unclear, and the United States and the UK would not be able to start formal trade negotiations until the UK officially leaves the EU. The U.S.-EU and U.S.-UK covered agreements as negotiated apply only to the jurisdictions that are party to the respective agreements. The United States, however, engages in a significant amount of trade in insurance services with other countries. Depending on what changes might be made to state insurance laws, reinsurers from other countries such as Bermuda or Japan could continue to face collateral requirements when offering products in the United States while competing with EU reinsurers free from such requirements. Two primary policy approaches are being considered to address concerns regarding an uneven playing field between European and non-European reinsurers. It would be possible to negotiate additional covered agreements with non-European jurisdictions, as was done with the UK. In addition to the negotiation of new covered agreements, state laws enacted in response to the U.S.-EU covered agreement might themselves remove reinsurance collateral requirements for all or some non-EU jurisdictions. The NAIC is in the process of adopting an updated model law regarding reinsurance collateral, which would do this for a subset of "qualified jurisdictions" including Japan, Bermuda, and Switzerland. Outside of international trade negotiations and agreements, two separate but interrelated entities have the most significant impact on international insurance issues in the United States: the Financial Stability Board and the International Association of Insurance Supervisors. The FSB was established in April 2009 by G-20 nations to help strengthen the global financial system following the 2008 financial crisis. The FSB's functions include assessing vulnerabilities to the global financial system; coordinating with financial authorities of member nations; and recommending measures to protect and strengthen the global financial system. The FSB's members comprise financial regulatory agencies of G-20 nations. U.S. FSB members are the Department of the Treasury, the Federal Reserve, and the SEC; no insurance-focused representative from the United States is included. The FSB's recommendations and decisions are not legally binding on any of its member nations. Rather, the FSB "operates by moral suasion and peer pressure, in order to set internationally agreed policies and minimum standards that its members commit to implementing at national level." The IAIS, created in 1994, is the international standard-setting body, establishing a variety of guidance documents and conducting educational efforts for the insurance sector. Its mission is "to promote effective and globally consistent supervision of the insurance industry." The IAIS is primarily made up of insurance regulators worldwide with most jurisdictions having membership. U.S. members include all the individual states, the NAIC, the Federal Reserve, and the Federal Insurance Office. FIO and the Federal Reserve became IAIS members only after the passage of the Dodd-Frank Act. These U.S. members serve on many IAIS committees and working groups and have held various committee positions, past and present. An NAIC representative serves as chair of the IAIS Policy Development Committee, which plays a central role in drafting IAIS-proposed standards; the FIO director previously served as chair of this committee's prior incarnation, the IAIS Financial Stability and Technical Committee. The NAIC coordinates individual state participation in IAIS committees and working groups. According to the NAIC, three NAIC members serve on the IAIS Executive Committee, including one as vice chair; three serve on the Policy Development Committee; and three serve on the Macroprudential Committee. The NAIC's 56 members have 15 votes in the IAIS general meetings, with the NAIC designating which of its members may exercise their votes. Figure 3 provides a graphical representation of the relationships between international entities and their U.S. members. As part of its monitoring of global financial stability, the FSB has designated a number of financial institutions as globally systemically important. An FSB designation is meant to indicate that the failure of an individual institution could have a negative impact on the global financial system. Initially, the designation focused on global systemically important banks (G-SIBs) , but it also encompasses global systemically important insurers (G-SIIs), and nonbank noninsurer global systemically important financial institutions (NBNI G-SIFIs) , such as large asset managers, broker-dealers, and hedge funds. Designated institutions are expected to meet higher qualitative and quantitative regulatory and capital standards to help ensure their stability during a crisis. Although the FSB designations may be similar in intent to the designations done under the FSOC in the United States, FSB designations are a separate process with somewhat different criteria. In 2016, the FSB designated nine G-SIIs, including three U.S. insurers (AIG, MetLife, and Prudential Financial). The FSB also had requested that the IAIS develop capital standards and other regulatory measures to apply to G-SIIs as well as Internationally Active Insurance Groups (IAIGs), a wider set of insurers that fall short of the G-SII designation. In 2017, the FSB did not publish a new G-SII list, allowing the 2016 list to continue to be in effect. In 2018, the FSB decided not to identify G-SIIs, and it may suspend or discontinue the identification of G-SIIs depending on a new IAIS "holistic framework" to address systemic risk based on specific activities rather than individual firm designations. In addition to the standards addressing systemic risk, the IAIS is developing a general Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame). ComFrame encompasses a range of supervisory standards, particularly capital standards for IAIGs. The ComFrame process dates to 2010; currently, a public comment period has ended for a draft of the overall framework and a "2.0" version of specific insurance capital standards, with additional consultations continuing and formal adoption scheduled at the end of 2019. In general, actions undertaken by international bodies, such as the FSB's designations of G-SIIs or adoption of capital standards by the IAIS, have no immediate effect on the regulatory system within the United States. To be implemented, such standards must be adopted by regulators in the United States or enacted into law if regulators do not already have sufficient legal authority to adopt the standards. In many cases, it is expected that members of such international bodies will adopt the agreed-to standards. For example, the Basel Committee on Bank Supervision (BCBS) charter includes among the members' responsibilities that they commit to "implement and apply BCBS standards in their domestic jurisdictions within the pre-defined timeframe established by the Committee." In some situations, the translation from international standard to national implementation may be relatively straightforward because the agencies agreeing to the international standards are the same agencies that have the authority to implement the standards at home. The mix of federal and state authorities over insurance in the United States, however, has the potential to complicate the adoption of international standards, such as the IAIS's capital standards that are under development. In the case of insurance, the U.S. representation at the IAIS includes (1) the NAIC, which collectively represents the U.S. state regulators, but has no regulatory authority of its own; (2) the 56 different states and territories, which collectively regulate the entire U.S. insurance market, but individually oversee only individual states and territories; (3) the Federal Reserve, which has holding company oversight only over designated systemically significant insurers and insurers with depository subsidiaries; and (4) the FIO, which has authority to monitor and report but no specific regulatory authority. Thus, it is possible for a situation to develop where some part of the U.S. representation at the IAIS may agree to particular policies or standards without agreement by the entity having authority to actually implement the policies or standards that are being agreed to. Although international standards may not be self-executing, nations may still face pressures to implement these standards. For example, the International Monetary Fund performs a Financial Sector Assessment Program (FSAP) of many countries every five years. In the latest FSAPs from 2010 and 2015, the judgments and recommendations offered regarding the U.S. insurance regulatory system compared U.S. laws and regulations to core principles adopted by the IAIS. Although U.S. regulators generally accept the IAIS core principles, the FSAP does note that state regulators specifically "disagree with a few of the ratings ascribed to certain" core principles and the states "do not believe that each of the proposed regulatory reforms recommended in the Report is warranted, or would necessarily result in more effective supervision." Pressure may also derive from internationally active market participants, including both domestic and foreign firms. Companies operating in different jurisdictions incur costs adapting to different regulatory environments. To minimize these costs, companies may pressure jurisdictions to adopt similar rules. Even if one country's rules might be more favorable to the company seen in the abstract, it may still be more efficient for a company if all the countries adopt slightly less favorable, but substantially similar, rules. Thus, for example, a U.S. company operating in multiple countries might favor adoption of U.S. regulations similar to international standards to simplify business operations, even if it finds the U.S. regulations generally preferable. Those concerned about potential international insurance standards often raise the possibility that these standards may be "bank-like" and thus inappropriate for application to insurers. A primary concern in this regard is the treatment of financial groups. In banking regulation, a group holding company is expected, if not legally required, to provide financial assistance to subsidiaries if necessary. In addition, safety and soundness regulations may be applied at a group-wide level. A somewhat similar focus on the group-wide level is also found in the EU's Solvency II and in possible future IAIS standards. Within U.S. insurance regulation, however, state regulators in the United States historically have focused on the individual legal entities and on ensuring that the specific subsidiaries have sufficient capital to fulfill the promises inherent in the contracts made with policyholders. Since the financial crisis, the U.S. regulators have increased oversight at the overall group level, but the possible movement of capital between subsidiaries remains an issue. The NAIC has indicated specifically that "it is critical that the free flow of capital (i.e., assets) across a group should not jeopardize the financial strength of any insurer in the group." A group-wide approach that facilitates capital movement among subsidiaries could potentially improve financial stability as a whole if it prevents a large financial firm from becoming insolvent in the short run. It also could provide protection for individual policyholders if it results in additional resources being made available to pay immediate claims. Potential movement of capital within groups, however, could also potentially reduce financial stability if it were to cause customers to doubt the payment of future claims and thus promote panic or contagion. Free movement of capital across subsidiaries could also harm policyholders in the future if it results in insufficient capital to pay such claims. The 116 th Congress faces an immediate issue regarding the U.S.-UK covered agreement. This agreement is currently in its statutory 90-day layover period (which began December 11, 2018) before it can take effect. Congress could enact legislation directly affecting the agreement, conduct hearings or other oversight mechanisms, or allow the covered agreement to take effect without direct action. The U.S.-UK covered agreement may not be the only international insurance issue before this Congress. With expected continued growth in the international insurance market and differences in regulatory approaches, the frictions between U.S. and foreign regulators as well as between state and federal regulators seem likely to continue. Congress may choose to address these issues in multiple ways including, for example, amending Dodd-Frank and the statutory role of FIO and the USTR in international insurance negotiations; legislating an increased role for states in U.S. representation to international insurance regulatory entities; endorsing international insurance standards and legislating their adoption by states; encouraging additional covered agreements to address the countries not covered by the current ones; or encouraging the inclusion of insurance services as part of negotiations of potential free trade agreements. The following summarizes legislation addressing international insurance issues in the 115 th Congress. Legislation is ordered according to the stage to which it advanced in the legislative process. Economic Growth, Regulatory Relief, and Consumer Protection Act ( P.L. 115-174 / S. 2155 ) S. 2155 was introduced by Senator Michael Crapo and 19 cosponsors on November 16, 2017. The bill, covering a broad range of financial services provisions largely dealing with noninsurance issues, was marked up and reported on a vote of 16-7 by the Senate Committee on Banking, Housing, and Urban Affairs in December 2017. A new section was added during the Senate committee markup with language similar to S. 1360 (discussed below). S. 2155 passed the Senate by a vote of 67-31 on March 14, 2018. The House passed S. 2155 without amendment on May 22, 2018, and the President signed the bill into P.L. 115-174 on May 24, 2018. Section 211 of P.L. 115-174 finds that the Treasury, Federal Reserve, and FIO director shall support transparency in international insurance fora and shall "achieve consensus positions with State insurance regulators through the [NAIC]" when taking positions in international fora. It creates an "Insurance Policy Advisory Committee on International Capital Standards and Other Insurance Issues" at the Federal Reserve made up of 21 members with expertise on various aspects of insurance. The Federal Reserve and the Department of the Treasury are to complete an annual report and to provide testimony on the ongoing discussions at the IAIS through 2022, and the Federal Reserve and FIO are to complete a study and report, along with the opportunity for public comment and review by the Government Accountability Office (GAO), on the impact of international capital standards or other proposals prior to agreeing to such standards. Unlike S. 1360 , however, the enacted law does not have specific requirements on the final text of any international capital standard. After signing S. 2155 , the President released a statement indicating that the congressional directions in the findings contravene the President's "exclusive constitutional authority to determine the time, scope, and objectives of international negotiations" but that the President will "give careful and respectful consideration to the preferences expressed by the Congress in section 211(a) and will consult with State officials as appropriate." International Insurance Standards Act ( H.R. 4537 / S. 488 , Title XIV) Representative Sean Duffy, along with seven cosponsors, introduced H.R. 4537 on December 4, 2017. (A substantially similar bill, H.R. 3762 , was previously introduced and addressed in an October 24, 2017, hearing by the House Financial Services' Subcommittee on Housing and Insurance.) H.R. 4537 was marked up and ordered reported on a vote of 56-4 by the House Committee on Financial Services on December 12-13, 2017. It was reported ( H.Rept. 115-804 ) on July 3, 2018. The House considered a further amended version on July 10, 2018, and passed it under suspension of the rule by a voice vote. H.R. 4537 was not taken up by the Senate in the 115 th Congress. S. 488 originally was introduced by Senator Pat Toomey as the Encouraging Employee Ownership Act, increasing the threshold for disclosure relating to compensatory benefit plans. After Senate passage on September 11, 2017, it was taken up in the House and amended with a number of different provisions, mostly focusing on securities regulation. Title XIV of the amended version of S. 488 , however, was nearly identical to H.R. 4537 as it passed the House. The House-passed version of S. 488 was not taken up by the Senate in the 115 th Congress. H.R. 4537 as passed by the House and S. 488 as passed by the House would have instituted a number of requirements relating to international insurance standards and insurance covered agreements. U.S. federal representatives in international fora would have been directed not to agree to any proposal that does not recognize the U.S. system as satisfying that proposal. Such representatives would have been required to consult and coordinate with the state insurance regulators and with Congress prior to and during negotiations and to submit a report to Congress prior to entering into an agreement. With regard to future covered agreements, the bill would have required U.S. negotiators to provide congressional access to negotiating texts and to "closely consult and coordinate with State insurance commissioners." Future covered agreements were to be submitted to Congress for possible disapproval under "fast track" legislative provisions. The Congressional Budget Office's cost estimate on H.R. 4537 as reported from committee found that, Any budgetary effects of enacting H.R. 4537 would depend, in part, on how often the United States negotiates international insurance agreements and how frequently the negotiators must consult and coordinate with state insurance commissioners. CBO has no basis for predicting that frequency but expects that the cost of such consultations would be less than $500,000 per year. International Insurance Capital Standards Accountability Act of 2017 ( S. 1360 ) S. 1360 was introduced by Senator Dean Heller with cosponsor Senator Jon Tester on June 14, 2017, and referred to the Senate Committee on Banking, Housing, and Urban Affairs. Similar language to S. 1360 was added to P.L. 115-174 / S. 2155 as discussed above. S. 1360 would have created an "Insurance Policy Advisory Committee on International Capital Standards and Other Insurance Issues" at the Federal Reserve made up of 11 members with expertise on various aspects of insurance. It would have required both an annual report and testimony from the Federal Reserve and the Department of the Treasury on the ongoing discussions at the IAIS through 2020. The Federal Reserve and FIO would have been required to complete a study and report, along with the opportunity for public comment and review by GAO, on the impact of international capital standards or other proposals prior to agreeing to such standards. Any final text of an international capital standard would have been required to be published in the Federal Register for comment and could not have been inconsistent with either state or Federal Reserve capital standards for insurers. International Insurance Standards Act of 2017 ( H.R. 3762 ) H.R. 3762 was introduced by Representative Sean Duffy with cosponsor Representative Denny Heck on September 13, 2017. It was addressed in an October 24, 2017, hearing by the House Financial Services' Subcommittee on Housing and Insurance, but it was not the subject of further committee action. The sponsor introduced an identically titled and substantially similar bill, H.R. 4537 , which was ordered reported by the House Committee on Financial Services on December 13, 2017. See the above section on H.R. 4537 for more information on the bill. Federal Insurance Office Reform Act of 2017 ( H.R. 3861 ) H.R. 3861 was introduced by Representative Sean Duffy with cosponsor Representative Denny Heck on September 28, 2017. It was addressed in an October 24, 2017, hearing by the House Financial Services' Subcommittee on Housing and Insurance, but it was not the subject of further action. H.R. 3861 would have amended the Dodd-Frank Act provisions creating the Federal Insurance Office, generally limiting the focus and size of FIO. It would have placed FIO specifically within the Office of International Affairs and narrowed its function in international issues to representing the Treasury rather than all of the United States. It also would have required FIO to reach a consensus with the states on international matters. The bill would have removed FIO's authority to collect and analyze information from insurers, including its subpoena power, and to issue reports with this information. Under the bill, the authority to preempt state laws pursuant to covered agreements would have rested with the Secretary of the Treasury, and FIO would have been limited to five employees.
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The growth of the international insurance market and trade in insurance products and services has created opportunities and new policy issues for U.S. insurers, Congress, and the U.S. financial system. Insurance regulation is centered on the states, with the federal government having a limited role. Although the risks of loss and the regulation may be local, the business of insurance, as with many financial services, has an increasingly substantial international component as companies and investors look to grow and diversify. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank; P.L. 111-203) enhanced the federal role in insurance markets through several provisions, including the Financial Stability Oversight Council's (FSOC's) ability to designate insurers as systemically important financial institutions (SIFIs); Federal Reserve oversight of SIFIs and insurers with depository affiliates; and the creation of a Federal Insurance Office (FIO) inside the Department of the Treasury. Alongside FIO, Dodd-Frank defined a new class of international insurance agreements called covered agreements for recognition of prudential measures which the FIO and the United States Trade Representative (USTR) may negotiate with foreign entities. Although not a regulator, FIO has the authority to monitor the insurance industry and limited power to preempt state laws in conjunction with covered agreements. Dodd-Frank requires congressional consultations and a 90-day layover period for covered agreements, but such agreements do not require congressional approval. International Insurance Stakeholders and Concerns The international response to the financial crisis included the creation of a Financial Stability Board (FSB), largely made up of various countries' financial regulators, and increasing the focus of the International Association of Insurance Supervisors (IAIS) on creating regulatory standards, especially relating to insurer capital levels. The Federal Reserve and the FIO have assumed roles in the IAIS, whereas previously the individual states and the U.S. National Association of Insurance Commissioners (NAIC) had been the only U.S. members. Any agreements reached under the FSB or IAIS would have no legal impact in the United States until adopted in regulation by federal or state regulators or enacted into federal or state statute. Congress has little direct role in international regulatory cooperation agreements such as those reached at the FSB or IAIS, but past hearings and proposed legislation has addressed these issues. The federal involvement in insurance issues has created frictions both among the federal entities and between the states and the federal entities, and it has been a subject of congressional hearings and legislation. The first covered agreement, between the United States and the European Union (EU), went into effect on September 22, 2017. The agreement was largely rejected by the states and the NAIC, with the insurance industry split in its support, or lack thereof, for the agreement. Treasury and USTR announced a second covered agreement, with the United Kingdom (UK), on December 11, 2018. Congressional Outlook The recently negotiated U.S.-UK covered agreement is currently in the 90-day layover period giving the 116th Congress the opportunity to conduct oversight or pass legislation affecting the agreement. Past Congresses have been interested in revisiting the Dodd-Frank authorities that created covered agreements and the current Congress may consider similar legislation. The potential impact of international organizations and standards on the U.S. insurance markets and the potential for new trade agreements may also be of congressional concern.
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Under existing law (Atomic Energy Act [AEA] of 1954, as amended [P.L. 83-703; 42 U.S.C. §2153 et seq.]), all significant U.S. nuclear cooperation with other countries requires a peaceful nuclear cooperation agreement. Significant nuclear cooperation includes the transfer of U.S.-origin special nuclear material subject to licensing for commercial, medical, and industrial purposes, and the export of reactors and critical parts of reactors. Section 123 agreements are required for the export of commodities under NRC export licensing authority (10 C.F.R. 110). Such agreements, which are "congressional-executive agreements" requiring congressional approval, do not guarantee that cooperation will take place or that nuclear material will be transferred, but rather set the terms of reference and authorize cooperation. The AEA includes requirements for an agreement's content, conditions for the President to exempt an agreement from those requirements, presidential determinations and other supporting information to be submitted to Congress, conditions affecting the implementation of an agreement once it takes effect, and procedures for Congress to consider and approve the agreement. Section 123 of the AEA requires that any agreement for nuclear cooperation meet nine nonproliferation criteria and that the President submit any such agreement to the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations. The Department of State is required to provide the President with an unclassified Nuclear Proliferation Assessment Statement (NPAS), which the President is to submit, along with the agreement, to those two committees. The State Department is also required to provide a classified annex to the NPAS, prepared in consultation with the Director of National Intelligence. The NPAS is meant to explain how the agreement meets the AEA nonproliferation requirements. The President must also make a written determination "that the performance of the proposed agreement will promote and will not constitute an unreasonable risk to, the common defense and security." Section 123 of the AEA specifies the necessary steps for engaging in nuclear cooperation with another country. Section 123a. states that the proposed agreement is to include the terms, conditions, duration, nature, and scope of cooperation and lists nine criteria that the agreement must meet. It also contains provisions for the President to exempt an agreement from any of several criteria described in that section and includes details on the kinds of information the executive branch must provide to Congress. Section 123b. specifies the process for submitting the text of the agreement to Congress. Section 123c. specifies the procedure for congressional approval of cooperation agreements that are limited in scope (e.g., do not transfer nuclear material or cover reactors larger than 5 megawatts electric [MWe]). This report does not discuss such agreements. Section 123d. specifies the procedure for congressional approval of agreements that do cover significant nuclear cooperation (transfer of nuclear material or reactors larger than 5 MWe), including exempted agreements. Section 123a., paragraphs (1) through (9), lists nine criteria that an agreement with a nonnuclear weapon state must meet unless the President determines an exemption is necessary. These include guarantees that safeguards on transferred nuclear material and equipment continue in perpetuity; International Atomic Energy Agency (IAEA) comprehensive safeguards are applied in nonnuclear weapon states; nothing transferred is used for any nuclear explosive device or for any other military purpose; the United States has the right to demand the return of transferred nuclear materials and equipment, as well as any special nuclear material produced through their use, if the cooperating state detonates a nuclear explosive device or terminates or abrogates an IAEA safeguards agreement; there is no retransfer of material or classified data without U.S. consent; physical security on nuclear material is maintained; there is no enrichment or reprocessing by the recipient state of transferred nuclear material or nuclear material produced with materials or facilities transferred pursuant to the agreement without prior approval; storage for transferred plutonium and highly enriched uranium is approved in advance by the United States; and any material or facility produced or constructed through use of special nuclear technology transferred under the cooperation agreement is subject to all of the above requirements. Although some experts have advocated requiring governments to forgo enrichment and reprocessing (a nonproliferation commitment sometimes referred to as the "Gold Standard") as a condition for concluding a nuclear cooperation agreement, the Atomic Energy Act does not include such a requirement (see Appendix B ). The President may exempt an agreement for cooperation from any of the requirements in Section 123a. if he determines that the requirement would be "seriously prejudicial to the achievement of U.S. nonproliferation objectives or otherwise jeopardize the common defense and security." The AEA provides different requirements, conditions, and procedures for exempt and nonexempt agreements. To date, all of the Section 123 agreements in force are nonexempt agreements. Prior to the adoption of P.L. 109-401 , the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, the President would have needed to exempt the nuclear cooperation agreement with India from some requirements of Section 123a. However, P.L. 109-401 exempted nuclear cooperation with India from some of the AEA's requirements. Under the AEA, Congress has the opportunity to review a nuclear cooperation agreement for two time periods totaling 90 days of continuous session. The President must submit the text of the proposed agreement, along with required supporting documents (including the unclassified NPAS) to the House Foreign Affairs Committee and the Senate Foreign Relations Committee. The President is to consult with the committees "for a period of not less than 30 days of continuous session." After this period of consultation, the President is to submit the agreement to Congress, along with the classified annex to the NPAS and a statement of his approval of the agreement and determination that it will not damage U.S. national security interests. This action begins the second period, which consists of 60 days of continuous session. In practice, the President has sent the agreement to Congress at the beginning of the full 90-day period, which begins on the date of transmittal. Typically, the 60-day period has immediately followed the expiration of the 30-day period. The President transmits the text of the proposed agreement along with a letter of support with a national security determination, the unclassified NPAS, its classified annex, and letters of support for the agreement from the Secretary of State and the Nuclear Regulatory Commission. If the President has not exempted the agreement from any requirements of Section 123a., it may enter into force after the end of the 60-day period unless, during that time, Congress adopts a joint resolution disapproving the agreement and the resolution becomes law. If the agreement is an exempted agreement, Congress must adopt a joint resolution of approval and it must become law by the end of the 60-day period or the agreement may not enter into force. At the beginning of this 60-day period, joint resolutions of approval or disapproval, as appropriate, are to be automatically introduced in each house. During this period, the committees are to hold hearings on the proposed agreement and "submit a report to their respective bodies recommending whether it should be approved or disapproved." If either committee has not reported the requisite joint resolution of approval or disapproval by the end of 45 days, it is automatically discharged from further consideration of the measure. After the joint resolution is reported or discharged, Congress is to consider it under expedited procedures, as established by Section 130.i. of the AEA. Congress has used procedures outside the above-described process to adopt legislation approving some nuclear cooperation agreements (see Appendix C ). Section 202 of P.L. 110-369 , the United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, which President Bush signed into law October 8, 2008, amended Section 123 of the AEA to require the President to keep the Senate Foreign Relations Committee and the House Foreign Affairs Committee "fully and currently informed of any initiative or negotiations relating to a new or amended agreement for peaceful nuclear cooperation." The AEA sets out procedures for licensing exports to states with which the United States has nuclear cooperation agreements. (Sections 126, 127, and 128 codified as amended at 42 U.S.C. 2155, 2156, 2157.) Each export of nuclear material, equipment, or technology requires a specific export license or other authorization. The Nuclear Regulatory Commission (NRC) is required to meet criteria in Sections 127 and 128 in authorizing export licenses. These criteria are as follows: Application of IAEA safeguards to any material or facilities proposed to be exported, material or facilities previously exported, and to any special nuclear material used in or produced through the use thereof (these are not full-scope safeguards, but safeguards required under Article III.2 of the nuclear Nonproliferation Treaty [NPT]). Nothing exported can be used for any nuclear explosive device or for research on or development of any nuclear explosive device. Recipient states must have adequate physical security on "such material or facilities proposed to be exported and to any special nuclear material used in or produced through the use thereof." Recipient states are not to retransfer exported nuclear materials, facilities, sensitive nuclear technology, or "special nuclear material produced through the use of such material" without prior U.S. approval. Recipient states may not reprocess or alter in form or content exported nuclear material or special nuclear material produced though the use of exported nuclear material without prior U.S. approval. The foregoing conditions must be applied to any nuclear material or equipment that is produced or constructed under the jurisdiction of the recipient by or through the use of any exported sensitive nuclear technology. Section 128 requires that recipient nonnuclear weapon states must have full-scope IAEA safeguards. The President must judge that the proposed export or exemption will "not be inimical to the common defense and security" or that any export of that type "would not be inimical to the common defense and security because it lacks significance for nuclear explosive purposes." The executive branch may also consider other factors, such as "whether the license or exemption will materially advance the nonproliferation policy of the United States by encouraging the recipient nation to adhere" to the NPT; whether "failure to issue the license or grant the exemption would otherwise be seriously prejudicial" to U.S. nonproliferation objectives; and whether the recipient nation has agreed to conditions identical to those laid out in Section 127. Section 126b.(2) contains a provision for the President to authorize an export in the event that the NRC deems that the export would not meet Section 127 and 128 criteria. The President must determine "that failure to approve an export would be seriously prejudicial to the achievement of U.S. nonproliferation objectives or otherwise jeopardize the common defense and security." In that case, the President would submit his executive order, along with a detailed assessment and other documentation, to Congress for 60 days of continuous session. After 60 days of continuous session, the export would go through unless Congress were to adopt a concurrent resolution of disapproval. Section 128b.(2) contains a provision for the President to waive termination of exports by notifying Congress that the state has adopted full-scope safeguards or that the state has made significant progress toward adopting such safeguards, or that U.S. foreign policy interests dictate reconsideration. Such a determination would become effective unless Congress were to adopt a concurrent resolution of disapproval within 60 days of continuous session. Additionally, Section 129b.(1) forbids the export of "nuclear materials and equipment or sensitive nuclear technology" to any country designated as a state sponsor of terrorism. Section 129b.(3) allows the President to waive this provision. The Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010 ( P.L. 111-195 ), which became law July 1, 2010, contains additional restrictions on licensing nuclear exports to countries with entities that have been sanctioned for conducting certain types of nuclear weapons-related transactions with Iran. Section 102a.(2)(A) of the law states that "no license may be issued for the export, and no approval may be given for the transfer or retransfer" of "any nuclear material, facilities, components, or other goods, services, or technology that are or would be subject to an agreement for cooperation between the United States" and such countries. Section 102 a.(2)(B), however, allows the President to waive these restrictions. Section 102a.(2)(C) allows the President to authorize licenses for nuclear exports "on a case-by-case basis" to entities (which have not been sanctioned) in countries subject to the restrictions described above. Section 131 of the AEA details procedures for subsequent arrangements to nuclear cooperation agreements concluded pursuant to Section 123. Such arrangements are required for forms of nuclear cooperation requiring additional congressional approval, such as transfers of nuclear material or technology and recipient states' enrichment or reprocessing of nuclear materials transferred pursuant to the agreement. Subsequent arrangements may also include arrangements for physical security, storage, or disposition of spent nuclear fuel; the application of safeguards on nuclear materials or equipment; or "any other arrangement which the President finds to be important from the standpoint of preventing proliferation." Before entering into a subsequent arrangement, the Secretary of Energy must publish in the Federal Register a determination that the arrangement "will not be inimical to the common defense and security." A proposed subsequent arrangement shall not take effect before 15 days after publication of both this determination and notice of the proposed arrangement. The Secretary of State is required to prepare an unclassified Nuclear Proliferation Assessment Statement (NPAS) if, "in the view of" the Secretary of State, Secretary of Energy, Secretary of Defense, or the Nuclear Regulatory Commission, a proposed subsequent arrangement "might significantly contribute to proliferation." The Secretary of State is to submit the NPAS to the Secretary of Energy within 60 days of receiving a copy of the proposed subsequent arrangement. The President may waive the 60-day requirement if the Secretary of State so requests, but must notify both the House Foreign Affairs Committee and Senate Foreign Relations Committee of any such waiver and the justification for it. The Secretary of Energy may not enter into the subsequent arrangement before receiving the NPAS. Section 131 specifies requirements for certain types of subsequent arrangements. Section 131b. describes procedures for the executive branch to follow before entering into a subsequent arrangement involving the reprocessing of U.S.-origin nuclear material or nuclear material produced with U.S.-supplied nuclear technology. These procedures also cover subsequent arrangements allowing the retransfer of such material to a "third country for reprocessing" or "the subsequent retransfer" of more than 500 grams of any plutonium produced by reprocessing such material. The Secretary of Energy must provide both the House Foreign Affairs Committee and Senate Foreign Relations Committee with a report describing the reasons for entering into the arrangement. Additionally, 15 days of continuous session must elapse before the Secretary may enter into the arrangement, unless the President judges that "an emergency exists due to unforeseen circumstances requiring immediate entry" into the arrangement. In such a case, the waiting period would be 15 calendar days. If a subsequent arrangement described in the above paragraph involves a facility that has not processed spent nuclear reactor fuel prior to March 10, 1978 (when the Nuclear Nonproliferation Act of 1978 was enacted), the Secretaries of State and Energy must judge that the arrangement "will not result in a significant increase of the risk of proliferation." In making this judgment, the Secretaries are to give "foremost consideration ... to whether or not the reprocessing or retransfer will take place under conditions that will ensure timely warning to the United States of any diversion well in advance of the time at which the non-nuclear weapon state could transform the diverted material into a nuclear explosive device." For a subsequent arrangement involving reprocessing in a facility that has processed spent nuclear reactor fuel prior to March 10, 1978, the Secretary of Energy will "attempt to ensure" that reprocessing "shall take place under conditions" that would satisfy the timely-warning conditions described above. Section 131f. specifies procedures for congressional approval of subsequent arrangements involving the storage or disposition of foreign spent nuclear fuel in the United States. Section 133 states that, before approving a subsequent arrangement involving certain transfers of special nuclear material, the Secretary of Energy must consult with the Secretary of Defense "on whether the physical protection of that material during the export or transfer will be adequate to deter theft, sabotage, and other acts of international terrorism which would result in the diversion of that material." If the Secretary of Defense determines that "the export or transfer might be subject to a genuine terrorist threat," that Secretary is required to provide a written risk assessment of the risk and a "description of the actions" that he or she "considers necessary to upgrade physical protection measures." The first test of the subsequent arrangement provisions came in August 1978, when the Department of Energy informed the House and Senate foreign relations committees of a Japanese request for approval of the transfer of spent fuel assemblies from Japan to the United Kingdom for reprocessing. This was the first "subsequent arrangement" approved. The United States and Japan entered into similar arrangements until 1988, when the two governments revised their nuclear cooperation agreement. That agreement included an "implementing agreement," which provided 30-year advance consent for the transfer of spent fuel from Japan to Europe for reprocessing. While controversial, Congress did not block the nuclear cooperation agreement. A subsequent arrangement was also necessary for the sea transport from Europe to Japan of plutonium that had been separated from the Japanese spent fuel. The Department of Energy approved a Japanese request for 30-year advance consent for the sea transport of plutonium. It was submitted to Congress as a subsequent arrangement, and took effect in October 1988. The U.S. nuclear cooperation agreement with India grants New Delhi consent to reprocess nuclear material transferred pursuant to the agreement, as well as "nuclear material and by-product material used in or produced through the use of nuclear material, non-nuclear material, or equipment so transferred." However, the agreement also includes a requirement that India first build a new national reprocessing facility to be operated under IAEA safeguards. The two countries signed a subsequent arrangement July 30, 2010, which governs the procedures for operating two new reprocessing facilities in India. The agreement also describes procedures for U.S. officials to inspect and receive information about physical protection measures at the new facilities. The arrangement would not have taken effect if Congress had adopted a joint resolution of disapproval within 30 days of continuous session; Congress did not adopt such a resolution. If India were to construct any additional facilities to reprocess fuel from U.S.-supplied reactors, a new subsequent arrangement would need to be submitted to Congress. Section 129a. of the AEA requires that the United States end exports of nuclear materials and equipment or sensitive nuclear technology to any nonnuclear weapon state that, after March 10, 1978, the President determines to have detonated a nuclear explosive device; terminated or abrogated IAEA safeguards; materially violated an IAEA safeguards agreement; or engaged in activities involving source or special nuclear material and having "direct significance" for the manufacture or acquisition of nuclear explosive devices, and "has failed to take steps which, in the President's judgment, represent sufficient progress toward terminating such activities." Section 129a. also requires that the United States halt exports to any nation the President determines to have materially violated the terms of an agreement for cooperation with the United States; assisted, encouraged, or induced any nonnuclear weapon state to obtain nuclear explosives or the materials and technologies needed to manufacture them; or retransferred or entered into an agreement for exporting reprocessing equipment, materials, or technology to a nonnuclear weapon state, unless in connection with an international agreement to which the United States subscribes. The President can waive termination of exports if he determines that "cessation of such exports would be seriously prejudicial to the achievement of United States nonproliferation objectives or otherwise jeopardize the common defense and security." The President must submit his determination to Congress, which is then referred to the House Committee on Foreign Affairs and the Senate Foreign Relations Committee for 60 days of continuous session. The determination becomes effective unless Congress adopts a joint resolution opposing the determination. Section 57.b. (2) of the Atomic Energy Act allows for limited forms of nuclear cooperation related to the "development or production of any special nuclear material outside of the United States" if that activity has been authorized by the Secretary of Energy following a determination that it "will not be inimical to the interest of the United States." The Secretary may only make such a finding with "the concurrence of the Department of State, and after consultation with the Nuclear Regulatory Commission [NRC], the Department of Commerce, and the Department of Defense." Authorizations of such activities are also known as "Part 810 authorizations," after 10 Code of Federal Regulations (C.F.R.) Part 810. Part 810 regulations describe activities that are "generally authorized" by the Secretary of Energy and activities that require "specific authorization" by the Secretary. Some "generally authorized activities" are limited to a list of "generally authorized destinations." These regulations also detail "reporting requirements for authorized activities." Part 810 authorizations mostly involve unclassified nuclear technology transfer and services, such as nuclear reactor designs, nuclear facility operational information and training, and nuclear fuel fabrication. Such an authorization is not required for exports of components and materials licensed by NRC governed by 10 C.F.R. Part 110. Civilian nuclear cooperation agreements under Section 123 of the Atomic Energy Act of 1954, as amended (hereinafter Atomic Energy Act or AEA), are not required for an 810 authorization or for transmission of nuclear-related information, except for restricted data. Such agreements are, however, required for such forms of nuclear cooperation as the transfer of U.S.-origin special nuclear material subject to licensing for commercial, medical, and industrial purposes; the export of reactors and critical parts of reactors; and other commodities under NRC export licensing authority (10 C.F.R. 110). The NRC may also authorize activities governed by Part 810 authorizations under a 123 agreement or under a subsequent arrangement to such an agreement. It is worth noting that Part 810.9 includes "[w]hether the United States has an agreement for cooperation in force covering exports to the country or entity involved" as a factor for the Secretary of Energy to use in determining that an activity "will not be inimical to the interest [sic] of the United States." Moreover, the list of "generally authorized destinations" is "based principally on the United States agreements for civil nuclear cooperation," according to guidance from the National Nuclear Security Administration. On December 19, 2018, Senators Markey and Rubio introduced S. 3785 , the No Nuclear Weapons for Saudi Arabia Act of 2018, and Representatives Sherman and Messer introduced the companion bill, H.R. 7350 . The bills would require a joint resolution of approval for a 123 agreement with Saudi Arabia. In addition, the bills' text includes the sense of Congress that no 123 agreement should be approved until Saudi Arabia has "been truthful and transparent with regard to the death of Jamal Khashoggi" and prosecuted those responsible, "renounced uranium enrichment and reprocessing on its territory," concluded an IAEA Additional Protocol, and made "substantial progress on the protection of human rights, including the release of political prisoners." The bills require the President to submit a report assessing progress on the above actions along with a proposed agreement. The text also includes a statement of policy that the United States should oppose sales of nuclear technology to Saudi Arabia through the Nuclear Suppliers Group (NSG) until Saudi Arabia has renounced enrichment and reprocessing. On December 19, 2018, Representative Brad Sherman introduced H.R. 7351 , the Nuclear Cooperation Agreements Reform Act of 2018, which would amend the Atomic Energy Act to require nonexempt nuclear cooperation agreements to include several additional provisions. These provisions include a legally binding "commitment" from the cooperating government stipulating that "no enrichment or reprocessing activities, or acquisition or construction of such facilities, [would] occur within the territory over which the cooperating party exercises sovereignty"; "a guaranty by the cooperating party that no nationals of a third country" would be "permitted access to any reactor, related equipment, or sensitive materials transferred under" the agreement without prior U.S. consent; a "commitment to maintain" or enact "a legal regime providing for adequate protection from civil liability that will allow for the participation of United States suppliers in any effort by the country to develop civilian nuclear power"; and a stipulation that the United States can demand the return of transferred items if the cooperating government "violates or abrogates any provision" of its IAEA safeguards agreement. H.R. 7351 would also require a cooperating party to sign, ratify, and implement an Additional Protocol to its IAEA safeguards agreement; implement a number of export control-related measures; comply with "all United Nations conventions to which the United States is a party and all [UN] Security Council resolutions regarding the prevention of the proliferation of weapons of mass destruction"; and be party to, as well as fully implement, "the provisions and guidelines" of the Biological Weapons Convention and the Chemical Weapons Convention, as well as "all other international agreements to which the United States is a party regarding the export of nuclear, chemical, biological, and advanced conventional weapons, including missiles and other delivery systems." In addition, the bill would prohibit nuclear cooperation agreements with a country designated as a Destination of Diversion Concern pursuant to the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 ( P.L. 111-195 ). The bill would also prohibit such agreements with a country that is not "closely cooperating with the United States to prevent state sponsors of terrorism" from "acquiring or developing" nuclear, chemical, or biological (NBC) weapons "or related technologies" or "destabilizing numbers and types of advanced conventional weapons." H.R. 7351 would also limit the duration of a nuclear cooperation agreement to 15 years, as well as prohibit nuclear-related exports to a country identified in the most recent version of a report mandated by the National Defense Authorization Act for Fiscal Year 1998 ( P.L. 105-85 ) as possessing or seeking to "acquire or develop" NBC weapons, ballistic missiles, or cruise missiles. Moreover, the bill would amend the AEA's congressional notification provisions concerning ongoing nuclear cooperation agreement negotiations by requiring the President to "consult" with the Senate Foreign Relations Committee and the House Foreign Affairs Committee concerning such initiative or negotiations beginning not later than 15 calendar days after the initiation of any such negotiations, or the receipt or transmission of a draft agreement, whichever occurs first, and monthly thereafter until such time as the negotiations are concluded. These consultations would include the provision of "current working drafts and proposed text put forward for negotiation by the parties for inclusion in such agreement." The bill would also require the President to submit a report to the House Foreign Affairs and Senate Foreign Relations Committees "on the extent to which each country that engages in civil nuclear exports ... requires nuclear nonproliferation requirements as conditions for export comparable to those" in the AEA as amended by the bill, which would also stipulate that the report include "the extent to which the exports of each such country incorporate United States-origin components, technology, or materials that require United States approval for re-export"; "the civil nuclear-related trade and investments in the United States by any entity from each such country"; and a list of "any United States grant, concessionary loan or loan guarantee, or any other incentive or inducement to any such country or entity related to nuclear exports or investments in the United States." H.R. 7351 contains provisions concerning U.S. foreign assistance. For example, the bill would prohibit "assistance (other than humanitarian assistance) under any provision of law ... to a country that has withdrawn" from the NPT. H.R. 7351 would also require the United States to "seek the return of any material, equipment, or components transferred under" a nuclear cooperation agreement with such a country, as well as the return of any "special fissionable material produced through the use" of such transferred items. In addition, the bill would prohibit any assistance under the Foreign Assistance Act of 1961 [FAA], the Arms Export Control Act [AECA], the Foreign Military Sales Act [FMSA], the Food for Peace Act, the Peace Corps Act, or the Export-Import Bank Act of 1945 to any country if the Secretary of State determines that the government of the country has repeatedly provided support for acts of proliferation of equipment, technology, or materials to support the design, acquisition, manufacture, or use of weapons of mass destruction or the acquisition or development of missiles to carry such weapons. This section of the bill includes a reporting requirement and a presidential waiver provision. H.R. 7351 would also require the U.S. government to "take into consideration whether" proposed recipients of assistance pursuant to the AECA, FAA, or FMSA, have Additional Protocols to their IAEA safeguards agreements. The bill would also permit joint resolutions approving nuclear cooperation agreements to "include any other provisions to accompany such proposed agreement for cooperation.'' Lastly, H.R. 7351 would require Congress to enact a joint resolution of approval for subsequent arrangements to nuclear cooperation agreements. Appendix A. Key Dates for Bilateral Civilian Nuclear Cooperation ("Section 123") Agreements Appendix B. Enrichment and Reprocessing Restrictions Although some experts have advocated requiring governments to forgo enrichment and reprocessing (a nonproliferation commitment sometimes referred to as the "Gold Standard") as a condition for concluding a nuclear cooperation agreement, the Atomic Energy Act (AEA) does not include such a requirement. In recent years, the United States has attempted to persuade certain countries with which it is negotiating nuclear cooperation agreements to forgo enrichment and reprocessing and conclude Additional Protocols to their International Atomic Energy Agency (IAEA) safeguards agreements; past U.S. nuclear cooperation agreements have not included these additional components. The AEA does mandate that U.S. nuclear cooperation agreements require U.S. consent for any "alteration in form or content" (to include enrichment or reprocessing) of U.S.-origin material or any material processed in a plant containing transferred U.S. nuclear technology. Such agreements also require U.S. consent for any retransfer of material or technology. The United States has argued that its December 2009 nuclear cooperation agreement with the United Arab Emirates (UAE) could set a useful precedent for mitigating the dangers of nuclear proliferation. For example, President Barack Obama's May 21, 2009, letter transmitting the agreement to Congress argued that the agreement had "the potential to serve as a model for other countries in the region that wish to pursue responsible nuclear energy development." Similarly, then-State Department spokesperson P.J. Crowley described the agreement as "the gold standard" during an August 5, 2010, press briefing, although the Obama Administration generally did not use this term when describing its nuclear cooperation policies. The U.S.-UAE agreement's status as a potential model is grounded in two nonproliferation provisions not found in other U.S. nuclear cooperation agreements. First, the agreement requires the country to bring into force the Additional Protocol to its safeguards agreement before the United States licenses "exports of nuclear material, equipment, components, or technology" pursuant to the agreement. Second, the agreement states that the UAE shall not possess sensitive nuclear facilities within its territory or otherwise engage in activities within its territory for, or relating to, the enrichment or reprocessing of material, or for the alteration in form or content (except by irradiation or further irradiation or, if agreed by the Parties, post-irradiation examination) of plutonium, uranium 233, high enriched uranium, or irradiated source or special fissionable material. The U.S.-UAE agreement also provides the United States with the right to terminate nuclear cooperation and to require the return of any nuclear "material, equipment or components ... and any special fissionable material produced through their use" if, after the agreement's entry into force, the UAE "possesses sensitive nuclear facilities within its territory or otherwise engages in activities within its territory relating to enrichment of uranium or reprocessing of nuclear fuel." Notwithstanding its characterization of the U.S.-UAE agreement, the Obama Administration announced in December 2013 after an interagency review that renouncing domestic enrichment and reprocessing would not be a prerequisite to concluding a nuclear cooperation agreement for all countries, and each partner country would be considered individually. The U.S. nuclear cooperation agreement with Vietnam, which the two governments concluded in 2014, did not include a provision requiring the country to forgo enrichment and reprocessing, although the agreement's preamble includes a political commitment stating that Vietnam intends to rely on international markets for its nuclear fuel supply, rather than acquiring sensitive nuclear technologies. Appendix C. Nuclear Cooperation Agreements Approved Outside Atomic Energy Act Process Congress has used legislation to approve nuclear cooperation agreements that did not use the legislative process mandated by the Atomic Energy Act (AEA) of 1954, as amended. Australia On May 5, 2010, President Barack Obama submitted a renewed U.S.-Australia nuclear cooperation agreement to Congress for approval. H.R. 6411 , which the House adopted on November 30, 2010, would have approved the agreement even if there had not been sufficient legislative days remaining in the 111 th Congress; the Senate did not adopt its version of the bill ( S. 3844 ). These bills were not needed because the 111 th Congress contained a sufficient number of days for the agreement to enter into force. China In 1985, President Ronald Reagan submitted the first U.S.-China nuclear cooperation agreement to Congress, which adopted a joint resolution, P.L. 99-183 , requiring that the President make certain nonproliferation-related certifications in order for the agreement to be implemented. P.L. 99-183 required a presidential certification and a report followed by a period of 30 days of continuous session of Congress. P.L. 101-246 , the Foreign Relations Authorization Act for Fiscal Years 1990 and 1991, imposed sanctions on China, including suspending nuclear cooperation and requiring an additional presidential certification on Beijing's nuclear nonproliferation assurances. Before a summit with China, President William Clinton on January 12, 1998, signed the required certifications regarding China's nuclear nonproliferation policy and practices. Clinton also issued a certification and waived a sanction imposed under P.L. 101-246 . Congressional review ended on March 18, 1998, allowing the agreement to be implemented. India P.L. 109-401 , which became law on December 18, 2006, permitted the President to waive several provisions of the AEA with respect to a nuclear cooperation agreement with India. On September 10, 2008, President George W. Bush submitted to Congress a determination that P.L. 109-401 's requirements for such an agreement to proceed had been met. President Bush signed P.L. 110-369 , which approved the agreement, into law on October 8, 2008. Norway The President submitted an extension of the U.S.-Norway nuclear cooperation agreement to Congress on June 14, 2016. P.L. 114-320 , which became law on December 16, 2016, approved the agreement "[n]otwithstanding the provisions for congressional consideration" in the AEA, thereby addressing concerns that that there was an insufficient number of legislative days remaining in the 114 th Congress for congressional consideration.
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In order for the United States to engage in significant civilian nuclear cooperation with other states, it must conclude a framework agreement that meets specific requirements under Section 123 of the Atomic Energy Act (AEA). Significant nuclear cooperation includes the export of reactors, critical parts of reactors, and reactor fuel. The AEA also provides for export control licensing procedures and criteria for terminating cooperation. Congressional review is required for Section 123 agreements; the AEA establishes special parliamentary procedures by which Congress may act on a proposed agreement.
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